CITATION: Council of the Law Society of New South Wales v Karam [2010] NSWADT 170 DIVISION: Legal Services Division APPLICANT Council of the Law Society of New South Wales PARTIES: FIRST RESPONDENT Anthony Joseph Karam SECOND RESPONDENT Legal Services Commissioner FILE NUMBER: 092028 HEARING DATES: 5 July 2010 SUBMISSIONS CLOSED: 7 July 2010 EXTEMPORE DECISION DATE: 5 July 2010 BEFORE: Chesterman M - Deputy President; Riordan J - Non-Judicial Member; Hayes E - Non-Judicial Member CATCHWORDS: Solicitor – disciplinary application – practising contrary to terms of practising certificate – instrument of consent LEGISLATION CITED : Legal Profession Act 2004 CASES CITED: Australian Securities and Investments Commission v Elm Financial Services Pty Ltd (2005) 55 ACSR 411; [2005] NSWSC 1020Council of the New South Wales Bar Association v Butland [2009] NSWADT 177Minister for Industry Tourism and Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72; [2004] ATPR 41-993 APPLICANT A Matalani, solicitor REPRESENTATION: FIRST RESPONDENT C Di Tommaso, solicitor SECOND RESPONDENT L Muston, solicitor By consent: ORDERS: 1. Anthony Joseph Karam is guilty of unsatisfactory professional conduct 2. Anthony Joseph Karam is publicly reprimanded 3. Within thirty-one days of the date of this decision, Anthony Joseph Karam is to pay the costs of the Applicant in these proceedings, as agreed in the sum of $1,500.00. Introduction 1 On 14 July 2009, the Council of the Law Society of New South Wales ('the Law Society') filed an Application alleging that the First Respondent, Anthony Joseph Karam ('the legal practitioner'), was guilty of professional misconduct on a single ground, that of 'practising contrary to the legal practitioner's practising certificate'. Particulars of the alleged misconduct were supplied in a schedule to the Application. 2 In the Application, the Law Society sought the following orders:- 1. That the legal practitioner be publicly reprimanded. 2. That the legal practitioner be fined. 3. That the legal practitioner pay the costs of and incidental to the proceedings before the Administrative Decisions Tribunal. 3 On 14 October 2009, the Law Society also filed an affidavit in support of the Application, sworn by its solicitor, Mr Raymond Collins, on 30 September 2009. 4 In his Reply, filed on 28 January 2010, the legal practitioner denied the ground of the Application while admitting some of the Particulars contained in it. 5 On 5 February 2010, the legal practitioner filed an affidavit that he had sworn on the day of filing. On 23 February 2010, he filed an affidavit by Mr Siew Hong Koh, sworn on the day of filing. 6 On 2 July 2010, an Instrument of Consent, which included a document headed 'Particulars of Agreed Facts', was filed in the Tribunal. It was executed by the Law Society, the legal practitioner and the Legal Services Commissioner. It indicated that the signatories gave their consent to the Tribunal making (a) a finding that the conduct of legal practitioner described in the Particulars amounted to unsatisfactory professional conduct and (b) the following orders, by consent:- 1. The legal practitioner is publicly reprimanded. 2. Within thirty-one days of the date hereof the legal practitioner is to pay the costs of the Council of the Law Society in these proceedings agreed in the sum of $1,500.00. 7 At the hearing before us, which took place on 5 July 2010, Ms Muston represented the Legal Services Commissioner. Through so appearing, pursuant to an entitlement conferred by section 559(1)(c) of the Legal Profession Act 2004 ('the Act'), the Commissioner became a party to the proceedings (as the Second Respondent) under section 559(5). 8 Mr Matalani, appearing for the Law Society, requested us to make orders in terms of those contained in the Instrument of Consent. He tendered unopposed the three affidavits sworn respectively by Mr Collins, the legal practitioner and Mr Koh, and also the Instrument of Consent. Ms di Tommaso, who appeared for the legal practitioner, and Ms Muston supported this request. The Particulars of Agreed Facts 9 The Particulars of Agreed Facts were in the following terms:- A. The legal practitioner was admitted to the Supreme Court of NSW on 10 October 1997. B. In the year commencing 1 July 2006 and ending 30 June 2007, the legal practitioner held a 'restricted corporate' practising certificate, which limited his entitlement to work as a Solicitor only for his employer corporation, nominated as Jadison Pty Ltd. C. Proceedings were commenced by Siew Hong Koh ("the first plaintiff") and David Andrew Evans ("the second plaintiff") against Murchison Metals Ltd ("the defendant") in the Equity Division of the Supreme Court of New South Wales ("the proceedings"). The proceedings were given the file number 1944/05. D. On 20 September 2006, the legal practitioner was contacted by the first plaintiff, on behalf of himself and the second plaintiff. E. As result of this contact, the legal practitioner met with the first and second plaintiffs on the morning of 21 September 2006. At this meeting, the first plaintiff handed the legal practitioner four (4) affidavits relating to the proceedings. F. On the same day (21 September 2006), the legal practitioner appeared in the Directions Hearing before Senior Deputy Registrar Musgrave, on behalf of the first and second plaintiffs. G. Short Minutes of Order were signed by the legal practitioner on 21 September 2006, with the notation " Solicitor for Plaintiff ". H. The Short Minutes of Order included a direction that the Plaintiffs " shall file and serve any affidavits in reply on or before 9 November 2006 ", and listed the matter " for further directions on 16 November 2006 ". I. Following the Directions Hearing, the legal practitioner confirmed the orders with the Plaintiffs. J. In about November 2006, the Plaintiffs sought the legal practitioner's assistance in drafting affidavits for the first and second plaintiffs. K. Affidavits were sworn by the first and second plaintiffs on 13 November 2006. At the time of preparing these affidavits, the legal practitioner did not have access to the file (due to a dispute with the plaintiffs' former Solicitors regarding fees). L. On 16 November 2006, the legal practitioner appeared in the Directions Hearing before Senior Deputy Registrar Musgrave, on behalf of the first and second plaintiffs. On that occasion, the matter was put into the call-over list on 14 March 2007. M. On 14 March 2007, the legal practitioner appeared in the call-over before the Equity Registrar, on behalf of the first and second plaintiffs. On that occasion, the matter was set down for pre-trial directions on 2 May 2007, and was given a hearing date commencing 8 August 2007 (allocated three days). N. The file was still unavailable to the Plaintiffs on 14 March 2007, when the hearing date was set. O. On 2 May 2007, the legal practitioner appeared before His Honour Palmer J, in circumstances where the file was still unavailable to the Plaintiffs. The hearing date was confirmed. P. On 10 May 2007, the costs dispute was resolved. Q. On or about 16 May 2007, the legal practitioner was advised by the first plaintiff that the file was available and had been delivered. R. The legal practitioner then assessed the contents of the seventeen (17) files which had been delivered. S. Throughout the matter, and notwithstanding the services provided, the legal practitioner was aware, and had in fact informed the plaintiffs, that he could not act for them. He advised them that they should retain the services of a litigation specialist. T. On 6 June 2007, the plaintiffs were introduced to Mr Rick Laws of Laurence Commercial Lawyers, by the legal practitioner. U. On or about 18 June 2007, the legal practitioner caused the balance of the files (a further fourteen (14) lever arch files) to be copied and delivered to Mr Rick Laws. V. On 12 July 2007, the Supreme Court (Palmer J) vacated the hearing date that was allocated (8 August 2007), on the motion of the plaintiffs. Indemnity costs were ordered against the plaintiffs. W. An affidavit was sworn by the legal practitioner on 11 July 2007, which was filed on 12 July 2007 in support of the motion to vacate. The legal practitioner failed to note the restrictions to his practising certificate in the affidavit. Relevant provisions of the Act 10 Under the heading 'Compliance with conditions', section 58(1) of the Act states: 'The holder of a current local practising certificate must not contravene (in this jurisdiction or elsewhere) a condition to which the certificate is subject.' A penalty for conduct falling under this provision is specified. 11 Section 496 states that unsatisfactory professional conduct 'includes conduct of an Australian legal practitioner occurring in connection with the practice of law that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent Australian legal practitioner'. 12 Section 498 states, so far as relevant here:- (1) Without limiting section 496 or 497, the following conduct is capable of being unsatisfactory professional conduct or professional misconduct: (a) conduct consisting of a contravention of this Act, the regulations or the legal profession rules,… 2) Conduct of a person consisting of a contravention referred to in subsection (1) (a) is capable of being unsatisfactory professional conduct or professional misconduct whether or not the person is convicted of an offence in relation to the contravention. 13 Under section 562, the Tribunal, after finding that a legal practitioner is guilty of professional misconduct or unsatisfactory professional conduct, may make one or more of a number of orders. These include an order under section 562(2)(e) reprimanding the practitioner. 14 Under the heading 'Consent orders', section 564 states:- (1) The Tribunal may, with the consent of the Australian legal practitioner concerned contained in a written instrument, make orders under this Part without conducting or completing a hearing in relation to the complaint. (2) Consent may be given before or after the proceedings were commenced in the Tribunal with respect to the complaint. (3) If consent is given before the proceedings were commenced, the requirement to conduct an investigation of the complaint (whether commenced or not) may be dispensed with, and any investigation of the complaint already being conducted may be suspended or terminated. (4) This section does not apply to consent given by the practitioner unless the practitioner, the Commissioner and (if applicable) the relevant Council have agreed on the terms of an instrument of consent. (5) Without limiting what may be included in the instrument of consent, the instrument is to contain an agreed statement of facts (including as to the grounds of complaint) and may contain undertakings on the part of the practitioner. (6) The instrument of consent must be filed with the Tribunal. (7) Nothing in this section affects the procedures regarding the commencement of proceedings in the Tribunal where consent was given before the proceedings are commenced. (8) If consent was given before the proceedings are commenced, the proceedings are nevertheless to be commenced with respect to the complaint in the same way as if the consent had not yet been given. (9) The Tribunal is to be constituted in the same way as for the conduct of a hearing into the complaint. (10) In deciding whether to make orders under this Part pursuant to an instrument of consent, the Tribunal may make such inquiries of the parties as it thinks fit and may, despite any such consent, conduct or complete a hearing in relation to the complaint if it considers it to be in the public interest to do so. 15 Under the heading 'Costs', section 566(1) states:- The Tribunal must make orders requiring an Australian legal practitioner whom it has found to have engaged in unsatisfactory professional conduct or professional misconduct to pay costs (including costs of the Commissioner, a Council and the complainant), unless the Tribunal is satisfied that exceptional circumstances exist. Principles governing consent orders 16 The following passage from the Tribunal's decision in Council of the New South Wales Bar Association v Butland [2009] NSWADT 177 (at [29 – 31], [33] and [35]) provides useful guidance as to the matters that we should take into account in deciding whether to make the consent orders suggested in the Instrument of Consent:- 29 Section 564(1) and (10) of the Legal Profession Act makes plain that the Tribunal has a discretion whether or not to make orders consented to in an instrument of consent under that section. The Tribunal does not act, nor should it be seen, as merely a "rubber stamp" – see the comments of the Federal Court in a similar context in Australian Communications and Media Authority v WE.NET.AU Pty Ltd [2008] FCA 1530 at [8]. Nonetheless, the consents of the parties and the Legal Services Commissioner are matters that deserve significant weight. 30 These circumstances are similar to, and some guidance can be derived from, cases where Courts exercising regulatory or disciplinary powers are presented with joint submissions by the parties (often including the relevant regulator) as to the appropriate civil penalties and consent orders which they request the Court to make. These often occur in matters under the civil penalty regimes such as those established by the Trade Practices Act 1974 (Cth) or the Corporations Act 2001 (Cth) and involving, respectively, the Australian Competition and Consumer Commission or the Australian Securities and Investments Commission. 31 Barrett J set out the Supreme Court's approach to consent orders in regulatory matters (including orders in relation to disqualification from management) under the Corporations Act and related legislation in Australian Securities and Investments Commission v Elm Financial Services Pty Ltd (2005) 55 ACSR 411; [2005] NSWSC 1020, as follows:- 9 The parties have, in each case, agreed the duration of the disqualification. That, however, does not absolve the court of its duty to consider the appropriateness of the penalty in the light of the agreed facts and the surrounding circumstances. This is made clear by the decisions of the Full Federal Court in NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission [1996] FCA 1134 ; (1996) 71 FCR 285 and, more recently, Minister for Industry Tourism and Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72; [2004] ATPR 41-993 (and see, in the present statutory context, Australian Securities and Investments Commission v Vizard (2005) 54 ACSR 395). In the Mobil Oil case (at [51]) the following propositions were seen as emerging from the reasoning in NW Frozen Foods : "(i) It is the responsibility of the Court to determine the appropriate penalty to be imposed under s 76 of the TP Act in respect of a contravention of the TP Act. (ii) Determining the quantum of a penalty is not an exact science. Within a permissible range, the courts have acknowledged that a particular figure cannot necessarily be said to be more appropriate than another. (iii) There is a public interest in promoting settlement of litigation, particularly where it is likely to be lengthy. Accordingly, when the regulator and contravenor have reached agreement, they may present to the Court a statement of facts and opinions as to the effect of those facts, together with joint submissions as to the appropriate penalty to be imposed. (iv) The view of the regulator, as a specialist body, is a relevant, but not determinative consideration on the question of penalty. In particular, the views of the regulator on matters within its expertise (such as the ACCC's views as to the deterrent effect of a proposed penalty in a given market) will usually be given greater weight than its views on more "subjective" matters. (v) In determining whether the proposed penalty is appropriate, the Court examines all the circumstances of the case. Where the parties have put forward an agreed statement of facts, the Court may act on that statement if it is appropriate to do so. (vi) Where the parties have jointly proposed a penalty, it will not be useful to investigate whether the Court would have arrived at that precise figure in the absence of agreement. The question is whether that figure is, in the Court's view, appropriate in the circumstances of the case. In answering that question, the Court will not reject the agreed figure simply because it would have been disposed to select some other figure. It will be appropriate if within the permissible range." 10 There has been some criticism of this approach as involving "platitudes": see per Weinberg J in Australian Prudential Regulation Authority v Derstepanian [2005] FCA 1121. And in Vizard (above), the court imposed a higher penalty than that agreed by the partiers and sought by the regulator. 11 It is clear that the court is in no way constrained by the parties' agreement and that, having made the declaration of contravention, it must exercise its discretion as to penalty. In the present case, the factual background does not, to my mind, indicate that the respective periods of disqualification proposed by the parties are inadequate. ... 33 If the necessary adjustments to these principles are made to take into account the express statutory regime under s. 564 of the Legal Profession Act and the particular nature of the disciplinary powers being exercised by the Tribunal, we believe they provide useful guidance as to the exercise of the Tribunal's discretion in cases such as the present…. 35 Having regard to all the facts and findings made by us in our previous reasons for decision, the Instrument of Consent and the submissions made by the parties, we did not and do not perceive that there was any additional material which should have been before the Tribunal before it could reach a decision on whether it was appropriate to make orders (a) and (b) referred to above. Discussion and conclusions 17 On reviewing the evidence tendered and admitted at the hearing, we find that it adequately substantiates the matters outlined in the Particulars of Agreed Facts. 18 In his brief submissions to us, Mr Matalani specifically mentioned the following aspects of the evidence: (a) while the legal practitioner did not act for the Plaintiffs in commencing the Supreme Court proceedings to which they referred, he represented them at four directions hearings (on 21 September 2006, 16 November 2006, 14 May 2007 and 2 May 2007); (b) following the first of these hearings, he signed Short Minutes of Order, a copy of which was annexed to Mr Collins' affidavit; and (c) with reference to the affidavits that he prepared for the Plaintiffs, he stated in his own affidavit that the assistance that he rendered did not include giving legal advice but was confined to 'helping them with the form and format of the affidavits'. 19 At the hearing, Ms Di Tommaso and Ms Muston did not seek to add to these observations by Mr Matalani. 20 In his Reply and his affidavit, the legal practitioner did not dispute the principal allegations of fact set out in the Application. The grounds on which he contested the Law Society's claim that he had committed professional misconduct were based on legal arguments stemming from section 14(3) and section 87 of the Act. His execution of the Instrument of Consent signified that he no longer wished to rely on these arguments, and we need not consider them here. 21 The Particulars of Agreed Facts state, and the evidence substantiates, that the legal practitioner engaged more than once in conduct contravening section 58(1) of the Act. Under section 498(1), such conduct is 'capable of being unsatisfactory professional conduct or professional misconduct'. We take into account here the well-known principle, stemming from Allinson v General Council of Medical Education and Registration [1894] 1 QB 750, that professional misconduct at common law is conduct that would 'reasonably be regarded as disgraceful and dishonourable by professional brethren of good repute and competency'. The legal practitioner's behaviour in this case, while deserving of rebuke and clearly not to be ignored, is not at this level of seriousness. We are satisfied that, as stated in the Instrument of Consent, it is properly to be characterised as unsatisfactory professional conduct. 22 We are satisfied also that the penalty of reprimand proposed in this Instrument is within the appropriate range and that the evidence discloses no 'exceptional circumstances' such as to preclude a costs order in favour of the Law Society under section 566 of the Act. 23 On the day of the hearing, 5 July 2010, we accordingly gave an ex tempore decision giving effect to the orders proposed in the Instrument of Consent. Our orders are in the following terms:- By consent: 1. Anthony Joseph Karam is guilty of unsatisfactory professional conduct. 2. Anthony Joseph Karam is publicly reprimanded. 3. Within thirty-one days of the date of this decision, Anthony Joseph Karam is to pay the costs of the Applicant in these proceedings, as agreed in the sum of $1,500.00. 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.