CITATION: Law Society of New South Wales -v- Martin [2002] NSWADT 27 revised - 01/05/2002 DIVISION: Legal Services Division APPLICANT PARTIES: Council of the Law Society of New South Wales RESPONDENT Cameron David Charles Martin FILE NUMBER: 012026 HEARING DATES: 07/02/2002 SUBMISSIONS CLOSED: 02/07/2002 DATE OF DECISION: 02/27/2002 BEFORE: Mattila J - Judicial Member; Greenwood J - Judicial Member; Bennett C - Member APPLICATION: Professional Misconduct - fail to comply with undertaking to Practitioner MATTER FOR DECISION: Principal matter LEGISLATION CITED : Legal Profession Act 1987 In the matter of Stanley Gerald Keefe [1996] 1 LPDR 31 In the matter of Shaun Michael Titmarsh [1999] 1 LPDR 18 CASES CITED: In the matter of Vincent Cofini [1994] NSWLST 25 In the matter of Donald William Wakeling [1998] NSWLST 5 In the matter of Yael Jiminez [1992] NSWLST 9 APPLICANT REPRESENTATION: P Boyd, solicitor RESPONDENT J Needham, barrister ORDERS: 1. The Tribunal finds that the solicitor has breached Practice Rule 26 and that the solicitor's failure to honour his undertaking is professional misconduct; 2. The solicitor is reprimanded ; 3. The solicitor is to pay the costs of the Law Society of New South Wales in the agreed amount of $1,000 and is given 3 months to pay. 1 The Respondent Solicitor Cameron David Charles Martin was admitted to practice on 1 December 1995. Mr Martin is an employed solicitor with Henshaws Solicitors at Liverpool and was an employed solicitor with the firm at the time of the occurrence giving rise to the complaint. Mr Martin is married with four children. 2 Mr Martin was acting for Mr Nathan Scott Bryant in a matter under the De Facto Relationships Act. Consent Orders were entered on 10 November 2000 requiring Mr Bryant to pay a number of outstanding bills and to pay his former de facto Ms Kerrie-Anne Lawson $55,000 within 14 days. Ms Lawson was required to transfer her title in their jointly owned property to Mr Bryant. 3 When Mr Bryant failed to pay the outstanding bills within 14 days, the solicitors for Ms Lawson Messrs Smith Monti and Costa contacted Mr Martin on 28 November, 2000 and requested that he provide an undertaking that the outstanding bills would be paid within 7 days. Mr Martin refused to provide the undertaking and contacted his client Mr Bryant and Mr Bryant's mother who assured him that arrangements were being put in place to pay the outstanding bills within 7 days. 4 On 30 November 2000 Mr Martin wrote to Messrs Smith Monti and Costa, Solicitors, stating in part: "We refer to the above matter and the Consent Orders approved by the Court on 10 November 2000. In consideration of your client settling this matter today, we hereby undertake to provide evidence of payment of the accounts listed in Order 2 thereof within seven (7) days, in the form of payment receipts." 5 Mr Martin failed to comply with his undertaking. 6 On 22 February 2001 Messrs Clive Speakman Solicitors, Brisbane Queensland acting on behalf of Ms Lawson wrote to Mr Martin, at Henshaws Solicitors informing him that Ms Lawson had been served with Notices before Summons for non-payment of the outstanding bills. Messrs Clive Speakman requested Mr Martin comply with his undertaking to provide the relevant receipts. 7 Mr Martin replied on 23 February, 2001 informing Ms Lawson's solicitors that Henshaws no longer acted for Mr Bryant. 8 On 19 March, 2001 Messrs Clive Speakman again wrote to Mr Martin at Henshaws Solicitors giving him until 21 March, 2001 to comply with his undertaking. 9 Mr Martin did not respond to Messrs Clive Speakman's letter and the matter was referred to the Law Society of New South Wales on 18 April, 2001. 10 On 27 September, 2001 the Professional Conduct Committee of the Law Society of New South Wales found Mr Martin guilty of unsatisfactory professional conduct for breach of Practice Rule 27, administered a reprimand and ordered him to pay Ms Lawson compensation of $3,248.34. The Tribunal notes that this is the same amount as the total of the outstanding bills. 11 Mr Martin failed to pay Ms Lawson within the timeframe set by the Law Society of New South Wales. Mr. Martin did not forward compensation to Messrs Clive Speakman until 13 December, 2001. 12 The action in this matter was brought on the complaint of Messrs Clive Speakman by the Law Society of New South Wales acting as the Informant. Breach of Undertaking 13 The allegations as to conduct before this Tribunal are not challenged, in relation to the grounds of the complaint Mr Martin has expressed contrition and has now compensated Ms Lawson. Mr Martin does not concede that his conduct constituted professional misconduct but submits that the highest characterisation of the conduct is that it amounted to unsatisfactory professional conduct. 14 The Informant Law Society has not indicated whether the breach of undertaking was a breach of Practice Rule 26 or Practice Rule 27. 15 Practice Rule 26 provides: 26 - Undertakings A practitioner who, in the course of the practitioner's practice, communicates with another practitioner orally, or in writing, in terms which expressly, or by necessary implication, constitute an undertaking on the part of the practitioner, to ensure the performance of some action or obligation, in circumstances where it might reasonably be expected that the other practitioner will rely on it, must honour the undertaking so given strictly in accordance with its terms, and within the time promised, or, if no precise time limit is specified, within a reasonable time. 16 Practice Rule 27 provides: 27 - Undertakings A practitioner must not give to another practitioner an undertaking compliance with which requires the co-operation of a third party, who is not a party to the undertaking, and whose co-operation cannot be guaranteed by the practitioner. 17 We find Mr Martin's conduct to be a breach of Practice Rule 26. The solicitor could have complied with his undertaking by personally paying the accounts that were the subject of the Order and thus providing the receipts in question. 18 In our view compliance with the undertaking did not necessarily require the "co-operation of a third party" and as a result the solicitor's conduct constituted a wilful breach of Practice Rule 26. 19 It is open to the Tribunal to make a finding of either professional misconduct or unsatisfactory professional conduct. A breach of an undertaking is not a matter where the Legal Profession Act 1987 declares that the Tribunal must make a finding of professional misconduct. 20 Professional misconduct and unsatisfactory professional conduct are defined under section 127 of the Legal Profession Act 1987: SECTION 127 127 Professional misconduct and unsatisfactory professional conduct (1) For the purposes of this Part, professional misconduct includes: (a) unsatisfactory professional conduct, where the conduct is such that it involves a substantial or consistent failure to reach reasonable standards of competence and diligence, or (b) conduct (whether consisting of an act or omission) occurring otherwise than in connection with the practice of law which, if established, would justify a finding that a legal practitioner is not of good fame and character or is not a fit and proper person to remain on the roll of legal practitioners, or (c) conduct that is declared to be professional misconduct by any provision of this Act, or (d) a contravention of a provision of this Act or the regulations, being a contravention that is declared by the regulations to be professional misconduct. (2) For the purposes of this Part: unsatisfactory professional conduct includes conduct (whether consisting of an act or omission occurring in connection with the practice of law that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent legal practitioner. 21 The Tribunal and its predecessor the Legal Services Tribunal has previously considered the serious nature of a breach of undertaking in a number of cases in the past. 22 In the matter of Stanley Gerald Keefe[1996]1LPDR31 involved two breaches of undertakings and various other complaints involving misconduct. The practitioner's client had transferred the file from another solicitor and indicated that he (the client) would pay the costs. The practitioner as part of the transfer of the file had undertaken to pay the costs of the other solicitor. The client subsequently objected to the costs and instructed the practitioner not to pay the full amount. The Legal Services Tribunal found the practitioner's conduct unsatisfactory professional conduct. In the same matter the Tribunal found the practitioner guilty of professional misconduct for breach of undertaking to the Court. 23 In the matter of Shaun Michael Titmarsh [1999] 1LPDR18 the solicitor was found guilty of professional misconduct for failing to comply with an undertaking to the Legal Services Commissioner to provide a response in relation to the request for information. 24 In the matter of Yael Jimenez [1992] NSWLST 9 at page 3 the Legal Services Tribunal found: "The undertaking was unconditional and was not dependent upon her being provided with funds from the client to cover the payment". 25 The Legal Services Tribunal held that the breach of the undertaking in Jimenez constituted professional misconduct. 26 Mr Martin has argued that the undertaking was conditional upon his client paying the outstanding bills. The undertaking did not specify how the bills were to be paid and it was at all times possible for Mr Martin to pay the outstanding bills and comply with the undertaking he had given to Messrs Smith Monti and Costa. Even when Mr Martin was required by the Law Society's to pay Ms. Lawson compensation for the breach of undertaking he was tardy in doing so. 27 In the Matter of Donald William Wakeling and the Legal Profession Act 1987 Legal Services Tribunal No.5 of 1998 involved an undertaking by the solicitor to provide certain requisitions in relation to a grant of probate. The requisition had in fact been attended to by the executors. The executors had remedied the situation and probate was granted but the solicitor had not complied with the specific terms of his undertaking as events had overtaken it. The Legal Services Tribunal found that the solicitor's conduct was professional misconduct as: "The solicitor gave an undertaking. He did not honour it. It was given in the course of his legal practice. The breach by him amounts to professional misconduct." 28 In Vincent Cofini [1994] NSWLST 25 at page 6 the Legal Services Tribunal gave a succinct explanation of the importance of the significance of solicitor's undertakings. "There are limited circumstance in which an undertaking should not be honoured…. Undertakings are given by legal practitioners for the specific purpose of enabling legal activities to be carried out. Other persons rely on those undertakings. The undertakings are personal to the legal practitioner and bind that practitioner, not as a matter of contract but as a matter of professional conduct and comity, and will be enforced by the Courts because legal practitioners are officers of the Court and because without enforcement undertakings would be worthless, persons and Courts would be unable to rely on the word of the legal practitioner and this aspect of legal practice, that demands compliance for legal efficiency, would collapse." 29 Mr Martin could have remedied his breach of undertaking at any time by paying the outstanding bills and providing the necessary receipts. He chose not to do so. 30 A breach of an undertaking in these circumstances is professional misconduct and we find accordingly. Decision revised 01/05/2002: Paragraph 10, after the word conduct and before the word administered, the words 'for breach of Practice Rule 27' was inserted. 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