Legal Services Commissioner -v- Knudsen [2000] NSWADT 62

CITATION: Legal Services Commissioner -v- Knudsen [2000] NSWADT 62 DIVISION: Legal Services Division APPLICANT Legal Services Commissioner PARTIES: RESPONDENT Peter Stanley Knudsen FILE NUMBER: 992029 HEARING DATES: 13/03/2000 SUBMISSIONS CLOSED: 03/13/2000 DATE OF DECISION: 05/18/2000

BEFORE: Fox R - Judicial Member; Gailey C - Judicial Member; Andrews M - Member APPLICATION: Professional Misconduct - fail to comply with s. 152 Notice MATTER FOR DECISION: Principal matter LEGISLATION CITED : Legal Profession Act 1987 CASES CITED: APPLICANT REPRESENTATION: T Lynch, barrister RESPONDENT D Raphael, barrister ORDERS: 1. That the respondent be publicly reprimanded.; 2. That the respondent is fined the sum of $1,000.00 which is to be paid within 3 calendar months from 13 March 2000, and if not so paid, the respondent's practicing certificate is cancelled until such time as the payment is actually made.; 3. That the respondent is ordered to pay the costs of the applicant assessed at $3,500.00 within 6 calendar months from 13 March 2000.

REASONS FOR DECISION 1 The matter which requires determination by the Tribunal on complaint made by the Legal Services Commissioner, is whether the respondent, whilst practising as a solicitor, was guilty of professional misconduct on the ground that he failed, without reasonable excuse, to comply with a notice in writing under Section 152 (1) of the Legal Profession Act 1987. 2 Letters sent by the Office of the Legal Services Commissioner, which are annexures to the tendered affidavit of Steven Anthony Mark, sworn 16 September 1999, establish that the respondent was first notified by the Commissioner that a complaint had been received from Gordon Land by letter dated 5 February 1999. A copy of the complaint (the "Land Complaint") was enclosed with the letter. 3 The Land Complaint related to the fees to be paid to a forensic accountant for a report which was relevant to litigation which, during part of its course, had been conducted for Gordon Land by the respondent. An amount of $1,000.00 was at issue, and it should be noted that the hearing before the Tribunal was conducted on the basis that the Legal Services Commissioner took no further action against the respondent in respect of the Land Complaint, and that it was either without foundation, or should have been brought against another practitioner. 4 The respondent was asked for a written response to the Land Complaint within 21 days. The respondent made no response and a further letter was forwarded to him by the Commissioner on 9 March 1999, requesting a response within 14 days and drawing the respondents' attention to the ramifications of Section 152 (1) of the Legal Profession Act 1987, if the respondent failed to respond to this second letter. 5 When no written response was received to the second letter, the Legal Services Commissioner issued a notice under Section 152 (1) of the Act on 28 April 1999, requiring that a written response to the Land Complaint be received by 21 May 1999. The notice also advised that "failure to comply with this notice by the specified date without reasonable excuse may result in the institution of proceedings….. by way of information in the Legal Services Division of the Administrative Decisions Tribunal". 6 When the respondent failed to provide a written response to the Notice in time, the Legal Services Commissioner forwarded the letter of 1 June 1999, advising that the Commissioner had decided to initiate a new complaint against the respondent under Section 136 of the Legal Profession Act. A copy of the new complaint (the "Commissioner's Complaint") was enclosed with that 1 June letter and the respondent was asked for "any comments you may wish to make in relation to the complaint", to be made by 11 June 1999. 7 On 10 June 1999, the respondent forwarded a letter to the Legal Services Commissioner responding to the Land Complaint, and apparently fully addressing it. The Commissioner responded to this letter by letter dated 16 June 1999, advising that the respondent's letter responded to the Land Complaint but not to his failure to comply with the Section 152 notice. The respondent was asked to respond to the Commissioner's complaint by 25 June 1999. 8 Receiving no further response, the Commissioner determined on 6 August 1999, under Section 155 of the Act that he was satisfied that there was a reasonable likelihood the respondent would be found guilty by the Legal Services Division of the Administrative Decisions Tribunal of professional misconduct in relation to the complaint "that the practitioner, without reasonable excuse, did fail to comply with a notice in writing under Section 152 (1) of the Legal Profession Act 1987 in respect of a complaint by Gordon Land". The evidence upon which the Commissioner relied was set out in the Commissioner's affidavit earlier cited and is as above summarised. 9 At the Monday 13 March hearing of this matter the Tribunal was advised that the respondent had filed a Reply on the previous Friday. The document was not actually raised before the Tribunal, although Mr Raphael, on behalf of the respondent, conceded that its attempt to provide some explanation for the delay had no proper legal base. Instead, Mr Raphael sought to rely on the respondent's evidence given orally before the Tribunal. 10 It was freely conceded that the respondent had failed to respond to the Commissioner's correspondence until 10 June 1999. However, the respondent gave evidence of a conversation with a Mr Milne at the Commissioner's office in which he provided an oral resume of the facts which were the background the Land Complaint and an explanation why it lacked any basis. The respondent conceded that it was Mr Milne who had contacted the respondent, however, the respondent was unable to provide any further evidence, such as file note, of this conversation and was unable to provide a date when it had taken place although his initial recollection was that it was "several months before" the issue of the Commissioner's complaint (31 May 1999). Under cross-examination it was conceded that such conversation may well have been later than earlier claimed, but the respondent was adamant that it had taken place prior to the Commissioner's letter of 1 June 1999. 11 The Tribunal accepts that the respondent did have a detailed conversation with Mr Milne, some time shortly before 10 June but has insufficient evidence to establish whether it was given before or after 21 May 1999. 12 The position then was that, having been initially notified of a complaint on 5 February 1999, the respondent, after receipt of several letters, and after receipt of a notice under Section 152 (1) of the Act requiring compliance by 21 March, at some time either just before or after 21 May responded orally, but only responded in writing on 10 June. By that time the Commissioner had instituted the complaint (failure to comply with the Section 152 notice) which brought the respondent before this Tribunal, and it was conceded that the respondent never did in writing or at all respond to that complaint. 13 Counsel for the respondent argued that the 23 day time period provided for the respondent to respond to the Commissioner's notice dated 28 April 1999 had been unreasonably short and that the Commissioner's office had been "overzealous" in resolving to issue the (Commissioner's) complaint on 31 May 1999. He argued that the respondent had responded to the Land Complaint within time, albeit verbally, by his conversation with Mr Milne and that the respondent had justifiably overlooked the request contained in the Commissioner's letters that a written response be provided in relation to the Commissioner's Complaint (as distinct from the Land Complaint). 14 The Tribunal is firmly of the view that the time given to the respondent to respond to the Land Complaint was entirely proper and that the Commissioner had given the respondent more than adequate notice and opportunity, and the Tribunal is just as firmly of the view that admittedly shorter times given by the Commissioner for the practitioner to answer the Commissioner's Complaint were also, in view of all the circumstances, appropriate and proper. 15 The blunt fact of the matter is that the respondent was first notified by letter of 1 June 1999 of the Commissioner's decision to issue the Commissioner's Complaint, offering a relatively short period (perhaps 6 or 7 working days) to allow comment to be made, when the Commissioner received a non-responsive reply, a further period, of perhaps a further 6 or 7 working days, was given, and thereafter, no response having been received, after the passage of a period of more than a month, the Commissioner made his decision. 16 In defence of his failure to respond, the respondent stated that he believed his letter of 10 June 1999 had dealt with the "Complaint". He said that he had not interpreted this letter as referring to the Commissioner's Complaint of his failure to reply to the earlier correspondence, but rather the initial complaint of Land. Counsel for the respondent argued that the respondent was justified in not responding to the letter of 1 June, 1999 because the letter was ambiguous and that the respondent was entitled to interpret the letter as he had done. 17 The Tribunal also rejects this suggestion. Alternative wording, which might have been somewhat clearer, was proposed and the Tribunal notes that the Commissioner's letter was, on an initial scanning, perhaps open to the ambiguity Mr Raphael proposed. However, there was attached to that letter a copy of the complaint, and that certainly removed any possible doubt. 18 Explanations of his failure to respond included the break-up of the respondent's partnership, a heavy work-load as a sole practitioner, absence on holiday and subsequent serious ill health upon return to work. 19 Whilst the Tribunal accepts the respondent's evidence of his personal and professional problems, the ultimate response furnished to the Land Complaint was short, simple and disposed of the matter. Had such a response been made earlier this whole situation would not have arisen. 20 Had the practitioner not previously come under Notice, he might well have been able to call his long record of practice in aid, and indeed, that long, almost clear, record was not far from the Tribunal's mind. However, the failure of the practitioner to deal promptly with correspondence received from the Commissioner is extremely foolish, and the failure to respond to the formal Notice is, in effect, self-punishing. 21 The terms of Section 152 (1) are clear. They require a response to the Commissioner's notice. The absence of a response without acceptable excuse can only lead to a finding of professional misconduct. 22 The indication from the legislature to the profession is, in Section 152 of the Legal Profession Act, quite clear; it states that failure to respond (without reasonable excuse) to the formal written demand by the Legal Services Commissioner for information, is a culpable professional failing. Especially in view of the fact that the Land Complaint could be quite simply resolved it is sad indeed that this matter comes before the Tribunal on the much more serious (although, paradoxically) subsidiary issue. 23 Sadder still was the concession made in the witness box by the respondent to the effect that he took the view that, once the Commissioner had made his decision and issued the Commissioner's Complaint, the course was set, and there was nothing more the practitioner could do. Now, as a matter of strict law, that may well be correct, because Section 136 (2) of the Act indicates that, having decided that there is a reasonable prospect of a finding by the Tribunal of professional misconduct, the Commissioner must issue an information, but the Tribunal does not understand the law to be that, after issuing such an information, upon there being filed, in response, evidence which establishes a defence (for instance by way of reasonable excuse) the Commissioner is not entitled to simply (no doubt on terms as to costs) withdraw his information. It should also be pointed out that these comments are not intended to indicate that that would have been a proper course for the Commissioner in these circumstances. 24 The respondent is a man of long professional experience. The evidence of the respondent's personal and professional problems goes some way towards explaining the respondent's failure to respond, but it does not satisfy us as being so overwhelming to the respondent that it was a reasonable excuse for the failure. 25 At our invitation Mr Lynch drew our attention to the full range of penalties previously imposed by this Tribunal for failures to comply with such notices. There have been 7 to date, ranging from a public reprimand with costs, a public reprimand with fines of $2,000.00 and $3,000.00 and costs, a public reprimand with 12 months supervision and costs, a public reprimand with a fine of $1,000.00 and 2 years supervision, a public reprimand and a fine of $8,000.00 and 12 months supervision and costs and, in our most extreme case, cancellation of a Practicing Certificate for a period of more than a year. 26 The present circumstances certainly do not warrant more than orders for reprimand, costs and a fine and the Tribunal notes the propriety of Mr Lynch's suggestions on behalf of the Commissioner that the matters of Titmarsh (29 October 1998) and Roberts (15 December 1998) set what might be described as "the range" for this matter. We have earlier in these reasons referred to the fact that the respondent has an almost unblemished record, and, in view of that, there must be some leniency and so the Tribunal therefore makes the following orders: 1. That the respondent be publicly reprimanded. 2. That the respondent is fined the sum of $1,000.00 which is to be paid within 3 calendar months from 13 March 2000, and if not so paid, the respondent's practicing certificate is cancelled until such time as the payment is actually made. 3. That the respondent is ordered to pay the costs of the applicant assessed at $3,500.00 within 6 calendar months from 13 March 2000.