CITATION: Herat and Peet -v- Law Society of New South Wales [2000] NSWADT 2 DIVISION: Legal Services Division APPLICANTS Bruce Herat, Kenneth Clive Peet PARTIES: RESPONDENT Law Society of New South Wales FILE NUMBER: 992016 HEARING DATES: 03/12/99 SUBMISSIONS CLOSED: 12/03/1999 DATE OF DECISION: 01/06/2000 BEFORE: Goodman N - Judicial Member; Pheils J - Judicial Member; Miller PO - Member APPLICATION: Approval to employ a person convicted of an indictable offence (s.48K) MATTER FOR DECISION: Principal matter LEGISLATION CITED : Legal Profession Act 1987 Camille Edouard Dezarnaulds and Stephen Wawn v The Law Society of New South Wales (unreported Supreme Court 27 June 1995) CASES CITED: Law Society of New South Wales v Bannister (1993) 4 LPDR 24 In the matter of Iverson (unreported 26 July 1996 No 30 of 1995 ) APPLICANT REPRESENTATION: B Herat, solicitor RESPONDENT L Pierotti, solicitor ORDERS: Orders made on 3 December 1999; 1. Pursuant to s48K (2) ( c ) of the Legal Profession Act 1987 the Tribunal approves the employment of Kenneth Clive Peet, a person convicted of an indictable offence and who does not hold current practicing certificate, with Herat Solicitors.; 2. That employment is subject to the following conditions:; a)The duties undertaken are confined to an administrative position in the practice, including but not limited to:-; i)The setting up of work flow and quality control systems.; ii)Drafting legal documents for consideration by Mr Herat.; iii)Providing consultative advice in respect of marketing and maintaining client bases.; iv)Perusing and reporting on draft contracts for sale.; b)He is not to be a signatory of any office bank account or trust account.; c)Any access to the clients of Herat Solicitors is to be either supervised or with the knowledge of Mr Herat. ; 3. No order as to costs. 1 This is an application pursuant to s48 K (2) ( c ) of the Legal Profession Act 1987 by Mr Bruce Herat a legal practitioner to allow him to employ Kenneth Clive Peet, a former solicitor who has been convicted of an indictable offence. 2 Mr Herat initially brought the application in his name alone. Section 48K relevantly provides that:- "(1) It is professional misconduct if a ..solicitor has an associate whom the ....solicitor knows to be: (a) A disqualified person; or (b) A person who has been convicted of an indictable offence and does not hold a current practicing certificate. (2) Subsection (1) does not apply to an associate approved by: (a)... (b)... (c) in the case of a person who has been convicted of an indictable offence the Tribunal (4) An approval under this section may be subject to specified limitations of conditions. (5) A disqualified person or a person convicted of an indictable offence must not seek to become an associate of ...a solicitor unless the person first informs... the solicitor of the disqualification or conviction. Maximum Penalty: 10 penalty units." 3 At the Directions hearing on 30 June 1999 and at the outset of the hearing before this Tribunal the Law Society raised the issue as to who is the appropriate applicant in proceedings of this nature, namely the person convicted of the indictable offence or the solicitor wishing to employ the person. The terms of section 48K are not entirely clear on this point, both parties are liable to penalty pursuant to the section, subsection (1) rendering the legal practitioner guilty of professional misconduct, and subsection (5) and (6) making the convicted person liable for further prosecution and a fine. However subsection (2) appears to make it incumbent on the legal practitioner to make application to the Tribunal or else they will be guilty of professional misconduct. The convicted person is only liable for punishment if they fail to disclose the fact of their conviction to the employer. If that disclosure is not made obviously the employer would not know to make an application. 4 The Law Society referred the Tribunal to a decision of Iverson No 30 of 1995 unreported, dealing with a similar application under s48K prior to the 1997 amendments to the Legal Profession Act 1987. In that case the legal practitioner originally brought the application. Objection was made to the applicant, being the appropriate party, which resulted in the application by the legal practitioner being withdrawn and the convicted person substituted as applicant. In the matter of Stephen Wayne Beaufils 1998 , a decision of the Legal Services Tribunal, approves of the decision in Iverson . 5 In the decision of Camille Edouard Dezarnaulds and Stephen Wawn v The Law Society of New South Wales (unreported Supreme Court 27 June 1995), both the legal practitioner and the convicted person were parties to the proceedings. This decision does not directly deal with the question of who the appropriate applicant is pursuant to section 48K, it also deals with the section prior to the 1997 amendments. 6 The Law Society does not raise the issue of applicant as being a bar to application proceeding, but merely wishes this Tribunal to be properly advised. Mr Herat contended initially that he alone is the appropriate applicant. 7 Without determining the issue, the Tribunal invited Mr Herat, to amend his application and join the convicted person as a party to the proceedings. That invitation was accepted and leave granted to amend the application. This course was not opposed by the Law Society. KENNETH CLIVE PEET 8 Mr Peet was convicted on 25 July 1989 in the District Court of NSW of 2 counts of obtaining financial advantage by deception, 2 counts of obtain financial advantage by false or misleading statement and 2 counts of fraudulent misappropriation. A further 5 matters were taken into account on the ninth schedule of the Criminal Procedure Act. The offences occurred between 1983 and 1985, and involved the misappropriation of client's monies to the approximate value of $217,000. He entered pleas of guilty to the offences in the Local Court on 1 March 1989. He was sentenced on 25 July 1989 by His Honour Judge Gallen to a head sentence of 5 years with a non-parole period of 12 months. 9 At the time of the offences Mr Peet had been practicing as a solicitor in Hurstville. 10 The Solicitors Statutory Committee struck Mr Peet from the Roll of Solicitors as a solicitor on 3 April 1986. He did not appear before that committee, his legal representative after announcing his appearance told the Committee that "he wished to take no part in the proceedings but that was not to be construed as any disrespect to the Committee, nor to be taken as any concession as to any of the matters which may be put before the committee". EVIDENCE GIVEN BEFORE THE TRIBUNAL 11 After his release from gaol in September 1990, Mr Peet sought employment as an insurance investigator. He remained in that position until November 1993. His employer Roger Edward Gersbach gave evidence to the Tribunal as to the nature of the work he undertook. He was also cross examined as to his knowledge of the offences of which Mr Peet was convicted. Mr Gersbach told the Tribunal that he had been impressed by the candor with which he disclosed that fact of his conviction and incarceration. During his time as an investigator Mr Peet performed professionally and competently. 12 In November 1993, Mr Peet undertook employment with Home Corp Australia Pty.Ltd. Australia. His employer Maxwell Leishman gave evidence before the Tribunal, as to the duties undertaken which included overseeing legal and contractual matters and liaising with the firms of solicitors that acted for the company. Mr Leishman attested to Mr Peet's integrity and honesty in performing his duties. At the time of applying for the position Mr Peet made Mr Leishman aware of his conviction and incarceration. Mr Peet finished his employment with Home Corp Australia Pty.Ltd. on 19 February 1999, after suffering from a heart condition. 13 Maurice Neil Edwards is a partner of Baldock Stacy & Niven. He gave evidence that over the past 3 years he has had professional contact with Mr Peet almost daily. His firm acted regularly for clients referred to them by Home Corp Australia Pty.Ltd. He became aware of Mr Peet's convictions in about 1997, and has spoken with Mr Peet about this. He had read the Statutory Committees reasons prior to giving evidence but after swearing his affidavit in these proceedings. Knowledge of the precise amount misappropriated has not altered his views of Mr Peet. Mr Edwards has always found Mr Peet to be loyal, honest, diligent and competent. 14 Anthony George Jamieson, barrister, was called by the applicants to give character evidence. He had known Mr Peet professionally from when he practiced as a solicitor at Hurstville. He also knows him socially, as they both have grown up and lived in the same area. He gave evidence of his observations of Mr Peet both at work and socially over the years, and how his health had deteriorated. Mr Jamieson supports Mr Peet in this application, assessing him as a suitable person to be employed by a solicitor. 15 The final witness for the applicants was Mr Herat. Mr Herat stated as the outset of his evidence that "I very much value my practice as a lawyer and I do not in any way want to have Mr Peet act as a solicitor under the scheme in a capacity to act in transactions which would otherwise be conducted by a solicitor". He seeks to employ Mr Peet on a managerial basis, conducting business matters relating to the overview of workloads, quality control and stock. He would not be involved in relationships or in direct contact with clients. He will have no contact with funds or access to funds and would not meet clients. 16 Mr Herat has known Mr Peet in a professional capacity for four or five years. Mr Herat was an associate at a law firm, where Home Corp Australia Pty.Ltd. was one of the clients. In 1996 Mr Herat went into private practice. Whilst in private practice Mr Herat continued to work with clients associated with Home Corp Australia Pty.Ltd. and consequently continued to have professional dealings with Mr Peet. Mr Herat became aware of Mr Peet's offences and conviction, from his principal solicitor, sometime between 1993 and 1996. Prior to making this application Mr Herat read the Statutory Committees reasons for striking Mr Peet off the roll. 17 Mr Herat's reasons for wishing to employ Mr Peet include his experience at Home Corp Australia Pty.Ltd. which means he has significant background and knowledge about the way property development works. His experience in overseeing transactions means he could implement a work flow system in Mr Herat's business. 18 Mr Peet was not present at the hearing and did not give evidence before the Tribunal. REASONS OF THE TRIBUNAL 19 In the decision of Dezarnaulds Acting Justice Spender sets out the general considerations to be applied in considering applications under s48K, these are (at point 19): "(a) The discretion is entirely general. No attempt has been made to circumscribe it by reference to particular matters, or to impose a particular threshold test that must be satisfied. (b) There are no time limits. Theoretically, the practitioner who was struck off could apply the next day to become an associate of a legal firm. (c) Those guilty of indictable offences, or who have been guilty of the most extreme offences against proper conduct of their profession and have been disqualified for such reasons, are equally able to make an application to become an associate. (d) There are three levels of associateship. This is important as it is apparent that the Legislature had clearly in mind that a person who might be appropriate for one level of associateship, might not be appropriately permitted to occupy a another level of associateship. (e) There are obvious public interests, which are to be served, and must be taken account of. These include: (i) The protection of the public. (ii) The standing of the legal profession and the standards that are required of it. (iii) Affording those who are disqualified, or have been found guilty of indictable offences , the chance of rehabilitation and getting paid work in the profession. (f) While the standing of the profession in the public eye is of great importance, and the need to maintain the integrity of the profession is of equal importance, as has been emphasised time and time again by the courts (and recently be the Court of Appeal in the Law Society of New South Wales v Bannister (1993) 4 LPDR 24) and must be taken account of, it is necessary to bear in mind that an associate is not a legal practitioner, and depending on the particular level of associateship, may be in a position that is really no more than that of a clerk to or employee of a legal firm. One does not, as it were translate the requirements demanded of practicing members of the profession, or of those who are applying for admission to the profession, to those who are applying to become associates. This is of course perfectly plain as the statute is dealing with situations where, a person has been disqualified from legal practice, or may never have been qualified but would otherwise be debarred from acting as an associate because of conviction for an indictable offence." 20 The Tribunal takes into account the following matters: a) Mr Peet is now 63 years of age. He is at the end of his working career. He is seeking a less stressful part time position. b) It is clear from the evidence that since his conviction and incarceration he has impressed his employers and colleagues. He has been in stable employment. He has a wealth of experience that could only be an asset to Mr Herat and his legal practice. c) In the last ten years there has been no suggestion of any dishonesty in the course of his employment. d) The events giving rise to the offences occurred over 15 years ago. The offences were very serious. Mr Peet has shown contrition by pleading guilty. He has served the punishment imposed. The Tribunal is of the view that he should now be entitled to move on from these convictions. e) The nature of the employment proposed is the lowest level of associateship, "a person who is employed or paid in connection with the...solicitors practice" (s48K (7)(c)). Mr Herat has demonstrated to the Tribunal that the nature of the work undertaken will be managerial and administrative. Most importantly there will be no opportunity for Mr Peet to have access to clients funds. f) One of the Law Society's objections to this application is Mr Peet's failure to participate in the disciplinary proceedings in 1986. No reason is advanced as to why Mr Peet did not participate, one possible view is that he was not contrite. Other possible views are that he was embarrassed, he had other more pressing concerns or was physically, mentally and emotionally incapable of participating at that time. The fact of his pleas of guilty to the criminal proceedings is strong indication of his contrition in 1989. g) The Law Society also takes issue with Mr Peet's absence from this hearing, as a further indication of his failure to speak for himself and face his Professional body. Mr Peet however has been fortunate to have four men of high standing in the community, who have worked with him, speak for him. Further Mr Peet's application today is not to be readmitted to the profession, and accordingly those standards do not apply in this instance. Today's application is not about what Mr Peet did in the 1980's but about what he can do for the rest of his career. h) The Law Society further contends that the character witnesses were not fully informed of the facts in relation to the convictions. Each witness was cross examined on this point, and each have satisfied the Tribunal that they are sufficiently aware of the circumstances to be able to form an informed view on the matter. i) The Law Society finally submits that there is insufficient evidence before the Tribunal to grant the application. The Tribunal has heard evidence over a day and is completely satisfied by the evidence given that Mr Peet has demonstrated over the last 10 years, that he is a man held in esteem by his colleagues, and he has rehabilitated himself. Moreover the Tribunal is satisfied that Mr Herat will supervise him thoroughly. 21 In balancing the competing considerations as outlined in Dezarnaoulds, the Tribunal is of the view that Mr Peet should be given an opportunity to work as an associate, subject to the conditions set out in the orders. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.