The Council of the Law Society of NSW v Beverly [2008] NSWADT 251

CITATION: The Council of the Law Society of NSW v Beverly [2008] NSWADT 251 This decision has been amended. Please see the end of the decision for a list of the amendments.

DIVISION: Legal Services Division

APPLICANT The Council of the Law Society of New South Wales PARTIES: RESPONDENT Simon Robert Beverly

FILE NUMBER: 072040

HEARING DATES: 18 August 2008

SUBMISSIONS CLOSED: 18 August 2008

DATE OF DECISION: 4 September 2008

BEFORE: Haylen W - J (Deputy President); Molloy G - Judicial Member; Bennett C - Non-Judicial Member

CATCHWORDS: Solicitor – Disciplinary application - professional misconduct - witness signatures when not present

MATTER FOR DECISION: Principal Matter

LEGISLATION CITED : Legal Profession Act 2004

APPLICANT L W Pierotti, solicitor REPRESENTATION: RESPONDENT N Carney, barrister

The Tribunal makes the following Orders: ORDERS: (a) the solicitor, Simon Robert Beverly, be fined the sum of $2,500.00 (b) the solicitor be publicly reprimanded (c) that the solicitor pay the costs of the Applicant in the sum of $3,500.00.

REASONS FOR DECISION 1 In November 2007, the Council of the Law Society of New South Wales ("the Law Society") filed in the Tribunal an Application for Original Decision seeking disciplinary action under The Legal Profession Act 2004 be taken against a solicitor, Simon Robert Beverly. The orders sought by the Law Society were: (1) The solicitor to be fined. (2) The solicitor be publicly reprimanded. (3) The solicitor pay the costs of the Applicant. (4) Such further order as the Tribunal deems appropriate. 2 The Application alleged that Mr Beverly was guilty of professional misconduct in that he had falsely witnessed an affidavit. The particulars of the complaint were set out in some detail and revolved around Mr Beverly acting for Hy-Tec Industries Pty Ltd ("Hy-Tec") and engaging in the recovery of outstanding monies from various account clients of that company. In undertaking this work, Mr Beverly was instructed by and was well acquainted with the credit manager of the company, Ms T Loureiro. In late November 2004, Hy-Tec placed the recovery of a particular debt in the hands of agents and instructions were given to issue an Bankruptcy Notice against a Mr Constable who had failed to pay a debt of over $15,000.00 to the company after the company had obtained judgement in the Local Court. Mr Beverly was instructed to proceed with the recovery of the debt on behalf of Hy-Tec. 3 By late April 2005, there were some discussions with Mr Constable whereby he had offered to pay the debt by instalments but Ms Loureiro was concerned that the matter had been lingering and that there had been previous representations along the same lines. By early May 2005, Mr Beverly had received a written communication from Mr Constable offering to pay the debt by monthly instalments whereupon Mr Beverly wrote to Ms Loureiro seeking her instructions. Apparently unknown to Mr Beverly, Mr Constable subsequently contacted Ms Loureiro to arrange payment of the debt by instalments and she gave instructions to one of two members of the staff of the agent that she was happy to accept the instalment arrangement and requested them to stay any further action in respect of the debt. Between 10 and 26 May 2005, Mr Constable paid $2,000 to Hy-Tec towards discharging the debt. 4 By letter dated 26 May 2005, Mr Beverly wrote to Ms Loureiro referring to instructions to proceed to bankrupt the Judgment Debtor, Mr Constable, in the absence of him committing to pay the outstanding judgement debt. That letter expressed the view that it was unlikely that Mr Constable would be able to pay the debt with accrued interest and costs within a period of 12 months. Enclosed was a final Affidavit of Debt to enable a Sequestration Order to be obtained against Mr Constable when the matter was next listed before the Federal Magistrate on 9 June 2005. The letter continued: We ask that you attend to print the attached affidavit and sign same next to the small cross that appears towards the bottom right hand of the document, and then post same to us at your earliest convenience, undated and unwitnessed ... . In the event that we receive a payment and commitment to satisfy the outstanding Judgment Debt, together with accrued interest and costs, within the required period we will contact your office for your further instructions; in the absence of which we will automatically proceed to bankrupt the Judgment Debtor. We await your early advices and should you have any queries regarding any aspect of the matter please do not hesitate to contact the writer. 5 In due course the undated, signed but unwitnessed Affidavit of Debt was returned to Mr Beverly. On or about 14 June 2005, Mr Beverly completed the Affidavit of Debt by dating it as having been sworn on 14 June 2005 and by signing it to indicate that he had witnessed Ms Loureiro's signature on that date when, in fact, he had not done so. On 15 June 2005, Mr Beverly filed the executed Affidavit of Debt in the Federal Magistrate's Court. On 15 June 2005, the Court made an Order appointing Mr Geoffrey McDonald as Trustee to the bankrupt estate of Mr Constable. In August 2005, the Trustee wrote to Mr Constable advising him of his bankruptcy and requesting the provision of certain information to complete a Statement of Affairs. Mr Constable then telephoned Ms Loureiro regarding the debt. Ms Loureiro indicated that she had earlier given instructions that the bankruptcy proceedings be terminated and undertook to make telephone enquiries of Mr Beverly. Thereafter, a process was put in train that ultimately led to the Court setting aside the Sequestration Order, dismissing the Creditor's Petition in proceedings where the Court was critical of Mr Beverly's role and ordered that he pay the costs of the Applicant and the Trustee on an indemnity basis. 6 In late December 2007, Mr Beverly lodged in the Tribunal his Reply to the Law Society's Application. In that Reply he admitted many of the particulars, but referred to the contents of an affidavit he had sworn for the purposes of the proceedings in the Federal Magistrate's Court (which was ultimately not put before the Court on a misunderstanding that no Orders were being sought against Mr Beverly). In that affidavit Mr Beverly stressed that when the proceedings were pursued in the Court and as at 26 May 2005, he had not received any instructions contrary to the earlier instructions to proceed with the Creditor's Petition. He stated that at no time was he ever instructed or advised that the matter had settled, nor was he advised not to pursue the Creditor's Petition. The first time he became aware that an arrangement had been struck between the parties was a telephone conversation with Ms Loureiro on 12 September 2005 7 In his Reply Mr Beverly stated that, at all times during the course of the Bankruptcy Application, he believed he was acting in the best interests of his client and in accordance with his instructions. The matter had been listed for determination on at least four occasions and on each occasion the debtor and his client had been notified but at no time was he advised of any repayment arrangement or of any repayments having been made. Mr Beverly further noted that at the conclusion of the initial proceedings, he sent a letter to his client advising that the Sequestration Order had been made together with his final memorandum of fees. He did not receive any comment regarding the Orders that were made and the tax invoice was paid. 8 Mr Beverly concluded his Reply in the following terms: I acknowledge that my conduct regarding execution of the affidavit was improper and I again unreservedly apologise for my misconduct. I was familiar with the signature of Tracy Loureiro, having dealt with her in many contested matters over numerous years, and this aberrant conduct was undertaken purely to expedite completion of the matter that had been protracted by virtue of the defective nature of the Affidavit of Service of the Creditor's Petition and supporting affidavits. 9 At the Tribunal hearing, Mr Beverly filed and relied upon a further affidavit setting out the background whereby he came to falsely witness and date Ms Loureiro's signature. In that affidavit he stated that he had been a solicitor admitted to practice since 1983 and since mid-1984 had operated as a sole practitioner until he retired from legal practice in June 2006. He held a current Practising Certificate (Unrestricted Non Principal) issued by the Law Society valid to 30 June 2008 but stated that he had not practised during the period, and did not intend to renew his Certificate as he was now engaged in his wife's real estate business in the capacity of marketing director. He set out his personal details. 10 Mr Beverly stated that, during the entire period of his legal career, he had practised law almost exclusively in the area of commercial litigation and debt recovery/solvency for and on behalf of numerous corporate clients. In that capacity he had been engaged by a number of large and well-known firms. Between 2002 to April 2006 he had acted for and on behalf of Hy-Tec in approximately 35-40 matters involving the recovery of outstanding monies from various account clients of that company. On all occasions he received instructions to act for the company from either the Credit Manager Ms Loureiro, or Mr Boyton the Licensed Commercial Agent who was authorised by the company to act on its behalf in such matters. The scope of the instructions varied from the commencement and prosecution in Local and District Court proceedings to obtaining judgements, whether on a defended or default basis and thereafter proceeding with Bankruptcy or Winding-Up applications to enforce the judgements. As a result of that litigation and the numerous occasions that he had met Ms Loureiro to obtain witness statements, sign affidavits and attend Court to provide evidence on behalf of the company, he was very familiar with her signature. During this period he was in communication with Ms Loureiro on at least a fortnightly basis. Because of other clients, Mr Beverly had almost daily contact with Mr Boyton particularly in relation to instructions to proceed with the issue of Writs of Execution, Garnishee Orders and enforcement options. It was Mr Beverly's invariable practice that any affidavits required to be executed would be provided to Mr Boyton who would attend to the client and witness their signature and thereafter return the document to Mr Beverly or alternatively, file the document in the relevant Court to initiate the necessary process. 11 During June 2005, Ms Loureiro was expecting or had just given birth to her second child and was attending work on one or two days per week. While Ms Loureiro could be contacted at home or on her mobile telephone, that communication was considered an intrusion and to be exercised only in instances of great urgency. There was limited support available to the credit department at that time. 12 Some detail was provided of the circumstances in which he had become dissatisfied with the handling of affidavits by Mr Boynton and the difficulties created for Court proceedings. In the light of his concern that Mr Boyton would not be able to remedy a defective Affidavit of Service in time for the next hearing and in light of the difficulties experienced at the time in communicating with Ms Loureiro, Mr Beverly stated that he "foolishly decided to email the affidavit to her" having formed the view that, in order to ensure that the matter was finalised at the first available opportunity, he would hold the signed affidavit and complete it by witnessing her signature and dating the document within the required three day pre-hearing period. Before he proceeded on this basis he had attended Mr Boyton on the day before the final hearing date to receive the correct version of the Affidavit of Service and to confirm his instructions to proceed. Mr Beverly's affidavit then continues: The basis for this improper behaviour was purely to ensure the earliest possible conclusion of the proceedings, to minimise the inconvenience to Tracey (Ms Loureiro) at this time, during which she was pre-occupied with her maternal priorities, and avoid further embarrassment to Mr Boyton arising from the continued need for adjournments. I gained no personal benefits from these actions and indeed have suffered significant financial loss flowing from the indemnity cost orders to the tune of $47,000.00 13 After the issue with Mr Constable's case arose, Mr Beverly noted that he had been paid by Hy-Tec Industries, continued to perform work for them and had received no criticism of the legal services he had provided to that company. He had prepared an affidavit for the purposes of the proceedings to set aside the Sequestration Order, placing it in the context now emphasised before the Tribunal. Mr Beverly explained that he did not pursue that course when he was led to believe that no orders would be sought against him in the Federal Magistrate's Court. Mr Beverly also disclosed that in 1990 he had received a reprimand from the Law Society arising from arrangements he had made to appear at a later time in a Local Court. 14 Mr Beverley concluded his affidavit as follows: In conclusion I again unreservedly apologise for my foolish, unethical and completely aberrant behaviour in this matter and the inconvenience and impact that has resulted therefrom to the Law Society of New South Wales, this Tribunal, and all those, including my fellow practitioners, who have, or may be, aggrieved by the conduct. 15 Before the Tribunal, Mr Beverly also relied on affidavits from Erik George Maranik and Monica Sylvia Ross-Maranik. The deponents had known Mr Beverly from the late 1980s/early 1990s and they spoke highly of his professional approach and how this incident was inconsistent with his usual professional standards. It was also noted that he had been much affected by this complaint and had demonstrated a level of deep regret, embarrassment and remorse for his conduct. 16 Early in the hearing the Tribunal raised with the parties that, in light of the substantial agreement about the facts of the matter, whether they were in a position to arrive at Consent Orders pursuant to section 564 of The Legal Profession Act 2004 and to have them considered by the Tribunal. After a short adjournment the parties were able to announce that, while it was undesirable to wait for the process under section 564 to be completed and because the matter was now listed before the Tribunal, the parties were nevertheless in agreement that an appropriate fine would be in the order of $2,500.00 and that the order for costs should be in the sum of $3,500.00. The Tribunal was invited to treat those indications as reflecting the parties' view of the matter but subject to any determination made by the Tribunal. The matter thereafter proceeded in the normal way with Mr Beverly giving evidence, being cross-examined and again confirming his unreserved apology to the Tribunal for his conduct. It was indicated that he had not renewed his Practising Certificate but that he would like to do so at some stage in the future although it would be unlikely that he would again practise in the field of debt recovery but would rather concentrate on a consultancy in insolvency, an area in which he was particularly experienced. 17 Having considered all of the material, the Tribunal is satisfied that Mr Beverly's conduct constitutes professional misconduct. Our attention was drawn to earlier Decisions of the Tribunal and its predecessors where it had been determined that the making of false statements, and in particular witnessing signatures in the absence of the signatories where the attestation stated that the signatures were witnessed in the presence of the solicitor witness, have been held to be professional misconduct. The solicitor's role in this process is highly significant, with parties and Courts relying upon such attestations. While there was an attempt to categorise Mr Beverly's action as a result of doing a good client a favour, it must be stated that his action strikes at the very core of the role of a solicitor and his conduct would be regarded within the profession as disgraceful or dishonourable. There are, nevertheless, a number of mitigating circumstances to be considered. Mr Beverly made a full and frank disclosure and before this Tribunal also disclosed an early, albeit minor, disciplinary matter. The process of rectification following his action was quickly attended to with the co-operation of the parties. Mr Beverly had become responsible for the costs of the proceedings in a substantial amount and had now taken up employment where it was said his after tax income was between $30,000.00 to $40,000.00 per year. It does appear that in a history of some 23 years in the profession as a solicitor with a reputation of which Mr Beverly was proud, he has taken to heart his misconduct and has been much affected by his transgression and the professional consequences of his action. While it was suggested, on his behalf, that his action was not designed with any dishonesty in mind but amounted to a shortcut and from a professional point of view was slovenly and sloppy, Mr Beverly fully accepted the seriousness of his conduct and at every opportunity has unreservedly apologised for his behaviour, not only to the Tribunal, the profession and the Law Society but also to the public whose confidence in the profession is to be protected. Having considered those matters, the Tribunal is satisfied that an appropriate fine to be imposed is $2,500.00 and that the sum agreed as to costs is also reasonable. ORDERS 18 The Tribunal makes the following Orders: (a) the solicitor, Simon Robert Beverly, be fined the sum of $2,500.00; (b) the solicitor be publicly reprimanded; (c) that the solicitor pay the costs of the Applicant in the sum of $3,500.00.