The Legal Services Tribunal of New South Wales CITATION : John Hayter [1996] NSWLST 15 PARTIES : John Hayter FILE NUMBER(S) : of 1995 CORAM: Mr F Riley (President) - Mr W. Macquarie - Ms E. Dutton CATCHWORDS: Unsatisfactory Professional Conduct - delay :- section 127(1)(a) Legal Profession Act 1987 LEGISLATION CITED: Legal Profession Act 1987 section 127(1)(a). CASES CITED: DATES OF HEARING: 13 November 1996 DATE OF JUDGMENT: 11/29/1996 LEGAL REPRESENTATIVES: Ms J Deamer of counsel instructed by Mr Gary James Still for the Council of the Law Society of New South Wales. Mr I Wales of counsel instructed by Mr Francis Dominic Lloyd, solicitor, of Messrs Lloyd & Lloyd. JUDGMENT: The Solicitor received instructions late in 1981 to act for a man and his wife in respect of personal injuries claims arising from a motor vehicle accident. Both clients gave further instructions to the solicitor to act for them on personal injuries claims in relation to another accident in which they were involved late in 1983. They also consulted the solicitor about work place accidents. When the solicitor's instructions were terminated about the end of 1992 neither of the actions which the solicitor commenced for the clients arising from the 1981 accident had been concluded. A statement of claim issued on behalf of the male client in 1987 had not been served. Although liability was admitted by the defendant on the female client's action in 1983 it had not been set down for trial. No proceedings had been commenced in respect of the 1983 accident and both client's actions were statute barred. The solicitor conceded his delay and also the client's allegations that he had misled them by assurances that the matters were receiving attention and would soon be settled. The Tribunal determined that by reason of his gross neglect of his client's interests and his misleading of them he was guilty of professional misconduct. Having regard to the evidence of the solicitor's otherwise good professional record; his good standing in the profession and his local community, and his obvious deep remorse in respect of his conduct, the Tribunal administered a reprimand and ordered that the solicitor pay the costs of the Law Society. The information The Council of the Law Society of New South Wales, in an information filed in the Tribunal on 27 May 1996, made a complaint of professional misconduct against Mr John Hayter, a solicitor practising at Orange, on grounds which involved a substantial delay and neglect in the conduct of personal injury claims on behalf of his clients, Roger Lauchlan Ferris and Marlene Ann Ferris, and on the ground that he had misled those clients as to his conduct of their matters. Reply – admission of facts The solicitor, in his reply to the Law Society's information, admitted the allegations and the particulars therein contained. He also filed a statutory declaration dated 25 July 1996 which was tendered on behalf of the solicitor and identified as Exhibit 1. In his declaration the solicitor affirmed the facts stated on his behalf in a letter comprising 77 pages dated 28 April 1994 and sent by his solicitors, Lloyd & Lloyd, to the Law Society's Professional Standards Department. That letter and the solicitor's declaration provided detailed information and explanation in respect of his dealings with the Ferris matters. The solicitor's counsel confirmed that the solicitor admitted the allegations of fact made against him, but he did not concede that those facts, having regard to all of the circumstances, would justify a finding that the solicitor had been guilty of professional misconduct. Principal facts in summary The facts relevant to the complaint are, in brief summary, as follows. On 17 August 1981 Roger Ferris (then a sergeant of police stationed at Kempsey) was driving his car at Port Macquarie, New South Wales, in company with his wife, Marlene, and daughter, Debra, when it was struck in the rear by another motor vehicle while it was stationary at roadworks. Late in August 1981 Sergeant Ferris (who had known Mr Hayter during earlier police service at Orange) telephoned the solicitor from Kempsey, advised him of the motor accident and informed him that he wanted the solicitor to act for Sergeant Ferris himself, his wife and daughter in respect of claims for damages in respect of the personal injuries which they had allegedly suffered in the accident on 17 August (paragraph 14 of the solicitor's statutory declaration of 25 July 1996). On 2 September 1981 the solicitor conferred with Debra, the Ferris' daughter, and received instructions from her to recover damages. Although the solicitor thereafter had the conduct of Debra's action for damages, the Law Society's complaint contains no allegations in respect of the solicitor's conduct of her matter. On 16 September 1981 the solicitor received instructions from Marlene Ferris in conference and on 2 February 1982 (paragraph 23 of the solicitor's declaration) the solicitor conferred with Sergeant Ferris in respect of his claim for damages. On 25 March 1982 the solicitor drafted statements of claim for Roger Ferris and Marlene Ferris and, on the instructions he received from Roger Ferris, the solicitor sent to Mr Serisier, barrister, a brief to settle the draft statements of claim and to advise on the actions, particularly in relation to a possible claim by Roger Ferris for loss of consortium. Mr Serisier advised the solicitor to obtain further particulars in respect of the claim for loss of consortium before commencing proceedings on behalf of Roger Ferris. On 7 April 1982 the solicitor caused the issue of a statement of claim on behalf of Marlene Ferris in the Supreme Court and that was served on the defendant on 20 April 1982. No additional advice was forthcoming from Mr Serisier, despite requests from the solicitor from time to time, and the brief was returned at the solicitor's request in June 1983. The solicitor thereafter instructed new counsel who gave contrary advice in regard to the loss of consortium claim and subsequent events, including a second motor vehicle accident and a later workplace accident affecting Roger Ferris, caused his claim for damages to become more complex. The solicitor issued a statement of claim out of the Supreme Court on behalf of Roger Ferris on 14 August 1987 claiming damages for personal injuries arising from the accident of 17 August 1981, but took no action to have the statement of claim served on the defendant (paragraph 69 of the solicitor's declaration). The proceedings instituted by the solicitor on behalf of Marlene Ferris in respect of the accident of 17 August 1981 were never set down for hearing. Several requests from the defendant for further particulars of the claim were not answered. The defendant admitted liability in July 1983 and the defendant made an offer of settlement of the claim on 13 June 1984, but the solicitor, at paragraph 58 of his declaration, admits that he did not communicate that offer to his client. Marlene Ferris also consulted the solicitor in respect of a workplace accident in which she had suffered injury on 7 April 1981. Although an offer to redeem her claim was made by the respondent insurer on 10 April 1984, the solicitor concedes that he did not convey that offer to Mrs Ferris (paragraph 58 of the solicitor's declaration). On 28 November 1983 Roger Ferris was driving his car in which his wife, Marlene, was a passenger on the Oxley Highway, west of Wauchope, when it collided with another motor vehicle travelling in the opposite direction. The solicitor received instructions from Roger Ferris and Marlene Ferris on 14 December 1983 to act for each of them in respect of claims for damages for personal injuries which they claimed to have received in the accident of 28 November 1983 (paragraphs 51 and 52 of the solicitor's declaration). Roger Ferris and the driver of the other vehicle involved in that accident gave conflicting accounts as to the point of impact. Each driver alleged that the other driver was on the incorrect side of the road and the police took no action against either driver. The solicitor, in his evidence given orally to the Tribunal (page 13 of transcript), said that he could not recall discussing with his clients whether Mrs Ferris should have taken some independent advice about the possibility of taking action against her husband and the other driver in relation to the accident of 28 November 1983. The solicitor conceded, at paragraph 70 of his declaration, that no proceedings were commenced on behalf of either Marlene Ferris or Roger Ferris in respect of the accident of 28 November 1983 and the actions of both clients became statute barred. The accounts provided in Lloyd & Lloyd's letter of 28 April 1994 to the Law Society and in the solicitor's declaration of 25 July 1996 in relation to his handling of the "Ferris matters" show that the solicitor appeared to act with reasonable diligence in the conduct of his clients' claims until 1984, but thereafter he failed to give the matters the attention they required. It was put persuasively by Mr Wales on behalf of the solicitor that, although the instructions which the solicitor had received from the members of the Ferris family involved separate actions and proceedings, the solicitor regarded them collectively as one problem matter and developed a "mental block" which precluded him from taking rational and decisive action in respect of them. The solicitor's inaction and his "mental block" caused him to mislead his clients as to the attention he was giving to the matters and their progress. Marlene Ferris, in her affidavit annexed to her statutory declaration of 11 December 1995 (at page 128 of the papers attached to the Law Society's Information) stated: " ... I have sought on many occasions to ascertain from Mr Hayter the position regarding each of my claims. When I spoke to Mr Hayter about my claims he said to me words to the effect of 'We're going to settle them all together'. On many occasions Mr Hayter said to me words to the effect of 'They'll all be settled soon'". Roger Ferris, in the affidavit annexed to his statutory declaration of 11 December 1995 (at page 152 of the papers attached to the Law Society's Information) made the following statement: "In about December 1984 I telephoned Mr Hayter to ascertain the then current position of our claims and had a conversation with him to the following effect: I said: 'John, at the moment we're paying off a house and paying rent. We have to buy another car. Can you give me an idea when our third party matters might be settled.' He said: 'They will be settled soon'. I said: 'Do you think we should go ahead and buy the car.' He said: 'Yes go ahead. They will be settled soon.'" The solicitor, at paragraph 71 of his declaration of 25 July 1996, said: "I admit that from 1984 on numerous occasions I misled my clients as to the progress of their claims as alleged in the Information and the Particulars thereof." At paragraphs 81 to 86 of his declaration the solicitor described the "quandary" in which he found himself in dealing with, in particular, the claim by Roger Ferris, as the solicitor stated he had concern as to the "bona fides of the instructions which I was receiving from my clients". At paragraph 84 of his declaration the solicitor frankly stated: "I should have had the moral courage to advise the members of the family as to my suspicions and advise them to instruct other Solicitors. The failure to take such a step led to my delaying work in respect of the various matters which in turn led to me misleading my clients in 1984." Counsel for the solicitor argued that the solicitor had not invented elaborate excuses to mislead his clients and that when he told them that the matters were proceeding he did not intend to do nothing more. The solicitor states that his instructions were withdrawn by Roger Ferris and Marlene Ferris on 24 December 1992. Roger Ferris (at page 153 of the papers attached to the Law Society's Information) states that in about February 1993 he instructed other solicitors to take over the carriage of the claims for himself and his wife. Findings The Tribunal makes the following findings: 1. The solicitor's neglect of the interests of his clients, Roger Ferris and Marlene Ferris, resulting from his delay and other omissions in the implementation of their instructions arising from the motor vehicle accidents in which they were involved on 17 August 1981 and 28 November 1983, was of a gross degree. The solicitor's failure to act as his clients' instructions and the circumstances required caused two potential actions to be statute barred. An action commenced on behalf of Marlene Ferris in April 1982, in which liability was admitted by the defendant in July 1983, had not been set down for trial when the solicitor's instructions were terminated in late 1992 or early 1993. 2. The solicitor's gross neglect of the interests of his clients, Roger Ferris and Marlene Ferris, and his gross delay in dealing with their affairs were, in the opinion of the Tribunal, of a kind that would reasonably be regarded by solicitors of good repute and competency as disgraceful and dishonourable. The Tribunal has formed that opinion from a consideration of the whole course of the solicitor's conduct from his original receipt of instructions in August 1981 to their termination at the end of 1992 or early 1993. While the Information filed by the Law Society invoked the application of section 127(1)(a) of the Legal Profession Act to the allegations of delay and neglect and referred to them as unsatisfactory professional conduct, the Tribunal believes that it must look at the solicitor's conduct as a whole throughout the relevant period. The submission made orally by the Law Society's counsel was that the solicitor's gross delay overall amounted to professional misconduct. Mr Wales, on behalf of the solicitor, argued that at no time did the solicitor's conduct "cross the line from unsatisfactory professional conduct to professional misconduct". He conceded however that, although unsatisfactory professional conduct did not have statutory definition or existence as sanctionable conduct prior to 1 January 1988, the Tribunal was nevertheless entitled to have regard to the effect on a solicitor's file of pre-1988 conduct in determining the action which a solicitor should have taken in respect of the file after 1988. The Tribunal's finding does not rely on characterising conduct of the solicitor as unsatisfactory professional conduct and then assessing it by reference to the definition of professional misconduct in section 127(1)(a). The Tribunal has determined that the solicitor's gross delay and neglect over a period extending from, on his own admission, at least 1985 to 1992 must properly be regarded as professional misconduct. 3. The solicitor's concealment from his clients, Roger Ferris and Marlene Ferris, of the true position in relation to his handling of their matters and his repeated statements to them to the effect that the matters were receiving attention and would soon be completed were calculated to, and did, mislead the solicitor's clients to their substantial detriment. The solicitor conceded (as noted above) " ... that from 1984 on numerous occasions I misled my clients as to the progress of their claims ... ". The solicitor's misleading of his clients over such a lengthy period during which their rights were so prejudicially affected by the solicitor's inaction was conduct which, in the Tribunal's opinion, should reasonably be regarded as disgraceful and dishonourable by solicitors of good repute and competency and therefore constituted professional misconduct. The consequences of the findings for the solicitor The Tribunal has reached its findings with regret as the evidence indicates that the solicitor, since his admission to practice as a solicitor in March 1963, has, with the exception of the "Ferris matters", practised in a competent and diligent manner and has been a well-respected member of the legal community and the general community in Orange where he has practised throughout his career. He has made a very frank and complete disclosure to the Law Society and to this Tribunal of his conduct of the matters involving Roger and Marlene Ferris and the Tribunal is in no doubt that Mr Hayter is deeply contrite and has been shamed and distressed by his experience with the Ferris matters. The Tribunal has noted the eleven statutory declarations provided by professional colleagues of Mr Hayter which attest to their high opinion of his professional competence and integrity. Regrettably, while the evidence before the Tribunal enables it to be satisfied of Mr Hayter's fitness to continue in practice as a solicitor, it does not diminish the seriousness of the defaults on his part in relation to Roger and Marlene Ferris, which were a substantial departure from the standards which a solicitor of his standing and experience would wish to, and should, profess and they were tainted by an inability to "own up" to the omissions which had seriously prejudiced his clients' interests. The consequence of that inability was deception through concealment of the true position and misleading statements to the clients which, although not elaborate in their structure or design, were deliberately at odds with the truth. Both counsel made submissions in respect of a list of authorities submitted by the Law Society. Although in some of the cases listed this Tribunal, or one of its predecessors, had considered the border line between professional misconduct and unsatisfactory professional conduct and some determinations placed conduct involving neglect and delay, according to the particular circumstances, below the threshhold of professional misconduct, the Tribunal has not found any conflicting issue of principle which would persuade it to determine its findings differently from those above stated. The Law Society Informant has submitted that the Tribunal should, in its orders, do no more than order payment of the Society's costs by the solicitor and administer to him a reprimand. In all the circumstances of this case, the Tribunal believes that they are the appropriate orders and that no useful purpose would be served by the imposition of any additional monetary penalty. Determination The Tribunal therefore determines that, by reason of its findings above stated, the solicitor is guilty of professional misconduct. Orders The Tribunal orders that: 1. The solicitor is reprimanded. 2. The solicitor must pay the costs of the Law Society which the parties have agree are assessed at $8,561. Of that amount $4,561 must be paid within 6 months of this date and the balance of $4,000 must be paid within 9 months of this date. 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.