Council of the Law Society of New South Wales v Hancock [2009] NSWADT 201

CITATION: Council of the Law Society of New South Wales v Hancock [2009] NSWADT 201

DIVISION: Legal Services Division

APPLICANT Council of the Law Society of New South Wales PARTIES: RESPONDENT John Leslie Hancock

FILE NUMBER: 092002

HEARING DATES: 25 June 2009

SUBMISSIONS CLOSED: 25 June 2009

DATE OF DECISION: 30 July 2009

BEFORE: Chesterman M - Deputy President; Barnes M - Judicial Member; Tingle J - Non-Judicial Member

CATCHWORDS: Disciplinary application – solicitor – delay in paying stamp duty – breach of section 257, Legal Profession Act 2004 – failure to comply with notice under section 660, Legal Profession Act 2004

LEGISLATION CITED : Administrative Decisions Tribunal Act 1997 Legal Profession Act 2004

CASES CITED: Nikolaidis v Legal Services Commissioner [2007] NSWCA 130 Prothonotary of the Supreme Court of New South Wales v McCaffery [2004] NSWCA 470

APPLICANT C Webster, barrister REPRESENTATION: RESPONDENT D Allen, barrister

1. We find that the Respondent committed professional misconduct as alleged in Grounds 3, 5 and 6 of the Application ORDERS: 2. We dismiss Ground 4 of the Application 3. We make no order with respect to Grounds 1 and 2 of the Application 4. The proceedings are set down for further directions at 9.30 a.m. on 4 August 2009.

REASONS FOR DECISION Introduction 1 In this Disciplinary Application filed in the Tribunal on 29 January 2009, the Council of the Law Society of New South Wales ('the Law Society') claims that the Respondent, John Leslie Hancock ('the Solicitor'), was guilty of professional misconduct. The Application sets out six Grounds with accompanying Particulars. 2 All of the matters alleged against the Solicitor stem from his handling of instructions received from Mr David Edwards and Mrs Anne Edwards to act for them in the purchase of a property early in 1998. His conduct prompted complaints made by Mr and Mrs Edwards to the Office of the Legal Services Commissioner on 30 May 2007 and by the Law Society on 20 September 2007 and 17 April 2008. 3 Following investigation of these complaints by the Law Society, its Professional Conduct Committee, acting under delegation from its Council, resolved on 27 November that these proceedings should be instituted in the Tribunal. 4 The six Grounds set out in the Application are as follows:- Complaints by Mr & Mrs Edwards 1. The Solicitor failed to pay stamp duty. 2. The Solicitor failed to register title. 3. The Solicitor failed to communicate. Complaints by the Law Society 4. The Solicitor wilfully breached Section 257 of the Legal Profession Act, 2004 5. The Solicitor delayed in ensuring the payment of stamp duty on the purchase by David Oliver Edwards and Anne Whittaker Edwards of a property at Chatswood thereby causing delay in the registration of the transfer of the property into the name of the purchasers. 6. The Solicitor without reasonable excuse failed to comply with a requirement under Section 660 of the Legal Profession Act, 2004. 5 Section 257 of the Legal Profession Act 2004 ('the LP Act') imposes obligations on a law practice when it receives 'transit money'. Section 660 states that a lawyer must comply with a notice served on him at the instance of an 'investigator' requiring information to be provided in writing on or before a specified date and/or one or more documents to be produced at a specified time and place. The details of these two provisions are explained below. 6 The Disciplinary Application seeks the following orders:- 1. That the Solicitor be publicly reprimanded. 2. That the Solicitor pay a substantial fine. 3. That the Solicitor pay the costs of the Law Society. 4. Such further or other order as the Tribunal deems appropriate. 7 In a Reply filed in the Tribunal on 18 March 2009, the Solicitor replied to each of the six Grounds as follows:- Ground 1: He admitted vicarious liability for the failure to pay stamp duty, but sought mitigation because there was an explanation for the failure and the failure was subsequently rectified at his own cost. Ground 2: He admitted vicarious liability for the failure to register title, but sought mitigation because there was an explanation for the failure and the failure was subsequently rectified at his own cost. Ground 3: He denied failure to communicate except for a specified period (between 23 June 2006 and 23 February 2007) and claimed that he had a reasonable excuse for any failure to communicate (if such failure occurred) during this period. Ground 4: He admitted that he breached section 257 of the LP Act, but denied the allegation that the breach was wilful. Ground 5: He admitted causing delay but sought mitigation because there was an explanation. Ground 6: He claimed that if he failed in any respect to comply with a requirement imposed under section 660 of the LP Act, there was a reasonable excuse. 8 At the hearing of the Disciplinary Application before us on 25 June 2009, Ms Webster, counsel for the Law Society, tendered affidavits sworn by Mr Raymond Collins (the Society's solicitor), Mrs Edwards and Mr Christopher Trieu (a former employee of the Solicitor). She also tendered an affidavit by Mr Kenneth Ramshaw, testifying to having served on the Solicitor the notice under section 660 of the LP Act to which Ground 6 of the Application relates. With the consent of the Solicitor, conveyed through his counsel, a further affidavit sworn on 30 June 2009 by Ms Elizabeth Barnes, a solicitor employed by the Law Society, was filed after the hearing. 9 Mr Allen, who appeared for the Solicitor, sought leave to withdraw the admissions made by the Solicitor in his Reply with regard to Grounds 1 and 2. The reasons why he did so are outlined below. Mr Allen did not require any of the Law Society's witnesses for cross-examination and he did not adduce any evidence on the Solicitor's behalf. 10 The present decision deals with two questions: (a) whether, and if so with respect to which of the six Grounds of the Disciplinary Application, the Law Society's allegation of professional misconduct against the Solicitor is established and (b) whether in the alternative any finding of unsatisfactory professional conduct should be made. Outline of facts 11 The ensuing outline is based on the Particulars set out in the Disciplinary Application, supplemented by the uncontested affidavit evidence tendered by the Law Society. 12 The Solicitor was admitted on 29 June 1990. He held a practising certificate from that date until 30 June 2002, and has held a practising certificate since 30 July 2002. 13 In early 1998 the Solicitor received instructions to act on behalf of Anne Whittaker Edwards and David Oliver Edwards ('the purchasers') with respect to their purchase from Marnwest Pty Ptd ('Marnwest') of Apartment 903, Tower A, The Regency, 18-26 Anderson Street, Chatswood being Lot 123 in an unregistered plan ('the property'). The property formed part of a development being effected by Australand Holdings Pty Ltd ('Australand'). 14 The contract for sale was dated 24 March 1998. Stamp duty on it was payable by 24 May 1998. 15 At about the same time, the purchasers also instructed the Solicitor to act on their behalf in purchasing two more investment properties. One of these was a home unit within a development being carried out by Australand called 'Balmain Shores'. 16 In a letter dated 13 April 1998, the Solicitor advised the purchasers that contracts for their purchase of the property had been exchanged on 24 March 1998 and requested a cheque made payable to the Office of State Revenue ('OSR') in the sum of $5,140.00. 17 This letter enclosed an 'interim memorandum of costs and disbursements', dated 13 April 1998 and signed by the Solicitor. It sought payment of $275.00, comprising professional fees of $250.00 for 'acting on your behalf in your purchase up to and including the stamping of the contract' and disbursements of $25.00 described as 'Registration fees for Office of State Revenue'. 18 On 20 April 1998 Mr Edwards sent a letter to the Solicitor enclosing a cheque for the sum of $275.00 and a further cheque dated 1 May 1998 'for the sum of $5,140.00 to cover the cost of Stamp Duty payable in May'. 19 The Solicitor's file for this transaction was found to contain an unsworn statutory declaration dated 8 August 2001, in a form appropriate to be sworn by him. This declaration said in part:- 2. On or about 1st May 1998 I was given a cheque by my clients in order to attend to payment of the stamp duty ….. 3. I directed my secretary, at the time, to lodge this cheque for payment of stamp duty 4. This is an off-the-plan purchase and is due for settlement within a few months. 5. When I retrieved the relevant file from my archives to prepare for settlement I discovered the (sic) contrary to my instructions the cheque had not been lodged at OSR for payment of stamp duty. 6. My secretary has left my employment so I am unable to ascertain exactly what happened. 20 In a statutory declaration sworn by the Solicitor on 5 September 2007, in circumstances outlined below, he gave a similar account of these events in 1998. 21 In a letter dated 16 July 2001, the Legal Department of Australand advised the Solicitor that the Strata Plan for Tower A in The Regency, Chatswood, had been registered and that the certificate of title for the property would shortly be available for uplifting from the Land and Property Information Office. 22 On 30 July 2001 the purchasers forwarded a second cheque for $5,140 in favour of the OSR to the Solicitor. They sent it with a copy of Mr Edwards' letter of 20 April 1998 to the Solicitor, with the date altered. 23 On 1 August 2001 the Solicitor's office sent an email to Mr Edwards stating in part that 'we have not received your cheque in relation to the stamp duty as yet'. 24 On 3 August 2001 the purchasers forwarded a third cheque for $5,140 in favour of the OSR to the Solicitor. They again enclosed a copy of the Mr Edwards letter of 20 April 1998, with the date altered. 25 Subsequently the purchasers cancelled the cheques dated 30 July 2001 and 3 August 2001 drawn in favour of the OSR. 26 On 9 August 2001 the purchasers forwarded a fourth cheque for $5,140 in favour of the OSR to the Solicitor. 27 In his statutory declaration sworn on 5 September 2007, the Solicitor stated that Ms Mary Mason-Cox, the member of his staff who dealt with stamp duty aspects of this purchase during 2001, had been competent and diligent and had 'generally worked well' with other public servants because of her prior experience with the Land and Property Information Office. He stated also that he did not know why the stamp duty had not been paid and that he could not ascertain the reason because Ms Mason-Cox had died. 28 Completion of the purchase of the property took place on 9 August 2001 at the office of Mallesons Stephen Jaques ('Mallesons'). This firm acted for the Commonwealth Bank ('CBA'), whose mortgage over the property was discharged as part of the settlement. 29 On 10 August 2001 the Solicitor's office sent a letter to the purchasers advising that the matter had settled and enclosing a settlement statement and a tax invoice for acting in relation to the purchase of the property. The tax invoice included the following entry: 'Attendance at Office of State Revenue (payment of stamp duty) $22.00.' 30 In fact, as appears from the ensuing narrative, it was not until 2 March 2007 that the Solicitor remitted to the OSR the duty on the contract for sale and transfer. It was not until 10 August 2007 that he lodged the stamped transfer at the Land and Property Information Office, together with the discharge of mortgage and the certificate of title, in order to effect registration of the transfer of the property into the names of the purchasers. 31 On or about 5 February 2002 the purchasers received from the Solicitor's office a letter dated 27 December 2001 from Colin Biggers & Paisley, who had acted for Australand in selling the unit at Balmain Shores. The letter enclosed a rate notice from Leichhardt Municipal Council and asked the Solicitor to forward it to the purchasers, pointing out that payment of the rates was their responsibility. It also requested that the Solicitor ask the purchasers to notify the Council of the change of ownership. 32 On the day when this letter arrived, Mrs Edwards spoke twice with a person called Mary at the Solicitor's office. Mary (who would appear to have been Ms Mason-Cox) said that she would ask the Solicitor what was going on and would get the Solicitor to write to the Land Titles Office. Mrs Edwards also made inquiries at the Council and at the Land Titles Office. 33 On 25 February 2002, having heard nothing back from the Solicitor, Mrs Edwards advised a temporary staff member at his office that the Land Titles Office had received no notice of the transfer of the Balmain Shores unit and that the Council rates had not been paid since June 2001. 34 On 26 February 2002 Mr Edwards sent a letter, incorrectly dated 6 February 2002, to the Solicitor. It included the following passages:- Whilst it is appreciated that you are extremely busy I would like to inform you that I have been totally dissatisfied with the service I have been provided over recent months…. The property at Balmain Shores has still not (as at 1.30pm today 26 February 2002) been transferred into our name, it is still registered as belonging to Australand Holdings, this is despite our contacting your office on the 5th February and being assured that this matter would be taken care of. AS THIS SETTLEMENT WAS COMPLETED NEARLY 12 MONTHS AGO (12.3.2001) IT IS URGENT AND MUST BE TAKEN CARE OF IMMEDIATELY. I would appreciate you looking into these matters and bringing them to a satisfactory conclusion as soon as possible. 35 On 9 May 2002, having received no response from the Solicitor, Mr Edwards resent by fax to the Solicitor's office his letter of 6 February 2002. He added a short handwritten note including the words 'Note: No answers to date 3 months!!!' 36 On 25 February 2003 Mrs Edwards telephoned the Solicitor's office and spoke to a temporary staff member called Martha, since the Solicitor was not available. Mrs Edwards asked Martha to ascertain from the files for the purchases of the Balmain Shores unit and the property whether the relevant forms had been sent to the local Council and to the Land Titles Office in relation to the change of ownership. Martha said to Mrs Edwards that she would get back to her. 37 On 26 February 2003 Mrs Edwards telephoned the Solicitor's office. Martha told her that she had spoken about the matter to the Solicitor, but he had not given her any instructions. 38 On 27 February 2003 Mrs Edwards telephoned the Solicitor's office and again spoke to Martha, since the Solicitor was not available. Martha said that she had given Ms Edwards' message to the Solicitor, that the files were archived and that she would look into whether the files needed to be retrieved rather than just sending the appropriate forms to the councils. 39 On 10 March 2003 Mrs Edwards telephoned the Solicitor's office and spoke to the Solicitor. He said that he would look into the problem and asked her to ring him the following Friday. 40 On 21 March 2003 Mrs Edwards, having not heard back from the Solicitor, telephoned the Solicitor's office and spoke to Martha. She requested advice on the matters that she had raised with the Solicitor concerning the property and the Balmain Shores unit. Martha said that she would call her back. 41 On 24 March 2003 Mrs Edwards telephoned the Solicitor's office. Martha advised her that the problem with the Balmain Shores unit had been sorted out and that the Solicitor was now looking into the problem with the property at Chatswood. 42 On 27 June 2003 Australand sent a letter to the purchasers enclosing an account from Sydney Water for services provided to the property. 43 On 17 July 2003, after telephoning the Solicitor's office, Mrs Edwards faxed this letter to the Solicitor's office, having added the words 'John please can we resolve this problem'. 44 On 22 April 2004 Mrs Edwards telephoned the Solicitor's office. Martha said that she remembered the matter and that she would sit down with the Solicitor and go through the file. 45 On 24 May 2004 Mr Edwards faxed to the Solicitor a handwritten letter regarding the property, which said in part:- Attached are details of numerous requests for action to send Form 109 to Willoughby & Form 118 to Land Titles Office. It appears from our records that this has not been actioned. Please act immediately or I shall refer to the Law Society for unsatisfactory work. 46 On the same day, the Solicitor's wife, Ms Heather Hancock, rang Mr Edwards from the Solicitor's office. She asked him to send her a copy of the stub for the cheque that had been sent to pay the stamp duty, in order that the Solicitor could sign a statutory declaration identifying the conveyancer who had handled the file and stating that she had died. 47 On the same day, Mr Edwards faxed to Ms Hancock a copy of the stub for the cheque for $5,140.00 dated 9 August 2001, together with a copy of his letter of 30 July 2001 to the Solicitor. 48 On 27 May 2004 Ms Hancock sent the first of a series of handwritten faxes to Mr Edwards from the Solicitor's office. This fax said in part:- Apologies for the delay in sending this fax. John has spoken to the Office of State Revenue and they will require him to declare a Statutory Declaration with regards to the property transfer. He is aiming to finish that by Wednesday of next week and then we will know how next to proceed. Thank you for your patience and we will be in touch next week. 49 On 1 June 2004 Martha faxed to Australand's Legal Department a letter from the Solicitor's office, which said in part:- As discussed this matter was handled at our office by a person who has now passed away. We have searched the office and we are unable to locate any of the file or associated documents. To assist us in registering our clients' interest against the Title of the property, would you please forward to us a copy of the transfer. 50 On 3 June 2004 Ms Hancock sent a fax to Mr Edwards, which said in part:- David – Letters sent to Australand re (1 June 2004) copies of transfers and mortgage discharges. Once this paperwork is finished, the Land Titles (OSR) (sic) will advise next steps. Just an update to let you know we are pursuing this. 51 On 17 June 2004 Ms Hancock sent a fax to Mr Edwards, which said in part:- On 1.6.04 we faxed and sent letters to Australand in relation to your purchase. They advised us by phone that all their legal work is no longer handled in-house but has been transferred to Colin, Biggers and Paisley Solicitors. Martha has contacted a Mr Gavin Lawless there to further pursue this. She followed up with a phone call last week and we still have not heard back from them. 52 On 18 June 2004 Martha faxed to Australand's Legal Department a letter from the Solicitor's office, requesting a reply to her letter of 1 June 2004. 53 On 24 June 2004 the Solicitor obtained a title search of the property, which indicated that the purchasers were not the registered proprietors. 54 On 27 June 2004 Ms Hancock sent a fax to Mr Edwards, which said in part:- David – As we have still had no response from numerous phone calls and faxes to Colins/Biggers (Australand) we are pursuing alternative means of finishing the transfer. Martha conducted searches on the property and John will be pursuing the matter further this week with the LTO. 55 In a fax sent to Martha at the Solicitor's office on 13 July 2004, Australand transmitted copies of the front page of the contract for sale of the property (dated 24 March 1998), its letter to the Solicitor advising that the Strata Plan for Tower A, Regency, had been registered (dated 16 July 2001) and the settlement sheet for the sale of the property (dated 9 August 2001). 56 A file note dated 22 July 2004 on the Solicitor's file indicates a telephone conversation between himself and an employee of the OSR. The file note indicates that a covering letter was to be sent. 57 In a letter dated 22 July 2004 to Australand, replying to Australand's letter of 13 July, the Solicitor wrote:- As you are aware, the file in relation to our client's purchase cannot be located. We do not have copies of any original documents in this matter. The writer has had lengthy conversations with Office of State Revenue and the normal practice requires production of either the purchaser's copy of the contract or alternatively the vendor's copy of the contract. In order for the stamping of the contract and transfer to go ahead, and make our client's (sic) to be registered on the title we request that you make available the vendor's copy of the contract so that we may have the contract stamped with the Office of State Revenue, and upon stamping we will return contract to your office. Would you please also confirm that your office will arrange for the signing by Marnwest or its attorney a copy (sic) of the transfer of sale. We enclose draft transfer for your approval. 58 On 22 July 2004 Ms Hancock sent a fax to Mr Edwards, which said in part:- Australand has located your file and we have requested a vendor's copy of the contract. Once we have a copy of the signed vendor's contract we will present it to the OSR for stamping then transfer. 59 On 23 July 2004 a file note on the Solicitor's file records that he spoke on the telephone to a person called Kathy (Ms Kathy Glinsky) employed by Australand, regarding the discharge of the mortgage that the CBA had held over the property. 60 On 26 July 2004 Martha sent a letter from the Solicitor's office to Ms Glinsky at Australand with a heading relating to the purchase of the property by Mr and Mrs Edwards. Referring to a telephone conversation on that day, the letter enclosed 'original transfer as requested'. 61 On 23 August 2004 Martha sent a letter, similarly headed, from the Solicitor's office to Ms Glinsky. It said in part:- We refer to our telephone conversation of 23 August 2004 in relation to the discharge of mortgage for the above. We would appreciate it if you could contact the bank and ask if they can provide us with something in writing in relation to the discharge of mortgage. 62 On 26 August 2004 Ms Hancock sent a fax to Mr Edwards, which said in part:- Another update. Australand informed us on 23/8/08 that the bank is refusing to issue a copy of the discharge of mortgage. We have sent a request to the bank to provide us a letter to the effect that the mortgage has been discharged so we can attend the OSR. Will keep you informed on status as we go. 63 On 10 September and 15 September 2004 file notes on the Solicitor's file indicate telephone conversations between himself and Ms Glinsky regarding transfer and mortgage documents (in which the need for an original signed transfer was mentioned) and also regarding searches of their legal files for the original signed contract. 64 On 28 and 29 October 2004 file notes on the Solicitor's file indicate telephone conversations with Ms Glinsky, in the course of which she advised that Australand's file had been transferred to Mallesons and that the contact person there was Ms Dianne Owens. The former conversation was between the Solicitor himself and Ms Glinsky. 65 On 14 January 2005 Martha sent a letter from the Solicitor's office to Ms Owens at Mallesons. She referred to a telephone conversation regarding the discharge of the CBA's mortgage over the property and enclosed copies of (a) correspondence during the period from 1 June to 13 July 2004 between the Solicitor's office and Australand; (b) 'copy of transfer'; and (c) 'copy of title searches'. 66 On the Solicitor's file is an undated fax from Martha addressed to Ms Owens asking for 'an update on this matter' and enclosing a copy of the letter of 14 January 2005. 67 On 6 April 2005 Martha faxed a letter to Mallesons from the Solicitor's office. She claimed that she had left four unanswered messages on Ms Owens' voicemail during February and March 2005 and had sent an unanswered email on 24 March 2005. The letter enclosed copies of the documents sent on 14 January 2005 and asked for a response as soon as possible. 68 On 21 April 2005 the Solicitor sent a letter to Mallesons in similar terms. He referred to the letter of 6 April and to the unanswered phone calls and email to Ms Owens that were described in that letter. He claimed also that 'other various messages' had been left for Ms Owens and her secretary 'on a regular basis up to 21 April 2005'. The letter alleged that no response had been received and requested Mallesons to give their attention to this matter 'so that the outstanding issues can be finally resolved'. 69 On 9 May 2005 Mr Richard Gray from Mallesons sent a letter to the Solicitor, which said in part:- Your letter dated 21 April 2005 …. has been referred to me, in my capacity as supervising partner of Dianne Owens. I have discussed the matter with Dianne Owens and note she has separately written to you following the contact with the Commonwealth Bank…. When your initial request was received, Diane Owens contacted Australand. She left numerous phone messages for you last year and received no response from you to any of these phone messages. Subsequently this year you left several voice messages for Diane Owens. On receipt of those messages she again contacted Australand and was awaiting a response from Australand before responding to you. She also contacted Commonwealth Bank and again faced delay because of change of personnel within the bank. She has finally been able to obtain a sensible response from the bank and this is contained in her letter to you. Whilst I can understand your frustration in matter (sic) dragging on for so long, I trust you can understand we did not act for Australand ……Your failure to respond to numerous phone messages last year did not suggest there was any great urgency in finalising the matter. 70 The Solicitor's file does not disclose any phone messages to his office from Ms Owens during 2004. 71 On 10 May 2005 Ms Owens sent a letter to the Solicitor advising that Mallesons was awaiting receipt of the original contract of sale and a duplicate executed transfer from Australand, and of a response from the CBA regarding the replacement discharge of the mortgage. 72 On 2 August 2005 Ms Owens sent a letter to the Solicitor, which indicated that 'our client', after quite extensive searching, had not been able to locate the original contract for sale and was arranging for a replacement transfer to be prepared and signed. It further stated that, 'as previously advised', CBA Corporate Services (NSW) Pty Limited would prepare and sign a replacement discharge of mortgage. She asked the Solicitor to telephone her 'to discuss the missing contracts for sale and the likely further requirements of the Office of State Revenue'. 73 On 10 August 2005 Ms Owens sent a letter to the Solicitor enclosing copies of a signed replacement transfer, a signed replacement discharge of mortgage and a tax invoice received from the CBA. She stated that on receipt of a cheque in payment of fees payable to the CBA, Mallesons would forward to him the original signed replacement transfer and discharge of mortgage. She did not indicate the amount of the fees. 74 On 13 September 2005 Ms Owens sent a letter to the Solicitor, which said in part:- We refer to our letter dated 10 August 2005, to which we have received no reply. Could you please forward cheque in payment of CBA Corporate Services for $220.00 so that the replacement discharge of mortgage can be released to us and replacement transfer and discharge of mortgage then forwarded to you to finalise this matter. 75 As will appear below, the Solicitor did not send the requested cheque for $220.00 to Mallesons until 23 May 2006. 76 During September 2005, Mr and Mrs Edwards decided to sell the property. They engaged a local conveyancing company, One Stop Conveyancing Shop, to assist them in the sale. 77 On 20 September 2005, One Stop Conveyancing Shop faxed a letter dated 19 September 2005 to the Solicitor, which said in part:- We …..act for Anne & David Edwards in the Sale of the above property. Our office has obtained a Title Search for the above property and note the name of 'Marnwest Pty Limited' is still on title in which (sic) should have been registered when Anne & David bought the property roughly 5 years ago. We understand our Clients have been chasing you in relation to this and will hold you fully responsible for any legal ramifications that may occur. Please have the documents registered as a matter of urgency as they are now selling the above property and cannot due so until this has been done. We await your urgent written response in relation to the above. 78 The Solicitor's file contains a further copy of this fax sent on 29 September 2005, attaching a title search of the property. 79 On 22 November 2005, Ms Owens sent a letter to the Solicitor noting that he had not replied to her letters of 10 August and 12 September 2005 and reminding him that they were holding a signed replacement transfer and could provide a replacement discharge of mortgage upon payment of CBA Corporate Services' costs of $220.00. She asked for advice as a matter of urgency as to when he anticipated making payment 'so that this long standing matter can be finalised'. 80 On 28 November 2005 Mr Edwards sent to the Solicitor a letter which said in part:- We have attempted to contact you at least 20 times and left numerous messages regarding the property in the Regency in Chatswood. It is still registered as belonging to Australand Holdings. We would point out that this matter was brought to your attention in 2002 and again during 2004. We understood following various correspondence with your office that the matter was in hand and would be resolved shortly. When we tried to put the property on the market we found that the problem had not been solved. In November 2004 I had a severe stroke and mostly confined to a wheelchair. I had to retire early and we now urgently need to sell this property… To assist in the sale of the property we selected a local successful Conveyancing company…. This company also has faxed you and telephoned you unsuccessfully. Your urgent attention is now required to resolve this situation. What action do you recommend? My wife is available at any convenient time to visit your office to discuss this matter. Your reply by return by telephone, email or mail would be appreciated. 81 On 6 December and 13 December 2005, file notes on the Solicitor's file indicate that he had a telephone conversation with Mrs Edwards on each of those days. 82 On 3 January 2006 the Solicitor sent a letter to Mr & Mrs Edwards which said in part:- We refer to our recent telephone conversation with Mrs Edwards…. The legal department for Australand was in essence disbanded. The Solicitor Jan Hyde, was the main contact person in our dealings, she has left Australand, and currently works for Solicitors in Chatswood. We are attempting to liaise with her… In mid January 2006, we will contact you in relation to the outstanding certificate of title, and confirm our progress with the Office of State Revenue and Land & Property Information Office. 83 On 6 March 2006, Mr Christopher Trieu, a solicitor, commenced employment with the Solicitor. 84 On 4, 5 and 6 April 2006, Mrs Edwards rang the Solicitor's office and asked to speak to the Solicitor. She was told that he was not available. When she spoke briefly to him on 19 April 2006, he said that he would fix the problem. When she spoke briefly to him on 2 May 2006, he said that he would ring her back the next day, but did not do so. When she tried to ring him at his office on 8, 9 and 10 May 2006, her calls were not answered. 85 She also spoke to Mr Trieu on 6 and 27 April 2006. In one of these conversations, she said that she was upset that the Solicitor would not take her calls and that he seemed to be avoiding her. Mr Trieu said that he would raise the matter with the Solicitor. 86 Subsequently, the Solicitor instructed Mr Trieu to tell the purchasers that if they provided a cheque for the stamp duty the stamping would be attended to. Mr Trieu passed on this advice to Mrs Edwards. 87 On 15 May 2006 the purchasers sent to Mr Trieu a letter which said in part:- Further to our numerous telephone conversations with other members of your office staff, yourself and John Hancock regarding the above apartment and the omission by your company to pay the Stamp Duty. As mentioned we have sent no less than three cheques for the amount of $5,140.00 to cover the Stamp Duty (none of which were ever presented – even though the last cheque was hand delivered to your office). We now enclose cheque … made out to the Office of State Revenue for the sum of $5,140.00 to cover this outstanding amount. We trust that the above information and cheque will enable your office to complete this outstanding business and ensure that the above property in now in our name to enable us to put the property on the market. 88 A file note made by Mr Trieu records that on 19 May 2006 an employee of the OSR advised him that in order to have the transfer stamped 'a contract and/or transfer' would be needed, that if the transfer was backdated interest would be payable and that if the transfer was 'dated now' the property would have to be valued and duty paid by reference to the current value. 89 After this conversation, Mr Trieu said to the Solicitor that in his opinion it would be unfair to require the purchasers to pay the full stamp duty plus any penalty that might be imposed. The Solicitor then instructed him to prepare a letter to the OSR explaining why the stamp duty had not been paid within the prescribed time and seeking leniency. Mr Trieu claimed in his affidavit that he carried out this instruction, but that he did not know whether the letter and declaration were ever sent to the OSR. 90 In his statutory declaration sworn on 5 September 2007, the Solicitor stated, however, that Mr Trieu never completed this task. 91 On 20 May 2006 a file note on the Solicitor's file indicates that he reviewed the file. 92 On 24 May 2006 Ms Joanna Baqleh, a temporary employee of the Solicitor, sent to Mallesons a cheque drawn in favour of CBA Corporate Services in the sum of $220.00. In a covering letter, Ms Baqleh referred to Mallesons' letter of 10 August 2005 and asked for the signed replacement transfer and discharge of mortgage to be sent to the Solicitor's office as soon as possible. She also stated: 'We note your advice that you have not been able to obtain the vendor's copy of the contract.' 93 On 5 June 2006, Ms Baqleh was told by Ms Natalie Phrupp, an employee of Mallesons, that the CBA had misplaced the file relating to the discharge of the mortgage. 94 On 13 June 2006, Ms Baqleh sent a letter to Ms Phrupp repeating her request for replacement documents. 95 On 15 June 2006, Ms Baqleh advised Mrs Edwards by telephone that the CBA had lost the file, that it was 'preparing a new settlement sheet', that the Solicitor had sent a cheque 'to cover this' and that as soon as new documents were received they would be submitted to the OSR. 96 On 20 June 2006 Mallesons forwarded to the Solicitor, inter alia, a signed transfer of the property and a signed discharge of the mortgage. 97 On 22 June 2006, Ms Baqleh advised Mrs Edwards by telephone that all the documents had been received and that a letter regarding late payment of the stamp duty was being prepared. 98 On 11 August 2006, Ms Edwards rang the Solicitor's office and asked to speak to Ms Baqleh. After being told that Ms Baqleh had left the office, Ms Edwards was put through to Mr Trieu. He said that he would ask the Solicitor to ring her back. 99 On 14, 15, 16, 21 and 22 August 2006, Mrs Edwards left messages requesting the Solicitor to ring her back, but he did not do so. 100 On 8 September 2006 Mr Trieu left the Solicitor's employ. 101 During February 2007, Mr and Mrs Edwards arranged to meet the Solicitor to discuss the situation regarding transfer of the property to them. He cancelled the meeting, however, assuring them that since he had heard from the OSR the matter would be resolved within a week. 102 On 23 February 2007 Australand sent a fax to the Solicitor confirming that 'as discussed today', the original contract for sale to the purchasers from Marnwest Pty Ltd dated 24 March 1998 could not be located. 103 File notes on the Solicitor's file indicate that he had a telephone conversation with Mr Edwards on 23 February 2007 and with Mrs Edwards on 2 March 2007. 104 On 2 March 2007, the Solicitor lodged or caused to be lodged at the OSR the following documents: (a) a copy of the first page of the contract of sale of the property; (b) a form of transfer of the property; (c) a letter to the OSR dated 2 March 2007; (d) documentation supporting this letter; and (e) the purchasers' cheque (sent to him on 15 May 2006) in the amount of $5,140.00 for stamp duty. The evidence on this matter, which includes a letter dated 18 October 2007 from the OSR to the Law Society, does not refer to any lodgement of a discharge of the CBA's mortgage. 105 The Solicitor's letter to the OSR dated 2 March 2007 included the following passages:- There is unfortunately a very long history in this matter. The net effect is that Stamp Duty has not been paid, as well the contract for both the vendor and the purchaser have been lost independently, along with the discharge of mortgage, Certificate of Title and Transfer. The relevant information to our client's application is as follows: 1. Our client entered into a contract for the purchase of the Unit on 24 March 1998 for $190,000. 2. At the time a cheque for stamp duty was provided to this office for the payment of stamp duty. My then secretary was requested to attend to stamping of the transfer, this did not occur (I refer to draft statutory declaration that was prepared in this matter)…. 8. The writer in July 2004 attended the Office of State Revenue in Sydney and explained the problems regarding the matter and received advice to obtain copy of the vendor's contract together with cheque butts for previous payment of stamp duty in this matter…. 12. Our client David Oliver Edwards in late 2004 suffered a stroke and is incapacitated, and is no longer able to work. Due to this situation he is now required to sell the above mentioned unit. In addition, David Oliver Edwards and his wife Anne Whittaker Edwards, have been required to sell their family home… and move into an apartment in order to meet their living expenses and medical expenses. We note that the situation is very protracted and we request the leniency of the Office of State Revenue in its assessment of the above matter. 106 This letter included also an outline of the correspondence between the Solicitor's office, Australand and Mallesons. The supporting documentation included the following: (a) copies of some of this correspondence; (b) a copy of Mr Edwards' letter of 20 April 1998 to the Solicitor (as amended and resent during 2001) enclosing a cheque for stamp duty; and (c) an unsigned statutory declaration, in a form appropriate to be sworn by the Solicitor. 107 On 6 March 2007 the OSR issued a receipt for the payment of duty of $5,140.00. 108 On 8 March 2007 a file note on the Solicitor's file indicates that he had a telephone conversation with an officer from the OSR. The note states in part: - Submit further letter - client have to pay interest Burden Retired…. 109 On 23 March 2007 the OSR faxed to the Solicitor a Duties Notice of Assessment (bearing issue date 26 March 2007) indicating that the interest payable, being initially shown as $6,186.44, had been reduced to $2,617.00. The due date for payment was stated to be 16 April 2007. 110 On 13 April 2007 the Solicitor sent a letter to the OSR in which he first referred to telephone conversations with Mr Colin Thew, an employee of the OSR, and apologised for his delay in attending to this matter. He stated that the delay was caused by his personal involvement in a long-running and uncompleted Supreme Court case. He then repeated his request for leniency on the part of the OSR with regard to the imposition of penalties. He stated that Mr Edwards was incapacitated on account of a stroke and that Mrs Edwards was therefore compelled to devote a great deal of her time to caring for him, with the consequence that they had had to sell their family home and were also forced to sell the property which was the subject of this application to the OSR. He referred also to the fact that the 'current situation' had been 'greatly protracted due to a combination of factors' to which Mr and Mrs Edwards were 'not the contributing party'. 111 On 4 May 2007 the OSR forwarded a letter to the Solicitor stating that the premium rate of interest on the overdue stamp duty was remitted, but that payment of $2618.19 interest at market rates was required within 14 days to finalise the matter. 112 On 30 May 2007, Mr and Mrs Edwards lodged a complaint against the Solicitor with the Office of the Legal Services Commissioner. It set out three grounds in the same terms as the first three Grounds of the Disciplinary Application (see [4] above). On the following day, the Commissioner forwarded the complaint to the Law Society for investigation by its Professional Standards Department. 113 On 10 July 2007 a Notice dated 28 June 2007 under section 660 of the LP Act ('the section 660 Notice') and a covering letter from the Law Society bearing the same date were served on the Solicitor. Enclosed with the letter was a copy of the complaint that Mr and Mrs Edwards ('the complainants') had lodged with the Office of the Legal Services Commissioner. 114 The section 660 Notice was signed by Mr Knox Sinclair, who is a solicitor employed by the Law Society, in the capacity of Investigator. It referred to the complaint that the complainants had lodged. It then required the Solicitor to provide within 21 days of service his verified answers to a number of questions relating to (a) the receipt by his law practice from the complainants of four cheques for $5,140 drawn in favour of the OSR on 30 July 2001, 3 August 2001, 9 August 2001 and 15 May 2006 respectively; (b) the actions taken by him and/or persons under his direction in relation to these cheques and to the payment of stamp duty on the contract of sale and the transfer of the property; (c) whether, and if so when, the contract and the transfer were stamped; (d) whether, and if so when, the transfer was registered; (e) whether he communicated with the complainants other than in his letter of 3 January 2006; and (f) if so, when this occurred and what communication took place. 115 The Notice also required the Solicitor to produce within 21 days of service his original file on the purchase of the property, copies of the front pages of the contract of sale and the transfer, 'as stamped', and copies of any documents evidencing communication with the complainants. 116 The Notice concluded as follows:- If you JOHN LESLIE HANCOCK are unable to comply with the preceding requirement, you must provide a statutory declaration to me on or before twenty-one days after service of this notice stating the reasons for your inability to so comply. 117 On 16 July 2007, Ms Sharon Moss, the principal solicitor of Denese Vale & Associates, sent a letter to the Solicitor which said in part:- We are the Solicitors now instructed to act on behalf of Anne and David Edwards…. We note that the rectification of the title is now urgent. As you are aware, Mr Edwards is wheelchair-bound. They have been seeking to sell this property for some time now to enable them to continue to meet their ongoing living expenses. We are instructed by Mr and Mrs Edwards that they forwarded to you a cheque on 6th March 2007 in the amount of $5,140.00 payable to the Office of State Revenue in payment of stamp duty on the Chatswood property, being the fourth cheque which they had produced to you for this purpose. We are instructed this cheque has been banked…They are unaware as to whether this has been applied to payment of stamp duty on the Transfer, as you have failed to return calls and advise them of any progress in this matter at all. They therefore demand the immediate return of the sum of $5,140.00, together with an additional sum of $5,140.00, being the interest penalty which has been imposed by the Office of State Revenue, as a result of the non-payment of stamp duty on the Chatswood property at the relevant time and to date. We are instructed by Mr and Mrs Edwards to provide the attached written Authority to you directing you to forward all files which you have in your possession relating to Mr and Mrs Edwards's affairs, ……We are then instructed to complete the transaction for the Chatswood property without further delay. We note we shall require the file for the Chatswood property, including the Contract for Sale and the Transfer…. 118 In a letter to the Law Society dated 5 August 2008, the Solicitor acknowledged having received this letter, which was accompanied by an Authority to Retrieve Files signed by Mr and Mrs Edwards. 119 On 31 July 2007 the Solicitor faxed to the Law Society a copy of a statutory declaration declared by him on that day. Omitting formal parts, it stated:- 1. I refer to the Section 660 Notice and to the Law Society letter dated 27 July 2007 confirming that the Section 660 Notice has been served on 10th July 2007. 2. At the present time I am unable to comply with the Section 660 Notice as a number of original documents are currently with the Office of State Revenue. 3. I request an extension up until Friday 3 August 2007, to complete the reply to the Section 660 Notice. 4. I note that I do not have an original file for this matter, and I am unaware of where it would is (sic), despite detailed searches conducted both personally and by other members of staff. I have created an amalgam of documents since the original file has been lost. 120 On 1 August 2007 Ms Moss sent a letter to the Solicitor which said in part:- We refer to the above matter and our previous letter to you of the 16th July, 2007, a copy of which is attached. We note you have failed to comply with the demand, which has been set out in that letter… It is therefore imperative that you assist Mr & Mrs Edwards as much as is able and we would be pleased to therefore receive your urgent response accordingly. 121 In his letter to the Society dated 5 August 2008 the Solicitor acknowledged having received this letter. 122 On 2 August 2007 the Solicitor sent a letter to the OSR which said in part:- We refer to our letters 2 March 2007 and 13 April 2007 together with our recent telephone conversations with Michael Alexander and Colin Thew from your office. We confirm the advice of Michael Alexander that the fine sought to be imposed in respect of this application was initially calculated in the reduced sum of $2,617.00. As discussed the writer is accepting responsibility for the payment of the fine on behalf of the Edwards who are rightfully the registered proprietors of the property. As outlined in our previous correspondence, the Edwards have been disadvantaged in this situation. As indicated in our recent telephone conversation, this firm is a small practice with 2 full time solicitors and a part time solicitor. There is at the present time, which has accumulated over the last few years a large number of outstanding creditors…. Also we refer to the statutory declaration of John Hancock of 2 March 2007, and note that there have been a number of factors, which have involved lost or misplaced documents from a number of parties have lead to the greatly extended time frame of the matter. Given these circumstances we repeat our request for leniency of the Office of State Revenue in its assessment of the above matter and the imposition of any fines or penalties. 123 On 3 August 2007 the Solicitor faxed to the Law Society a copy of a statutory declaration declared by him on that day. Omitting formal parts, it stated:- 1. I refer to my statutory declaration of 31st July 2007. 2. I refer to the Section 660 Notice and to the Law Society letter dated 27 July 2007 confirming that the Section 660 Notice has been served on 10th July 2007. 3. At the present time I am unable to comply with the Section 660 Notice as a number of original documents are currently with the Office of State Revenue. I have today attempted to contact the person at Office of State Revenue whom I have recently been dealing with and have been advised that he would be in the office later in the day. At this point, I have still not received a response. 4. I request an extension up until Wednesday 8 August 2007, to provide a complete reply to the Section 660 Notice. 124 On 6 August 2007 a file note on the Solicitor's file indicates he attended at the OSR on that day. On this file is a copy of a receipt from the OSR dated 6 August 2007 in the sum of $2,617.00. In his statutory declaration dated 5 September 2007, the Solicitor said that he 'personally paid' this amount. Later that day the Solicitor spoke to Ms Moss. 125 On 6 August 2007 the Solicitor faxed to Sharon Moss a message which said (omitting formal parts):- We refer to our telephone conversation of 6 August 2007. As arranged we enclose copies of the following 1 Stamped transfer 2 Discharge of Mortgage Would you please arrange to send by facsimile transmission a copy of either the Council rate notice, water rate notice or strata levies statement. We will utilize this information for a New Certificate of Title with Land & Property Information. We note that LPI is closed on Monday 6 August 2007. Please confirm with your clients that I may lodge this application with LPI. We confirm that an amount of $2,617 has been paid to the office of State Revenue for penalty interest. The Office of State Revenue has in addition, been paid the sum of $5,140.00 by your clients for stamp duty on the property. 126 On 7 August 2007 Ms Moss faxed to the Solicitor copies of a council rate notice, a water rate notice and a strata levy notice, in order that the Solicitor could apply for a new certificate of title for the property. 127 On 8 August 2007 the Solicitor faxed to the Law Society a copy of a statutory declaration declared by him on that day. Omitting formal parts, it stated:- 1. I refer to my statutory declarations of 31st July 2007 and 3rd August 2007. 2. I refer to the Section 660 Notice and to the Law Society letter dated 27 July 2007 confirming that the Section 660 Notice has been served on 10th July 2007. 3. I refer to my message left on 8 August 2007 for Elizabeth Barnes [a solicitor employed by the Law Society]. I confirm that I have been out of the office due to fever for part of Monday, all day Tuesday and part of Wednesday. 4. I have been requested by the (sic) Sharon Moss the Solicitor for the complainants to complete the application for a new certificate of title. For your information I enclose as annexure "A" copies of Hancocks letter dated 6 August 2007and Denese Vale & Associates letter dated 7 August 2007. 5. I request an extension up until Wednesday 15 August 2007, to provide a complete reply to the Section 660 Notice. 128 On 9 August 2007, Ms Barnes sent a letter on behalf of the Law Society to the Solicitor. It included a statement that she had 'no authority to vary the Notice' and therefore could not accede to his requests for an extension of time. 129 On 10 August 2007 the Solicitor lodged at the Land and Property Information Office documents transferring title to the property to the purchasers. In his statutory declaration dated 5 September 2007, the Solicitor said that he 'personally paid' the filing fee of approximately $360.00. 130 On 16 August 2007 the Solicitor faxed to Ms Moss a message indicating that a new certificate of title for the property had been issued on 15th August 2007 and that when it had been received at his office it would be forwarded to her office. 131 On 21 August 2007 the Solicitor sent a letter to Ms Moss enclosing the certificate of title. 132 On 5 September 2007, the Solicitor sent to the Law Society a statutory declaration declared by him on that day. It contained answers to the questions set out in the section 660 Notice. It also contained the following passage:- -The fact that many of these events occurred some six years ago or more, added unfortunately by ( sic ) the file being missing and Mary [Mason-Cox] passing away, and relevant staff members now having left employment is adding to the difficulty for me to address the allegations by the Edwards. This is one of the main reasons why I requested an extension from the Society three times to respond to the section 660 Notice. In addition, there were numerous documents with the Office of State Revenue, and I was also requested by Sharon Moss of Denese Vale & Associates to complete the stamping and registration process.