CITATION: Law Society of New South Wales v West [2003] NSWADT 250 revised - 1/12/2003 DIVISION: Legal Services Division APPLICANT PARTIES: Council of the Law Society of New South Wales RESPONDENT Robert Douglas West FILE NUMBER: 032007 HEARING DATES: 03/09/03 SUBMISSIONS CLOSED: 09/03/2003 DATE OF DECISION: 11/24/2003 BEFORE: Vass CB -Judicial Member; Hale S - Judicial Member; Klika D - Member APPLICATION: Professional Misconduct - breach of s.61 of the Legal Professions Act MATTER FOR DECISION: Principal matter Administrative Decisions Tribunal Act 1997 LEGISLATION CITED : Legal Practitioners Act 1898 Legal Profession Act 1987 CASES CITED: Law Society of NSW v Foreman (1994) 34 NSWLR 408 in Re Hodgekiss (1962) 72 WN (NSW) 163 APPLICANT REPRESENTATION: P Boyd, solicitor RESPONDENT G Walsh, solicitor ORDERS: 1 The legal practitioner be publicly reprimanded; 2 The Practitioner pay the costs of the Law Society agreed in the sum of $2,000.00 1 The Council of the Law Society of New South Wales (" the Law Society ") on the 6th of June 2003 laid an Information before the Tribunal pursuant to the provisions of the Legal Profession Act 1987 (" LPA Act ") alleging the Respondent, Robert Douglas West, a legal practitioner who practises as a solicitor (" the Practitioner ") is guilty of professional misconduct on the ground that the Practitioner wilfully breached section 61 of the LPA Act. The Law Society sought orders under section 171C of the LPA Act that the Practitioner be publicly reprimanded, that he pay the Law Society's costs of the proceedings and such other orders as the Tribunal considers appropriate. 2 The conduct in question involves one transaction. The following facts are not disputed. a) In 1999 the Practitioner was practising as a solicitor and he operated a trust account. b) On or about the 23rd of August 1999 he received instructions from clients to sue the vendors of a property purchased by those clients at Chester Hill. c) The Practitioner wrote to the clients on the 9th of September 1999, separate letters sending to the clients a costs agreement for their information and seeking to have paid on account of costs the sum of $1,000.00. d) On the 15th of October 1999 a sum of $1,000.00 in cash was paid on behalf of the clients to the Practitioner's secretary who provided a hand written receipt signed by her stating "$1,000.00 cash received by RD West & ASS 15/10/99". e) The Practitioner took the $1,000.00 received from the clients to his home for his wife, who was his book keeper, to formally receipt the money for banking. f) The Practitioner did not pay the sum of $1,000.00 into his trust account but noted a credit for that amount on the client's file. The Practitioner says that the $1,000.00 was stolen from his home. g) The Practitioner did not render an account to his clients in respect of the said sum of $1,000.00. h) By letter dated the 29th of August 2001 the Practitioner refunded the sum of $1,000.00 directly to his clients. 3 Section 127 of the LPA Act provides as follows: "(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 role of legal practitioners, or (c) conduct that is declared to be professional misconduct by any provision of this Act." 4 The reference to " statutory misconduct " is primarily relevant in these proceedings for consideration of the practitioner's conduct pursuant to section 61 of the LPA Act 1987. 5 Section 61(1) provides: "A solicitor who, in the course of practicing as a solicitor in this State, receives money on behalf of another person: (a) must pay the money, within the time prescribed by the regulations, into a general trust account in New South Wales at an approved financial institution and must hold the money in accordance with the regulations relating to trust money or; (b) if the person on whose behalf the money is received directs that it be paid or delivered to a third party free of the solicitor's control, must ensure that the money is paid or delivered: (i) before the end of the next working day or, if that is not practicable, as soon as practicable after the next working day or; (ii) no later than the day allowed by the solicitor's authority or instructions (if that day is later than the day allowed under sub-paragraph (i), or; (c) if the person on whose behalf the money is received directs that it be paid otherwise than into a personal trust account or to a third party, must pay the money as directed and (if the money is to be held under the direct or indirect control of the solicitor) must hold the money in accordance with the regulations relating to controlled money." 6 Section 61(2) provides: "In any of those three cases, the solicitor must hold the money exclusively for, and must disburse the money in accordance with the directions of, the person on whose behalf it is held." 7 Section 61(8) of the LPA Act 1987 provides: "It is professional misconduct for a solicitor to wilfully contravene subsections (1) or (2)." The Disciplinary Jurisdiction of the Tribunal 8 The applicable principles relating to the disciplinary jurisdiction of the Tribunal are well settled and may be conveniently found in Law Society of New South Wales v Foreman (1994) 34 NSWLR 408. Of particular assistance in this case is the passage per Mahony JA: "The disciplinary jurisdiction remains one concerned with whether the solicitor is a fit and proper person to be held out by the Court as such ... in deciding whether a person is a fit and proper person for this purpose, the Court may, in accordance with the circumstances, take into account matters going beyond the mere protection of the public against similar misconduct. The Court may consider the character of the practitioner, or those aspects of it relevant to the office of a solicitor. It is also, I think, relevant for the Court to take into account the effect which its order will have upon the understanding, in the profession and amongst the public, of the standard of behaviour required of solicitors. The Court will no doubt, where appropriate articulate the standards required and that they are high. However, the Court must, I think, also take into account the effect upon which, it has said of, for example, a decision to allow a solicitor guilty of a serious infringement of those standards, to continue to practice, the Court may also have regard to whether, in the light of the offence in question, the solicitor can establish and maintain the kind of relationship which must exist between solicitors." 9 Also per Giles AJA: "But the object of protection of the public also includes deterring the legal practitioner in question from repeating the misconduct, and deterring others who might be tempted to fall short of the high standards required of them. And the public and professional colleagues who practice in the public interest, must be able to repose confidence in legal practitioners, so an element of deterrence is an assurance to the public that serious lapses in the conduct of legal practitioners will not be passed over or lightly put aside, but will be appropriately dealt with." Section 61/"Wilful Contravention" 10 In Re Hodgekiss (1962) 79 WN (NSW) 163 at 172 per Hardy J the Court said: "In the instant case the duty of the solicitor to his client is based upon a contractual and fiduciary relationship. Upon that relationship and duty the legislature has superimposed express statutory duties. Breaches of those duties are not made an offence punishable summarily, as are breaches of other sections of the Act. The sanction or penalty provided by the Act is the exposure of the solicitor concerned to the disciplinary and punitive powers of the Court and of the statutory committee in the event of the provisions being breached and such breach or breaches being wilful and to the exercise by the Institute of its power to cancel or to refuse to renew the solicitor's practising certificate whether it would seem/the breaches be wilful or not. The fact that the duties which form the subject matter of section 43 are statutory does not render inappropriate or inapplicable the principles laid down in the cases already cited for the determination of the question as to whether there has been 'wilful failure' on the part of the solicitor to comply with section 41 or section 42. Applying those principles, I am of the opinion that the Section deals with personal breaches of the statutory provisions in question on occasions when the solicitor knew or believed that he was committing such breaches or was recklessly careless in that regard. It is thus essential in an inquiry as to whether or not there has been wilful breaches by a solicitor of the provisions of section 41 to examine the facts and circumstances relevant to his state of mind, knowledge and intention at the material dates." 11 The decision in Re Hodgekiss dealt with provisions of section 41 and section 42 of the Legal Practitioners Act 1898. However, the guidance provided by His Honour is appropriate and relevant to be undertaken in this case and it is with regard to the above principles that the Tribunal has considered the evidence before it in relation to the conduct of the solicitor. 12 In his Reply the solicitor admits that he wilfully breached section 61 of the LPA Act and the particulars set out in the Schedule to the Information. 13 The Law Society relied on the evidence contained in the affidavit of Raymond John Collins, the manager of the Professional Standards Department of the Law Society and sworn on the 4th of June 2003. Mr Collins was not called for cross-examination. 14 The Practitioner relied on the evidence contained in his affidavit and affidavits comprising testimonials from his wife, Michael Parasyn, a solicitor, John Donnellan, a solicitor, Linden Evans, a solicitor, Michael Yee, a solicitor and Thomas Murphy, a solicitor. The Practitioner also relied upon a medical reports of Dr Tim Armytage, Dr Natalie Hitchens, several reports from Ray Scan Imaging and a report by Dr David Freiberg. None of the deponents or authors of the report were called for cross-examination. 15 The Practitioner's case is that after the receipt was issued by his daughter he took the monies home to be formally receipted by his wife who worked for him as a book keeper. The Practitioner had experienced from approximately June 1998 a number of security problems in relation to his home at Chester Hill. The home had been broken into on a number of occasions and reports had been made to the police. The Practitioner's wife was working at the residence for security reasons. On the weekend the monies had been taken to the home, they were stolen and the Practitioner did not report that particular theft to the police. 16 The Tribunal accepts that at that time the practitioner was suffering from a number of significant stressors and simply did not apply his mind to the necessity to comply with section 61 of the LPA Act. The particular stressors were: (a) His young daughter contracted breast cancer and underwent major surgery and a lengthy period of radiation treatment; (b) The Practitioner experienced health problems including falling from a horse and being injured and being diagnosed with sleep apnoea. The Tribunal is satisfied that the solicitor was not offering the particulars of the stressors as an excuse for failing to comply with section 61 of the LPA Act but it was submitted and the Tribunal accepted the submission that those stressors did impact upon his capacity to apply his mind to receipting the subject monies which were stolen. 17 The Practitioner by way of his responses to the Law Society and in particular correspondence to the clients acknowledged his wrongdoing and he refunded the sum of $1,000.00 to his clients. The Tribunal is satisfied that the Practitioner by his actions has demonstrated genuine contrition and his evidence clearly indicates that he has acknowledged his failure to comply with the obligations that he had to his clients. 18 Within the character affidavits there are a number of experienced members of the legal profession who have deposed to their dealings with the Practitioner and their positive support that notwithstanding his admitted breach of section 61 of the LPA Act he is a person of good fame and character. In addition the Practitioner has been assessed by medical professionals and has addressed a number of his personal health issues. 19 The Practitioner is continuing to work as a sole practitioner at Chester Hill and has basically abandoned his home at Virgil Avenue due to the difficulties associated with the break-ins. He now resides at Padstow and has taken steps to deal with the sleep Apnoea. The Tribunal is satisfied from the demeanour that he displayed when cross-examined that he is in a better frame of mind in respect of his work as a legal practitioner. 20 The Tribunal finds that the Practitioner is guilty of professional misconduct due to his wilful breach of section 61 of the LPA Act. 21 The Tribunal after considering all the facts and circumstances is satisfied that while any breach of section 61 is serious, in the case of this Practitioner the degree of seriousness is at the bottom end of the scale such that orders preventing him from practising or having his name removed from the role are not warranted. Orders 22 The Tribunal orders: 1 That the Practitioner be publicly reprimanded; 2 That the Practitioner pay the costs of the Law Society assessed and agreed at the sum of $2,000.00 Decision Revised 1 December 2003 - representation of Respondent corrected on cover page. 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