FRASER v THE COUNCIL OF THE LAW SOCIETY OF NEW SOUTH WALES SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL KirBY P, HANDLEY and Cripps JJA 28 May 1992, 7 August 1992 [1992] NSWCA 72 LEGAL PRACTITIONERS — solicitor — misconduct — false certificate of explanation to a mortgagor concerning terms of a mortgage solicitor signs certificate without speaking to mortgagors — does so in case of suggested urgency on the basis of assurance that advice was earlier given by experienced retired barrister — later fails candidly to acknowledge false certificate to solicitor for mortgagee who twice enquires about it — at Court eventually acknowledges that his conduct amounted to fraud — Legal Profession Disciplinary Tribunal orders removal of solicitor's name from the roll of solicitors — appeal to Supreme Court — held: (By the Court Kirby P, Handley JA and Cripps JA): (1) The finding of professional misconduct, which was admitted, required determination of the appeal upon the basis of (a) the provision of a false certificate; (b) lack of candour to a fellow practitioner; (c) belated acknowledgment of fraud; and (d) the weight to be given to the opinion of the Tribunal expressing the standards of conduct of the solicitors' profession; (2) In an appeal from the Tribunal to the Supreme Court, the Court was obliged under s164(3) to hear and determine the appeal; (3) In the circumstances of acknowledged wrongdoing and having regard to the events giving rise to it, lack of any advantage sought or obtained by the solicitor and other determinations by the Tribunal in other analogous cases, removal from the roll was not required; but a fine should be imposed; (4) Appeal allowed; fine of $7,000 imposed; (5) Order that upon such payment solicitor's name to be restored to the roll. LAW REFORM — appeal — Court of Appeal — hearing and determination of appeal from Legal Profession Disciplinary Tribunal — desirability of limitations or controls on such appeals otherwise by way of "a new hearing" under s164(4) Legal Profession Act 1987 — suggestion by Kirby P of need for leave to secure full rehearing. Legal Profession Act 1987, s163, 164. Kirby P On 19 December 1991 the Legal Profession Disciplinary Tribunal, constituted pursuant to s128 of the Legal Profession Act 1987 (the Act), found that the conduct of Mr Paul Fraser (the appellant) in the matters before the Tribunal would be regarded as disgraceful or dishonourable by professional colleagues of good repute and competency. It decided that the conduct found to have occurred amounted to professional misconduct. It thereupon ordered that the appellant's name be removed from the roll of solicitors and that he pay the costs of the Law Society of New South Wales which had brought the circumstances of the misconduct to the notice of the Tribunal. From the order that his name be removed from the roll, the appellant has appealed to this Court. Although critical of some of the reasoning of the Tribunal, the appellant acknowledged that the conduct found amounted to professional misconduct. He argued that a determination short of the removal of his name from the roll should be made. He asked the Court to review the Tribunal's determination and to permit him to return to practice. The appellant having sought no stay of the Tribunal's order, he has not practised as a solicitor since 19 December 1991. 2 UNREPORTED JUDGMENTS Since the passage of the Act and the establishment of the Tribunal, the discipline of members of the legal profession in New South Wales has changed somewhat. This is not the case in which to explore the changes or their consequences for the function of this Court, derived from ancient times, to superintend the members of the legal profession. Nor is this a case in which to consider the application of the authorities established before the Act came into force to the new jurisdiction of the Court, conferred by the Act, to hear and determine appeals from the Tribunal. (See the Act, s164(3)). By s164(4) it is provided: "164(4)An appeal shall be by way of a new hearing and fresh evidence, or evidence in addition to or in substitution for the evidence received at the original hearing, may be given." Such a provision opens up the daunting prospect of a completely fresh hearing, with unlimited fresh evidence beyond that received by the Tribunal whose determination is appealed. No problem arose in the present case because the fresh or additional evidence was relatively brief. It amounted to an affidavit by the appellant upon which he was cross-examined by counsel for the Society and questioned by the Court. It would be desirable for the authority of the Tribunal and for the performance by the Court of its appropriate function in relation to the Tribunal, if appeals were confined to a function similar to that established under s75A of the Supreme Court Act 1970. The prospect of devoting the time of three judges of the court of Appeal to the great detail of such cases, where contested, is unattractive. It is not a facility open to members of other learned professions. It should, if available at all to members of the legal profession as a special class, only be available by leave of this Court. Yet it may be that s164(4) of the Act requires a full rehearing as of right. Because of the issue for decision in this appeal, and the way in which the appeal was conducted, it is unnecessary to do more than notice this point and to pass as quickly as possible from it. A solicitor signs a false certificate. The facts relevant to the appeal can be briefly stated. The solicitor acquired legal and accounting qualifications at the University of Sydney. He completed his law degree within that University in 1981. He finished his course at the College of Law in the middle of 1982. He was admitted as a solicitor of the Court in July 1982. He carried on his practice in Wollongong. He there had the use of a cubicle in the offices of Title Conveyancing Company, an organisation which uses practising solicitors as consultants in the provision of land title conveyancing at economical rates. Most of the appellant's work came from his consultancy with the company. He did other work occasionally, such as probate and a little litigation. On 13 August 1990 the appellant was working in the cubicle provided to him by the company when he received a telephone call from Ms Peta Goode of Title Conveyancing Company in Wagga Wagga. Ms Goode's call concerned the preparation of a certificate of explanation required in conjunction with the execution of a mortgage. The purpose of such certificates, and their importance both to a mortgagee and a mortgagor are explained in the recent decision of this Court in Beneficial Finance Corporation Ltd v Karavas (1991) 23 NSWLR 256 (CA). See esp 265ff, 273ff. See also Demetrios v Gikas Dry Cleaning Industries Pty Ltd (1991) 22 NSWLR 561 (CA) 564, 567. In Karavas, for default of adequate explanation to the mortgagors of the risks which they ran of losing their homes upon a financially insecure extension of finance to their children, the trial judge (Giles J) found that the mortgage contracts were unjust within the UARASER v THE COUNCIL OF THE LAW SOCIETY OF NEW SOUTH WALES (Kirby PB Contracts Review Act (1980). This Court declined to disturb that finding. It therefore stands as a warning to mortgagees, mortgagors, their solicitors and the finance industry generally about the importance of the provision of proper and independence advice to mortgagors contemplating the execution of a mortgage. The provision of the certificate of explanation is not a charade or a formality. To it attach important legal and professional consequences. Ms Goode informed the appellant that she had clients, Mr and Mrs Livingstone, who needed urgently the provision of a certificate of explanation in order to complete a mortgage transaction in which they were interested as mortgagors. Ms Goode assured the appellant that the Livingstones had already been given an explanation about the mortgage by Mr Robert McConnell, now deceased, then a non-practising barrister who also did legal work for Title Conveyancing Company. Mr McConnell lived in the Eastern Suburbs of Sydney. The Livingstones lived out of Wagga Wagga. By inference, Mr McConnell must have provided such advice as he gave to the Livingstones by telephone. This would have been known to the appellant. He knew both Ms Goode and Mr McConnell. He had a high opinion of Mr McConnell. He believed that any advice which Mr McConnell gave the Livingstones would have been professionally competent and adequate for legal purposes. However, Ms Goode informed the appellant that the mortgagee had declined to accept a certificate from McConnell. The ground given was that Mr McConnell had neither a current practicing certificate as a solicitor nor could he establish that he had taken out professional indemnity insurance to protect him (and, if necessary, the mortgagee) in the event that it subsequently transpired that his explanation to the mortgagors was inadequate, allowing them to escape the mortgage obligations. In the light of the decision in Karavas, this was a proper and understandable precaution on the part of the mortgagee. The appellant was informed that the Livingstones were hard to contact and that there was urgency in completing the transaction. He thereupon agreed to sign the certificate of explanation himself. It was given in these terms: "Certificate of Explanation: I, Paul Fraser, solicitor do hereby certify that I have explained the mortgage documents and memorandum to the mortgagors - Ian Maxwell Livingstone and Jacquita Anne Livingstone. Dated this Thirteenth day of August 1990. Paul Fraser, Solicitor Wollongong." The certificate was false. The appellant had never spoken to the Livingstones in person or by telephone. He clearly intended his certificate to be acted upon by the mortgagee. He would have known that it had potential consequences for the mortgagors. He signed the certificate although he had not himself fully informed the Livingstones of their rights and obligations under the mortgage. On 17 August 1990, the solicitor acting for the mortgagee telephoned the appellant. The appellant affirmed that he had signed the certificate and that he held a full practicing certificate. Later, the solicitor again telephoned the appellant to ask whether he had, in fact, explained the mortgage documents personally or by telephone. To this inquiry, the appellant gave the following abrupt answer: "You have got the certificate of explanation. You can rely on that." Pressed by his solicitor about his personal attendance he said: 4 UNREPORTED JUDGMENTS "You've got the certificate of explanation. You can rely on that and that's all that needs to be said." The settlement of the purchase by Mr and Mrs Livingstone went ahead on 27 August 1980. However, in December 1990 the Law Society required the appellant to explain the circumstances in which the certificate of explanation came into existence. At first the solicitor protested a difficulty of remembering the case. He declared that: "I am sure this particular matter was conducted over the telephone." Commendably, the Society persisted with its inquiry. Ultimately, the Council of the Society resolved in May 1991 to institute a complaint before the Tribunal. The Tribunal's jurisdiction was invoked in July 1991. The hearing was conducted in September 1991. The complaint was determined, as has been stated, in December 1991. Finding of the Disciplinary Tribunal. The Tribunal found that the appellant had voluntarily given a false certificate knowing that it would be relied upon. He had then compounded this error when, in two telephone conversations with a fellow practitioner shortly thereafter, he had failed to take advantage of the opportunities then provided to correct the situation. The Tribunal reminded itself of the high importance of honesty within the legal profession. Borg v Barnes and Ors (1987) 10 NSWLR 734, 737 (SC). It acknowledged its own heavy responsibility to protect the public from legal practitioners who "indulge in conduct deceitful or dishonourable". By reference to what Mahoney JA had said in The Law Society of New South Wales v Foreman (1991) 6 LPDR 19, 26 (CA) it suggested that the appellant, by what he had done, had indicated that he did not understand the nature and extent of the obligations he owed to clients, to third parties and to other members of the profession. In the course of giving its reasons, the Tribunal said: "Tf a solicitor wishes to hold a practicing certificate, whether as an employee under supervision or otherwise, he or she must demonstrate, in proceedings before the Tribunal, a fitness to hold such a certificate. How does one find the standard that must be applied? The standard is found, in the view of the Tribunal, by looking at what one's professional brethren of good repute and competency would regard as proper standards.... Allinson v General Council of Medicine [1894] 1 QB 750, 761, 763... In Re a Solicitor [1912] 1 KB 302." This passage in the Tribunal's reasons was criticised by the appellant as indicating a reversal of the onus of proof which rested on the Society to make out its complaint. I read the passage as saying no more than that, once disgraceful or dishonourable conduct is made out, necessarily the issue of the cancellation of a current practicing certificate is presented for decision. However that may be, there is little point in analysing the passage complained of. Before this Court, the appellant acknowledged his misconduct. Self-evidently, that misconduct is serious. Equally clearly, cancellation of the appellant's practicing certificate was an option to be considered. At the hearing, the solicitor appearing for the Society obviously took a view of the appropriate response to the proved conduct which fell short of that eventually recorded by the Tribunal in its decision. He said: "T would submit that a reprimand would certainly be insufficient and that the Tribunal ought to have consideration to levying a considerable fine in the circumstances of this particular case." UARASER v THE COUNCIL OF THE LAW SOCIETY OF NEW SOUTH WALES (Kirby PB Against the background of a number of recent cases, that submission was not an unreasonable one. See esp In the matter of Ian Burnham Mitchell (1992) 1 LPDR, 6, 10. But in the end, the Tribunal ordered that the name of the appellant be removed from the roll. It is that order which is now the subject of this appeal. The appeal was conducted upon the footing that the Court: (a) Is obliged to reach its own conclusion on the proper determination of the matter as on a new hearing, as s 164(4) of the Act provides; (b) Would take into account the opinions of the Tribunal, as a specialised body, reflecting the views of experienced members of the legal profession and reflecting the standards of conduct within that profession considered by the members of the Tribunal to be appropriate to the circumstances; and (c) Had all of the powers enjoyed at first instance by the Tribunal pursuant to s163 of the Act. In that sense, it was suggested that the Court now enjoyed a wider range of powers than formerly existed in disposing of such cases. Thus, it would have power to make an order for the payment of a fine not exceeding $25,000 (s163(1)(d)) or this in combination with removal from the roll or cancellation of the practicing certificate. Additional evidence is taken on appeal. On the appeal, without objection, an affidavit by the appellant was read. The appellant was then cross-examined. By his affidavit the appellant acknowledged that the provision of the false certificate: "\.. Was wrong and that I ought not to have done it." The affidavit sought to explain the provision of the certificate by reference to the reported urgency facing the mortgagors, the assurance that proper explanation had been given by Mr McConnell and the confidence which the appellant had in Mr McConnell's ability and integrity. In respect of the telephone call from the mortgagee's solicitor, the appellant agreed with the solicitor's affidavit. He also agreed that he had been evasive. He explained that he was trying to assure the solicitor that the certificate had been given after a proper explanation to the mortgagors without telling him a lie by affirming expressly either a face-to-face interview or a telephoned explanation by himself. In questioning by the Court, the appellant baulked at the suggested that, by what he had done in giving the certificate, he had been engaged in a fraud, specifically upon the mortgagee. His resistance to the charge of "fraud" appeared to rest upon the following bases: 1. That nobody had in fact suffered any damage from what he had done; 2. That he had not intended to cause damage to anyone and indeed had only acted as he did because of an emergency and to help the mortgagors in their predicament; 3. That he had received no fee or benefit whatsoever for himself for what he had done; and 4. That he was convinced that the mortgagors had been given, by Mr McConnell, as accurate and thorough an explanation as they could hope for. However, as he was pressed each of these defences fell away. Ultimately, the appellant came to acknowledge, as was clearly the fact, that he was guilty of fraud. Cf Demetrious v Gikas (above) at 564. The acknowledgment occurred in the following passage of questioning by members of the Court: 6 UNREPORTED JUDGMENTS "HANDLEY JA: Q: Sitting in the witness box, you realise what you did was not only a foolish and wrong but that it was fraudulent? A: I baulk at the world fraudulent. I look, if you want a yes or no answer, I suppose I would have to say yes. But I really don't, the word 'fraud', I don't believe I was party to any fraud. Q: What is it about your conduct at the time and what you did that gives you difficulty in seeing it as fraudulent? A: Well, the situation is I have never met the Livingstones and quite frankly Ihave gone to such extraordinary lengths to help these people. Why would I do such a thing? It really is incomprehensible that I should do such a thing as I have done. CRIPPS JA: The fraud is directed to the mortgagee's solicitor. KIRBY P: And the mortgagee. CRIPPS JA: p: Why do you not think it was fraudulent towards them? A: I believe, I feel uncomfortable with the word 'fraud'. HANDLEY JA: Q: The Court, I think, understands that, but apart from being uncomfortable I am trying to find out whether you recognise it, looking in the mirror, that is what you did. If you don't I would like you to explain to me that what you did was not fraudulent? A: I don't like the use of the word 'fraudulent' but I believe it was. It was an action which led to money passing hands, yes, so in that sense it is right but there was no benefit to me. If anything, it has been nothing but detriment to me and it has cost me dearly and my family dearly and it has destroyed my reputation. Q: I will ask you the question again, do you now recognise that what you did was fraudulent or do you have a reason why you think that what you did was not fraudulent? A: I believe that my action was fraudulent." It was suggested in cross-examination that, although the appellant received no fee for the false certificate, he enjoyed certain economic advantages from his consultancy with the Title Conveyancing Company. Hence, it was suggested, he derived indirect benefits from his misconduct. He denied that he gave any consideration to any such benefits. He asserted complete independence of action when advising clients referred to him by the Title Conveyancing Company. I would be prepared to accept that his conduct was not motivated by any perception of direct or indirect gain but was intended to be of help to Ms Goode and, as he believed, to the mortgagors facing the urgent necessity to obtain a certificate to replace that of Mr McConnell which had been rejected. Evaluation of the factors supporting removal. In considering this appeal, there are four factors which weigh against the appellant and support the determination reached by the Tribunal: 1. That he knowingly and falsely signed a certificate as a solicitor which he knew others would act upon; 2. That he knowingly and falsely misled a fellow practitioner who enquired about the circumstances of the giving of the certificate. Cf New South Wales Bar Association v Smith, Court of Appeal, unreported, 9 May 1991; (1991) NSWJB 34 (SLG). When given an opportunity to do so, in candour to a fellow practitioner, he refrained from correcting his earlier error; 3. That he failed to perceive the seriousness of his misconduct and in particular, until the proceedings in this Court, failed to perceived that it amounted to fraud. Cf Kennedy v The Council of the Incorporated Law Institute of New South Wales (1939) 13, ALJ 563 (HC); and UARASER v THE COUNCIL OF THE LAW SOCIETY OF NEW SOUTH WALES (Kirby PY 4. That a Tribunal comprising fellow practitioners, having before it all the relevant material concluded that, by the standards of the profession his behaviour was dishonourable and disgraceful and required removal of his name from the roll. I acknowledge the force of each of these considerations. However, in the end, based partly upon my assessment of the appellant and his answers to the questions of counsel and the Court, I have concluded that a resolution of the case short of removal of his name from the roll is called for. That conclusion warrants the determination of the appeal in his favour and the substitution of a fresh determination within those provided by s163(1). Consideration of countervailing factors: So far as the giving of the false certificate is concerned the following matters are properly taken into account in favour of the appellant or as mitigating the seriousness of his misconduct: 1. There is no suggestion that the appellant ever previously or thereafter whilst a solicitor acted in a dishonourable or disgraceful way; 2. He did so on this occasion as a result of a momentary lapse. This was not a case involving a course of conduct pursued over a long time. It was an isolated, although serious, error of judgment. It is to be viewed and dealt with as such. Cf In the matter of Yael Jimenez (1992) 2 LPDR 8, 18; 3. He made no charge for the certificate. He stood to gain no personal benefit unless it was the appreciation of a colleague in the Title Conveyancing Company. No profit or financial gain was won by him. Although this is not of itself an exculpating factor it removes from this case an element of aggravation which, sadly, is often present in cases of professional misconduct. See O'Reilly v Law Society of New South Wales (1988) 24 NSWLR 204 (CA), 209, 215; Cf In the matter of Ian Burnham Mitchell (1992) 1 LPDR 6, 10; 4. He knew Mr McConnell, barrister. He had confidence in his legal ability to give a certificate. He had been assured, and accepted, that Mr McConnell had given the explanation necessary for the certificate. The case was not one where, in total indifference to the rights of the client to legal advice, the solicitor signed the certificate, recklessly disregarding the client's entitlement to have an explanation. He believed an explanation had been given, although he had no direct knowledge of this fact, did not know the precise contents of any such explanation and falsely stated that he himself had given it; 5. After initial prevarication, he acknowledged before the Tribunal and this Court that he had acted wrongly. He came to acknowledge in this Court that he had acted fraudulently; and 6. As events have transpired, there was no actual loss to any person. However, the significance of this consideration is limited. Recent cases emphasise the importance of a detailed and individualised explanation of a mortgage. The failure to provide proper explanations which will stand up to scrutiny present risks, particularly to mortgagees as Karavas showed. So far as misleading a fellow practitioner is concerned, the following considerations must be taken into account: 1. That the lack of candour to the fellow practitioner did not extend to a direct lie. However, little weight can be given to this consideration. It was clearly the intention of the appellant that the solicitor should draw the inference that a proper certificate had been given; 8 UNREPORTED JUDGMENTS 2. The lack of candour was itself directly related to the lie constituted by the false certificate. It followed within a very short time. It must be seen as part of the same course of deception into which, by the false certificate, the appellant had led himself; and 3. The appellant acknowledged both before the Tribunal and in this Court that he had acted wrongly. He came to acknowledge that he had acted fraudulently. So far as the suggestion of moral blindness is concerned, it is perhaps understandable that the appellant should baulk at the acknowledgment of fraud. He was confronted, in a public courtroom and in the presence of members of his profession with an assertion of particularly disgraceful conduct. I am prepared to accept that he did not intend to act disgracefully. He had rationalised in his own mind the propriety of what he was doing, its moral justification and its justification so far as the mortgagors were concerned. He failed to consider the position of the mortgagee, the potential position of the mortgagors and his own duties as a solicitor and officer of the Court. I accept the appellant's expression of contrition. I believe that, whatever doubts might earlier have existed, he came in the solemn circumstances of the appeal hearing at least, to a full realisation of the gravity of his misconduct, of its seriousness for legal purposes and of its offence to professional standards and to moral principle. Just as a failure to appreciate the full measure of error is relevant to exclusion from the company of the legal profession, so such realisation (even belated) is a consideration relevant to restoration to that company. Cf In the Matter of the Application of Noel Norman Dennis, Court of Appeal, unreported, 12 December 1988, per Samuels JA. I can understand the force of the contention that a person who acknowledges fraud is, by that acknowledgment, excluded from the company of the legal profession. But fraud manifests itself in a multitude of ways. For example in the law of insurance, fraud was formerly, without more, a reason to justify denial of indemnity by an insurer: whatever the nature of the fraud or of its consequences in the particular case. This stern rule was justified by the duty of the utmost good faith owed by the insured to the insurer. In the review of this area of the law, it was concluded that the courts should have the power to adjust more delicately the rights of the parties in cases: "\.. Where the loss of the insured's claim would be so seriously disproportionate of the harm which the insured's conduct has or might have caused." See the Law Reform Commission (Cth),Insurance Contracts (ALRC 1982) 118. This view was adopted by the legislature. See Insurance Contracts Act 1984 (Cth), s56(2). The duty of this Court is to protect the public, to uphold the standards of the legal profession and to mark the disapprobation of the conduct of legal practitioners who engage in fraud of whatever kind. Such duty raises legal and social considerations somewhat different from fraud in insurance claims. Insureds come from all backgrounds. Solicitors enjoy special privileges and submit to special duties as a consequence. However, fraud clearly manifests itself in a multitude of different ways. The fraud to which the appellant admitted in this case was potentially serious. But in the event, it had serious consequences only for the appellant himself. I do not believe that fraud as such, admitted or proved, requires in every case, without more, the removal of the name of a solicitor from the roll. It is necessary to examine in each case the nature of the fraud involved. Many acts of fraud will indeed require removal from the roll. In other cases, a less drastic determination will be appropriate. UARASER v THE COUNCIL OF THE LAW SOCIETY OF NEW SOUTH WALES (Kirby PB As to the respect which should be shown by this Court in appeals from The Tribunal to its views, I acknowledge fully the weight that must be given to the opinion of the Tribunal as reflecting the opinion of practitioners in the relevant branch of the legal profession. Cf Kennedy v Law Institute (above) 563. On the other hand, the solicitor for the Society did not, in his submissions before the Tribunal, call for the removal of the name of the solicitor from the roll. He suggested a fine. A number of recent cases drawn to the Court's attention show that fines have been imposed in cases where the solicitor has signed documents falsely, knowing that they will be acted upon. This Court must discharge its function, as Parliament intended, by determining the appeal brought to it. One of its functions is to ensure against uneven decisions in Tribunals, differently constituted. Consistency in such decisions, according to the appropriate standard, is a reflection of the ideal of equal justice under the law. Cf Lowe v The Queen (1984) 154 CLR 606, 610. Another function of this Court in such cases is to fix, for the Tribunal's own guidance, the standards to be observed in determinations, where the Court takes a view different from that taken by the Tribunal. Therefore, whilst taking into careful account the opinion of the Tribunal, reflected in its order, this Court is required to form its own view and, where necessary, to give effect to it in determining the appeal. Its orders, like those of the Tribunal are not made as such to punish the practitioner as such. They should go no further than is necessary to uphold proper standards and to protect the public interest. See Harvey v The Law Society of New South Wales (1975) 49 ALJR 363 (HC) at 365. Conclusion and orders: a second chance. As a result of the foregoing analysis I have concluded that the proved and admitted behaviour of the appellant was professional misconduct. But I do not believe that it requires the removal of his name from the roll. He should be afforded another chance. It is inconceivable that he would ever err in the same way again. I take into account, in coming to this conclusion, the appellant's age, his experience as a solicitor to date, the attitude of helpfulness which he appears to display to his clients and the good opinion expressed of him by a fellow practitioner and a Member of Parliament in statements placed before the Court. It is also impossible to ignore the fact that, by the operation of the Tribunal s order, the appellant has been disqualified from practice as a solicitor for more than seven months. I agree with the submission which was placed by the solicitor for the Society before the Tribunal. The appropriate determination of this case involves the imposition of a fine serious enough to mark the Court's strong disapproval of the appellant's misconduct. In determining the amount of that fine, it is necessary to make allowance for the fact that the appellant s name was removed from the roll and that he has been unable to practise as a solicitor for an extended time. It is also appropriate to take into account the modest nature of the appellant s practice, when his name was on the roll, and when he was working out of a cubicle at the Title Conveyancing Company in Wollongong. In my view the following orders should be made: 1. Appeal allowed; 2. Set aside the order of the Legal Profession Disciplinary Tribunal so far as it provided that the name of the appellant be removed from the roll of solicitors. Confirm the order of the Tribunal in relation to the costs of proceedings before it; Order that the appellant pay a fine of $7,000 to the Law Society of New South 10 UNREPORTED JUDGMENTS Wales in accordance with s167 of the Legal Profession Act 1987, such fine to be paid within a period of six months of this date; and 4. Order the appellant to pay the costs of the Law Society of New South Wales of the appeal; such costs to be assessed on a solicitor and client basis. If agreement between the appellant and the Society on the amount of such costs be not reached, either party to have liberty to apply to a single Judge of Appeal for further orders. Handley JA This is an appeal by a former solicitor from an order of the Disciplinary Tribunal established by the Legal Profession Act 1987 made on 19 December 1991 that his name be removed from the Roll of Solicitors. By s164(1) of that Act and s48(1)(a) of the Supreme Court Act the appeal lies to this Court. $164(4) provides: "An appeal shall be by way of a new hearing and fresh evidence, or evidence in addition to or in substitution for the evidence received at the original hearing, may be given." The appellant did not challenge the factual findings of the Tribunal and did not dispute that he had been guilty of professional misconduct. He sought however the setting aside of the order removing his name from the Roll of Solicitors. In support of the appeal the appellant filed an affidavit sworn by himself on 21 May 1992 which contained evidence in addition to that received at the original hearing. Counsel for the Law Society did not object to the Court receiving this additional evidence. The appellant also gave some additional oral evidence and was then cross-examined. Since the appeal is by way of a new hearing it follows that this Court is called upon to exercise its own discretion in determining the appropriate disciplinary action, unfettered by the Tribunal's exercise of its discretion. However the Court should give proper weight to that decision having regard to the Tribunal's special experience and its knowledge of the standards of conduct solicitors expect from each other. Compare the approach which the High Court adopted in "appeals" from decisions of the Commissioner of Patents and the Registrar of Trade Marks. See Hoffman-La Roche v Commissioner of Patents (1971) 123 CLR 529 and Eclipse Sleep Products Inc v Registrar of Trade Marks (1957) 99 CLR 300 at 308. The appellant's professional misconduct involved the giving by him of a false certificate that he had explained certain mortgage documents to a Mr and Mrs Livingstone. The appellant had not explained the mortgage documents to Mr and Mrs Livingstone at all. Indeed he had neither met them nor spoken to them. The certificate was fraudulent, having been given by the appellant to satisfy a requirement of the intended mortgagee and to induce it and its solicitors to complete the mortgage advance without further inquiry. See Demetrios v Gikas Dry Cleaning Industries Pty Ltd (1°391) 22 NSWLR 561. Some days after the false certificate was given the mortgagee's solicitor twice spoke to the appellant on the telephone about it. In the second conversation the appellant gave evasive answers to direct questions from that solicitor as to whether he had actually explained the mortgage documents to the Livingstones. When the transaction was later investigated by the Law Society the appellant readily admitted the falsity of his certificate and that he had been guilty of professional misconduct. However he offered a number of explanations and excuses for his conduct which in my view tended to demonstrate that he had failed to fully understand the nature of his wrongdoing. His attitude persisted before this Court. For example, the appellant thought that because he had been UARASER v THE COUNCIL OF THE LAW SOCIETY OF NEW SOUTH WALES (Handléy JA) told that a Mr McConnell, a non-practising barrister, had earlier given a similar certificate, and that barrister was known to him to be "a very reliable methodical person" who would have thoroughly explained the mortgage documents to the Livingstones, it was somehow in order for him to give the false certificate. The appellant's attitude in this matter was extremely foolish because at the time Mr McConnell lived in Sydney, the Livingstones lived near Wagga, and the appellant lived and practised in Wollongong. The appellant also thought that because the certificate was required urgently in order to complete a conveyancing transaction being handled by the Property Transfer Company on behalf of the Livingstones this somehow made the giving of a false certificate less reprehensible. Again that is not so. There are no excuses for fraud and the attempt by the solicitor to offer excuses served only to indicate what in my opinion was an entirely unsatisfactory approach on his part to the high standards of personal honour and integrity which were called for by his membership of an honourable profession. The appellant also failed to recognise until very late in his evidence before this Court that his conduct had been fraudulent. He seemed to think that since he did not personally profit from his falsehood and did not intend to cause the mortgagee any financial loss he had not been guilty of fraud. Neither of these matters prevented the solicitor's conduct from being fraudulent. The solicitor attempted to distinguish between giving a false certificate which was wrong and giving a fraudulent certificate which was worse and had failed to appreciate that he had been guilty of conduct of the latter kind. It is a sad reflection on the appellant that having committed fraud and being struck off the Roll of Solicitors for this misconduct he still did not recognise that his conduct had been fraudulent until questions from the Bench brought that home to him for the first time. The appellant also relied upon the fact that, as events turned out, his fraud had caused no loss to the mortgagee. However it is well established that this neither excuses nor mitigates a finding of professional misconduct which depends upon the conduct of the solicitor at the relevant time and not on what turns out to be the consequences of that conduct at a later point of time. See Law Society of New South Wales v Moulton (1981) 2 NSWLR 736 at 740. This Court must now decide for itself what disciplinary action against the appellant is warranted in the light of his proved misconduct and his evidence before this Court. The proper test is not in doubt. In Southern Law Society v Westbrook (1910) 10 CLR 609 at 612 Griffith CJ quoted with approval the test as formulated by Lopes LJ in In Re Weare (1893) 2 QB 439 at 448: "\.. the question which the court... ought always to put to itself is this, is the court, having regard to the circumstances brought before it, any longer justified in holding out the solicitor in question as a fit and proper person to be entrusted with the important duties and grave responsibilities which belong to a solicitor." It is also well established that the jurisdiction of the Disciplinary Tribunal and of this Court in matters of this kind is protective and not punitive. See Southern Law Society v Westbrook at 612613. As Isaacs J said in that case at 626: "The discipline exerted by the court looks entirely to the future." This principle was re-emphasised and applied in New South Wales Bar Association v Evatt (1968) 117 CLR 177 at 183-4: "The power of the court to discipline a barrister is,... entirely protective, and notwithstanding that its exercise may involve a great deprivation to the person disciplined, there is no element of punishment involved." 12 UNREPORTED JUDGMENTS It is a matter of considerable concern that the appellant's full recognition of the character of his misconduct was only achieved during the course of his evidence in this Court. However in my view full recognition was then achieved. The appellant no longer fails to understand the error of his ways, a situation which would have been fatal to his appeal to be restored to the Roll of Solicitors. See New South Wales Bar Association v Evatt at 184. In a case such as the present proof of the appellant's fitness to be restored to the Roll of Solicitors depends very much on the Court being satisfied that he fully understands his past error. It is important that a solicitor asked to "cut some corner" and sign a false certificate which will save some person time trouble or expense should be able to recognise that he (or she) is being asked to commit fraud. A solicitor's ability to recognise this should enable him (or her) to reject the request. Indeed one would hope that the solicitor would tell the person making such a request that compliance would involve committing fraud. This should not only ensure that the request is promptly withdrawn, it should also contribute in a small way to the maintenance and improvement of ethical standards in the community. A solicitor who cannot even recognise that compliance with a request to sign a false certificate will involve him (or her) in committing fraud is far more likely to sign such a certificate. Such a solicitor is a menace not only to those who rely on certificates given by solicitors but also to the profession itself. In these circumstances is this Court justified in holding the appellant out as a fit and proper person to be a solicitor? Do the facts demonstrate unfitness to be a solicitor or can the Court find that this was "some isolated or passing departure from proper professional standards amounting to something less than proved unfitness"? (117 CLR at 183). In an endeavour to answer this question for myself I have looked at the relevant reported decisions. These include In Re Salwey (1894) 15 NSWLR 117 where the solicitor was struck off for fraud and perjury although the fraud was not against a client. The Court however indicated that if after the lapse of some years the respondent was able to bring forward testimonials of good character he might possibly induce the Court to restore him to the Roll. In Re Coleman (1905) 5 SR (NSW) 272 the solicitor, at a client's request, wrote to a mortgagee suggesting that a stock mortgage be back dated and the amount of the advance falsely inflated to protect one creditor of the client to the detriment of another. The suggestion was not acted on. The solicitor was suspended from practice for twelve months. In Re Daly (1907) 7 SR (NSW) 561 the solicitor had made false and fraudulent representations to counsel to induce the latter to accept a brief without payment of the fee in advance. He later gave false evidence to the Full Court which the Court rejected and categorised as perjury. He was suspended from practice for eighteen months, and the Chief Justice said (564): "The respondent is apparently a young man, who has not long been practising his profession. If he had had a longer experience it may be that we should have felt it to be our duty to strike his name off the Roll. We have decided to take a more lenient course, believing that this will act as a warning to him." In Re Drew (1920) 20 SR (NSW) 463 the solicitor prepared letters which he knew were to be signed by his client and fraudulently back dated. They were never used. The Full Court ordered that he be suspended from practice for six months. Finally in Re a Solicitor (1935) 52 WN (NSW) 182 the Full Court found that the solicitor was a party to providing sham bail and had failed to realise until UARASER v THE COUNCIL OF THE LAW SOCIETY OF NEW SOUTH WALES (Cripps JAB very late in the proceedings that he had done anything improper. He was suspended from practice for six months. Compare Cahill v Law Society (1988) 13 NSWLR 1. I am satisfied from this review of the earlier decisions that if this Court were now to allow this appeal it would not be departing from prior authority, and would not be sanctioning any lowering of the standards which its predecessors had required from the solicitors of this Court. In my opinion however the Tribunal acted correctly on the material before it in striking the appellant from the Rolls. A solicitor who commits fraud without knowing that he has done so in my opinion is not a fit and proper person to remain on the Roll. That situation has now changed. I believe that this Court would now be justified in concluding that this appellant will never again give a false certificate. So far as the evidence reveals, and there is nothing to suggest otherwise, this was "an isolated... departure from proper professional standards". The appellant is still young, with limited experience, and as a result of these proceedings he will be both a sadder and a wiser man. He has now been off the Roll of Solicitors for over seven months. In my opinion therefore the requirements of this disciplinary and protective jurisdiction will be fully met if this Court were to make the orders proposed by Kirby P. Cripps JA This is an appeal pursuant to the provisions of s164(4) of the Legal Profession Act 1987 against the determination of the Legal Profession Disciplinary Tribunal made on 19 December 1991 following a complaint made to it pursuant to s135 of the Legal Practitioners Act 1987. The Law Society Council complained to the Tribunal that Mr Fraser, a legal practitioner and a holder of a Practising Certificate was guilty of professional misconduct. The complaint against Mr Fraser was that on 13 August 1990 he signed a certificate as follows: "Certificate of Explanation. I, Paul Fraser, solicitor, do hereby certify that I have explained the mortgage documents and memorandum to the mortgagors, Ian Maxwell Livingstone and Jakita Ann Livingstone. Dated this thirteenth day of August 1990." The document was signed by Mr Fraser. He did not explain the mortgage documents and the memorandum to Mr or Mrs Livingstone on 13 August 1990 or on any other day. Before the Tribunal, Mr Fraser did not deny the allegation. Nor did he deny that his conduct amounted to professional misconduct as defined by s123 of the Legal Professions Act 1987. His case was that he had acted foolishly; that he recognised the seriousness of his mistake; that he had received no personal gain or benefit from his conduct; and that he was not in breach of any requirement imposed by law. On his behalf it was submitted that the appropriate order of the Tribunal should be that he be reprimanded. On behalf of the Law Society it was submitted that a reprimand would not be appropriate and that the Tribunal "ought to have consideration to levying a considerable fine in the circumstances of this particular case". The order of the Tribunal was that Mr Fraser's name be removed from the Roll of Solicitors and that he pay the costs of the proceedings. An appeal from the Tribunal to the Court of Appeal is by way of a new hearing and fresh evidence or evidence in addition to or substitution for the evidence received before the Tribunal may be given (s164(4)). Although not stated in terms, it is accepted that the Court of Appeal has the power or jurisdiction to make any order which the Tribunal could have made. Upon the matter coming on 14 UNREPORTED JUDGMENTS for hearing, Mr Fraser sought leave to tender additional evidence. The application was not opposed and an affidavit by Mr Fraser was read in which he explained in more detail than that given to the Tribunal the circumstances surrounding the admitted misconduct. Mr Fraser was cross examined by Mr Garling on behalf of the Law Society and was asked certain questions by members of the Bench. The circumstances leading to the order of the Tribunal are as follows. During the middle of 1990, Mr and Mrs Livingstone wished to purchase a house at 82 Hill Street, Junee. They decided to use the services of the Property Transfer Company (which later changed its name to Title Conveyancing Company). Mr and Mrs Livingstone signed the contract of sale. The contents of the contract were, apparently, explained to them by Ms Stewart, an employee of Property Transfer Company. After explaining the contract, she then told them she would ring Mr McConnell who she described as a barrister in order that the contents of the mortgage documents could be explained to Mr and Mrs Livingstone. She asked Mr and Mrs Livingstone, which of them wished to speak to Mr McConnell. According to Mr Livingstone, Mr McConnell's only advice was as follows: "How are you going. I have to explain these documents to you. Virtually what it comes down to is that you have to have the money in the bank before the due date of each payment otherwise you will be charged interest on the interest. Do you understand?" Mr Livingstone said "yes". Mr McConnell then said: "Do you have any questions?" Mr Livingstone asked if fortnightly repayments could be made and Mr McConnell is alleged to have said: "You will have to take that up with the lending authority and do you have any other questions?" Mr Livingstone said "no". That appears to be the only conversation Mr and Mrs Livingstone had with any legally qualified person concerning the transaction. Contracts were exchanged on 16 July 1990 about three days after the conversation referred to above. Prior to completion of the transaction, and in about early August 1990, Mr and Mrs Livingstone were told by Ms Goode (who had replaced Ms Stewart as the officer handling the matter) that the mortgagee's solicitor was not satisfied that Mr McConnell held a professional indemnity policy of insurance and that therefore they would have to speak with "our solicitor in Wollongong" - a reference to Mr Fraser. An appointment was made for Mr and Mrs Livingstone to see Mr Fraser. They attended but Mr Fraser did not. Mr Livingstone said that Ms Goode said "I have not been able to get on to him. If anybody asks say that you spoke with him". Later, Ms Goode asked Mr and Mrs Livingstone to produce a "s149 certificate" (a reference, presumably, to the provisions of s149 of the Environmental Planning and Assessment Act 1979). The certificate was given to Ms Goode and settlement took place on 27 August 1990. Mr and Mrs Livingstone had arranged to borrow money from the Murrumbidgee Co-operative Housing Society and to secure repayment of the loan by mortgaging the subject property to the Society. Mr Charles Morton, solicitor, from Wagga Wagga, acted on behalf of the Society. On 17 August, he telephoned the Property Transfer Company and asked to speak to Mr Fraser. By that time he was in receipt of "the Certificate of Explanation" referred to above and dated, as I have said, on 13 August 1990. Mr Morton asked Mr Fraser whether he in fact signed the Certificate. Mr Fraser said he had. Mr Morton then asked him whether he had a full Practising Certificate. Mr Fraser said he did. UARASER v THE COUNCIL OF THE LAW SOCIETY OF NEW SOUTH WALES (Cripps JAB Shortly afterwards and on the same day, Mr Morton rang Mr Fraser again and asked him whether he had explained the mortgage documents and the memorandum to Mr and Mrs Livingstone personally or by telephone. Mr Fraser said: "You have got the Certificate of Explanation. You can rely on that. Mr Morton said: "But did you explain the requirements to the Livingstones?" Mr Fraser replied: "You've got the Certificate of Explanation. You can rely on that, and that's all that needs to be said". Mr Fraser gave evidence before the Tribunal. He acknowledged the correctness of Mr Morton's evidence. He was then asked the following questions and gave the following answers: "Q: You agree with me that having signed the false Certificate back on the 13, you in this conversation had an opportunity, in fact two opportunities because the man rang twice, to correct the situation? A: I don't know quite what you mean. It was a little bit late to talk to the Livingstones. I had already given the Certificate. Q: You had the opportunity of telling the truth about the Certificate. A: I was rather annoyed at the fact that this fellow from Wagga would actually ring me. Q: Answer the question. In those two telephone conversations with Mr Morton did you or did you not have the opportunity of telling the truth. A: Yes, I would have to admit that I could have told the truth, yes. I could have said that I did not speak to these people. Q: Are you aware that the mortgage transaction about which you certified the document, are you aware that that transaction was completed? A: Yes. I was told a number of weeks later it was completed, yes. Q: Would you agree that if you had told the truth about the certificate during those telephone conversations, the transaction would not have proceeded. A: I believe it would not have proceeded, no. Q: As a solicitor you would be aware that money had been paid over and that you had induced that situation by making a false certificate, would you agree with that proposition? A: I would agree with that, yes." In his affidavit dated 21 May 1992, Mr Fraser said that prior to signing the Certificate of Explanation he had been advised by Ms Goode, whose word he had no reason to doubt, that Mr and Mrs Livingstone were "in a bit of trouble" and that the matter was urgent. She told him that Mr McConnell had already prepared a Certificate of Explanation but that the solicitor for the mortgagee had not accepted it because Mr McConnell could not demonstrate that he had a Practising Certificate or that he did not have professional indemnity insurance. He was also told that it was not easy to get in contact with Mr and Mrs Livingstone. Mr Fraser, in evidence, said he had known Mr McConnell for some time and he believed him to be reliable and methodical and that if he had explained the mortgage documents to Mr and Mrs Livingstone he would have done so thoroughly. However, he was not aware of what Mr McConnell told Mr and Mrs Livingstone nor did he speak to Mr McConnell about the matter. He says he did not deny the evidence of Mr Morton and that he agreed he was evasive in the conversation referred to above. He said, however, that what he was endeavouring to do, given the fact that he had signed the Certificate without speaking to Mr or Mrs Livingstone, was to assure Mr Morton that the Certificate could be acted on 16 UNREPORTED JUDGMENTS for the mortgagees' purposes. Further, he said that although he had stated before the Tribunal that he believed that the transaction would not have proceeded had he told the truth about the Certificate, he intended to say that had he told the truth about the Certificate it would have delayed the transaction. He said he did not believe at any time that the transaction would not have proceeded because, he said, someone else would have given a Certificate. I have had the opportunity of seeing Mr Fraser give evidence in the witness box. I accept his evidence. He acknowledged, as he always has, that his conduct did not measure up to the standard required of solicitors and asked the Court to accept that his conduct amounted to "temporary lapse which arose out of the belief that he was not acting against the interests of any party". It was put to Mr Fraser that he knew when he gave the Certificate and when he answered questions by Mr Morton a couple of days later with respect to that Certificate, his conduct was fraudulent. He did not deny that he had behaved badly and that his conduct was deceitful. However, he was reluctant, at first, to concede that his conduct should be characterised as fraudulent. Later, he acknowledged that what he had done amounted to a fraudulent representation to the mortgagee (see Demetrios v Gikas Dry Cleaning Industries Pty Ltd (1991) 22 NSWLR 561). Mr Fraser's refusal to acknowledge that his conduct was fraudulent was relied on by Mr Garling, on behalf of the Law Society, as demonstrating a failure to understand and appreciate the seriousness of his conduct and that his ignorance should be treated as ignorance of "general principles applicable to common activities of a solicitor" (see Law Society of New South Wales v Moulton [1981] 2 NSW LR 736 at 741). In fairness to Mr Fraser, it must be borne in mind that before the Tribunal and before this Court he did not dispute that his conduct was deceitful and that it fell short of professional standards. I do not think his reluctance to label his conduct as fraudulent has the significance the Law Society submits. Mr Fraser believed that Mr and Mrs Livingstone had been told by Mr McConnell what he would have told them had he interviewed them. It was not as though he was representing to the mortgagee that Mr and Mrs Livingstone had had the mortgage explained to them when he knew they never had or had no reason to suppose they had. He believed the mortgage had been properly explained. His professional misconduct was representing that he was the person who had explained the mortgage. When answering questions under cross examination, he was disputing the degree of culpability of his conduct. I do not regard his reluctance to make a concession that he was guilty of fraud as demonstrating ignorance of his obligation. Rather, I think, it was conduct borne of a reluctance to continue to debase himself publicly. Mr Fraser was born on 17 July 1958. He qualified as a solicitor and was admitted to practise in 1982. He holds degrees in Economics and Law. He was a sole practitioner at the time of the conduct charged and had the use of a cubicle at the offices of Title Conveyance Company, Wollongong, which he used as an interview room and from which he undertook his legal work. Most of his work was associated with the work undertaken by the Title Conveyance Company. He relied on his previous good character and references from Mr Sullivan, the local Member for Wollongong and Mr Devitt, a solicitor from Dapto. Both referees spoke of his diligence and dedication and competence. It was submitted by the Law Society to the Tribunal and in its written submissions to the Court that the references were of limited value because it could not be assumed that the people who gave them were aware of the facts disclosed. Mr Fraser has sworn that he UARASER v THE COUNCIL OF THE LAW SOCIETY OF NEW SOUTH WALES (Cripps JAY told Mr Sullivan and Mr Devitt the circumstances of his misconduct and his statement to this effect was not challenged. The strength of the Society's case against Mr Fraser is that not only did he furnish a Certificate which he knew to be false and which he knew was intended to be relied on by the mortgagee but that he did not take the opportunity to disabuse Mr Morton when he could have done so. There can be no question that that conduct amounted to professional misconduct. Furthermore, the circumstance that he did not charge for the Certificate is, I think, irrelevant. I have come to the conclusion that the appellant recognises the extent and gravity of his conduct and that it fell far short of the standards required to be observed by practising solicitors. In formulating the order propose, I place on record that I have paid no regard to any claim of personal hardship and I note that it has not been put that Mr Fraser's conduct was the result of pressure of work. The essential function of the Court is not to decide an appropriate punishment. It is to determine what order should be made bearing in mind the evident purpose of the legislative provisions, ie, to protect members of the public by not exposing them to persons who are unfit to practise as solicitors and to promote and maintain public confidence in the legal system. Section 163 of the Legal Professions Act 1987 provides that if the Tribunal is satisfied that a legal practitioner is guilty of professional misconduct, it may order the practitioner's Practising Certificate to be cancelled or suspended; order the practitioner's name be removed from the Roll of Solicitors; order that the practitioner pay a fine or a combination of any of those things. Notwithstanding that a fine is ordinarily seen in the nature of a punishment, it must be assumed that the imposition of a fine is regarded by the legislature as an appropriate means whereby public confidence in the legal system can be maintained. I do not think Mr Fraser is unfit to practise by reason of his proved misconduct. In my opinion, the imposition of a fine will meet the demands of justice in this case. I would set aside the order of the Tribunal removing Mr Fraser's name from the Roll of Solicitors and I would substitute therefor that Mr Fraser pay a fine in the sum of $7000. The appellant to pay the respondent's costs of the hearing before the Statutory Committee and of the appeal. 1. Appeal allowed; 2. Set aside the order of the Legal Profession Disciplinary Tribunal so far as it provided that the name of the appellant be removed from the roll of solicitors. Confirm the order of the Tribunal in relation to the costs of proceedings before it; 3. Order that the appellant pay a fine of $7,000 to the Law Society of New South Wales in accordance with s167 of the Legal Profession Act 1987, such fine to be paid within a period of six months of this date; and 4. Order the appellant to pay the costs of the Law Society of New South Wales of the appeal; such costs to be assessed on a solicitor and client basis. If agreement between the appellant and the Society on the amount of such costs be not reached, either party to have liberty to apply to a single Judge of Appeal for further orders. Counsel for the Appellant: S Norrish QC / J Berwick Instructed by: Ian M Genge Counsel for the Respondent: PR Garling 18 UNREPORTED JUDGMENTS Instructed by: F Smith (Law Society of New South Wales)