The Legal Services Tribunal of New South Wales CITATION : Francis Piper [1994] NSWLST 8 PARTIES : Francis Piper FILE NUMBER(S) : of 1993 CORAM: Mr D E Hunt (Presiding Member) - Mrs J. Bartos - Mr J.W. Brennan Professional Misconduct - make false statement :- professional misconduct as the attesting witness to signatures CATCHWORDS: professional misconduct in signing an affidavit unsatisfactory professional conduct LEGISLATION CITED: Legal Profession Act 1987 Demetrios v Gikas Dry Cleaning Industries Pty Limited (1991) 22 NSWLR 561; Law Society of NSW v Bannister (1993) 4 LPDR 24 ; CASES CITED: Fraser v Law Society of New South Wales (1992) LPDR 12 ; Demetrios (unreported) 10 May 1993, Luff (1993) 3 LPDR 1, Mitchell (1992) 1 LPDR 6; Rigney (unreported ) 12 July 1993 DATES OF HEARING: 20 April 1994 DATE OF JUDGMENT: 06/09/1994 LEGAL REPRESENTATIVES: Mr C.M. Simpson (instructed by Mr F.J. Smith) appeared for The Council of the Law Society of New South Wales. Mr C.D. Freeman (instructed by Mr P.L. Smith) appeared with and on behalf of the Solicitor. JUDGMENT: Determination In this matter the Council of the Law Society of New South Wales ("the Complainant") made a complaint to the Legal Profession Disciplinary Tribunal ("the Tribunal") pursuant to Section 13 of the Legal Profession Act 1987 in respect of Francis Piper ("the Solicitor"). The Complainant alleged that the conduct of the Solicitor referred to in the complaint amounted to professional misconduct and requested orders that the Solicitor be fined and pay the costs of the Complainant of the proceedings together with such further or other orders as the Tribunal may determine. The Complaint was filed on 31 January 1994 and was heard by the Tribunal on 20 April 1994. At the conclusion of the hearing the decision of the Tribunal was reserved. The Grounds of the Complaint were in the following form: 1. The Solicitor was guilty of professional misconduct in signing a loan agreement as the attesting witness to signatures thereon purporting to be the signatures of Hin Siang Khoo and Foo Siang Khoo when he did not in fact attest those signatures. 2. The Solicitor was guilty of professional misconduct in signing an affidavit verifying certain grounds of defence on behalf of Hin Siang Khoo and Foo Siang Khoo wherein he represented he had administered an oath to those persons and attested their signatures when the fact was he had not. The facts relied upon by the Complainant were freely admitted by the Solicitor who acknowledged that his conduct amounted to professional misconduct. Agreement was reached between the Complainant and the Solicitor that should the Tribunal find the Solicitor's actions constituted professional misconduct and order him to pay the costs of the Complainant that those costs should be assessed and agreed in the sum of $1,770.00. Notwithstanding those admissions it is of course a matter for the Tribunal to consider the evidence so that it might properly decide whether the facts established are sufficient to constitute a finding of professional misconduct and in the event that such a finding is made then to determine the appropriate orders. The Solicitor The Solicitor is aged 50 and is a sole practitioner currently in practice at Tweed Heads. He is married with a sixteen year old son and was admitted to practice on 14 June 1974. From about 1961 he had worked with the then New South Wales Department of Attorney General and Justice and subsequently in the office of the Clerk of the Peace. After his admission the Solicitor worked for about six years as an employed solicitor at Murwillumbah and then for a period of about eighteen months as an employed solicitor in Coolangatta before opening his present practice on 1 July 1981. His practice is of a general nature including conveyancing, commercial work, some estate matters and some family law work. The Solicitor has contributed to the administration of justice and the community generally in his area through his work as a duty solicitor at the Local Court for the Legal Aid Commission and he has also had an involvement with Camp Quality which is an organisation providing holidays and excursions for children who suffer from cancer. The circumstances that gave rise to these complaints were brought to the Complainant's notice by the Solicitor. In his evidence he stated that the litigation that arose in relation to the loan agreement referred to in the complaint and these disciplinary proceedings had affected his marriage and contributed to his separation from his wife. Background In about 1982 the Solicitor commenced to act for four brothers who had various business interests in the district in which the Solicitor practised. The brothers were Ghee Siang Khoo, (known as and subsequently referred to in this Determination as "Bill Khoo"), Hin Siang Khoo ("Hin Khoo"), Ban Siang Khoo ("Ban Khoo") and Foo Siang Khoo ("Foo Khoo"). Bill Khoo and Ban Khoo lived in Tweed Heads while Hin Khoo lived in Brisbane and Foo Khoo in Cairns. The evidence before the Tribunal was that Bill Khoo had always been the spokesman for the Khoo brothers who controlled a company which operated "The Coolangatta Tavern". In March 1989 Bill Khoo informed the Solicitor that he had arranged a loan of $50,000 for the Company to provide funds needed urgently to pay arrears of rent on The Coolangatta Tavern. The documentation when received provided for the loan to be made to Bill Khoo rather than the Company with guarantees by his three brothers and after some adjustment of the term of the loan, documentation was provided to the Solicitor by the solicitors for the Lender. First complaint - facts Very soon after the Solicitor received instructions Messrs Bill and Ban Khoo visited his office to sign the loan documents, Bill Khoo as borrower and Ban Khoo as one of the three guarantors. Bill Khoo then took the loan documents away to be signed by the other two guarantors, his brothers Foo Khoo and Hin Khoo, with instructions from the Solicitor that the execution of the documents had to be witnessed by a solicitor. Bill Khoo returned subsequently to the Solicitor's office with the loan agreement and a payment direction which appeared to have been signed by his two other brothers whose signatures the Solicitor had previously seen and recognised. The Solicitor was then asked by Bill Khoo to witness the signatures of his two brothers as he stated they had not on short notice been able to get a solicitor to witness their execution of the documents and there was urgency as there was a real concern at the arrears of rent on The Coolangatta Tavern. The Solicitor then purported to witness the signatures of the guarantors Hin Khoo and Foo Khoo although he had not seen either of them sign the loan document which was a Deed of Loan and Guarantee dated 22 March 1989 in respect of a loan of $50,000 to Bill Khoo. In the following month a second loan of $16,000 from the same lender was arranged again with the loan being made to Bill Khoo. His three brothers were joined as guarantors to the Deed of Loan and Guarantee which was dated 28 April 1989. The evidence is quite clear that this Deed was signed by Bill Khoo and Ban Khoo in the presence of the Solicitor and the Deed taken away by Bill Khoo for his other two brothers to sign as guarantors. Again the document was returned by him to the Solicitor unwitnessed. The signatures of Hin Khoo and Foo Khoo were then witnessed by the Solicitor at the request of Bill Khoo who advised the Solicitor that his brothers had again been unable to have their signatures witnessed by a solicitor. Both Deeds are expressed to have been signed by the borrower and the three guarantors in the presence of the Solicitor when in each case two of the guarantors had not signed in the presence of the Solicitor. Second complaint - facts About four months after the Solicitor had returned the first Deed of Loan and Guarantee to the Lender's solicitors, he was consulted by Bill Khoo and was advised that a Statement of Liquidated Claim had been issued in relation to the two loans. The Solicitor was instructed by Bill Khoo to defend the proceedings. Affidavits verifying the Notice of Grounds of Defence were then sworn before the Solicitor by Bill and Ban Khoo and further similar Affidavits were taken away by Bill Khoo to be sworn by his brothers Hin Khoo and Foo Khoo. About a week later Bill Khoo advised the Solicitor that his two brothers had signed their affidavits but had not had their signatures witnessed by a Justice of the Peace. He again requested the Solicitor to witness the two affidavits. After looking at the signatures which appeared to him to be those of the deponents, the Solicitor then signed the affidavits of Hin Khoo and Foo Khoo as if they had been sworn before him. Neither deponent was present at the time and the affidavits were not sworn before the Solicitor who then arranged for them to be filed in the District Court. While the Second Complaint refers only to the Affidavits verifying Grounds of Defence it is clearly admitted that the Solicitor also signed Affidavits as to Venue which purported to have been sworn before by him by Foo Khoo and Hin Khoo when in fact those documents had also not been signed in his presence and, when once more, no Oath had been administered by the Solicitor. The four affidavits of Hin Khoo and Foo Khoo which falsely appeared to have been sworn before the Solicitor were filed in the District Court. Findings On the evidence the two Complaints have clearly been made out. The Solicitor has admitted that he purported to witness signatures in the two loan agreements and in the Affidavits falsely declared that these had beer sworn before him when the deponents were not present and that his conduct amounts to professional misconduct. The Legal Profession Act provides a non-exhaustive definition of professional misconduct in Section 123 as follows:"`professional misconduct' includes (a) unsatisfactory professional conduct, where the conduct is such that it involves a substantial or consistent failure to reach reasonable standards of competence and diligence; (b) conduct (whether consisting of an act or omission) occurring otherwise than in connection with the practice of law which, if established, would justify a finding that a legal practitioner is not of good fame and character or is not a fit and proper person to remain on the roll of barristers or the roll of solicitors; or (c) conduct that is declared to be professional misconduct by any provision of this Act;" The Common Law test still applies and although originally formulated in a medical matter it has long been applied as a test for professional misconduct by legal practitioners. The test was expressed by Lopes LJ in Allinson v General Council of Medical Education and Registration (1894) 1 QB 750 at 763 as follows: "If it is shewn that a medical man, in the pursuit of his profession, has done something with regard to it which would be reasonably regarded as disgraceful or dishonourable by his professional brethren of good repute and competency, then it is open to the General Medical Council to say that he has been guilty of infamous conduct in a professional respect...I do not propound it as an exhaustive definition". The conduct detailed in the First Complaint of purporting to witness the signatures of two of the three guarantors on each of two Deeds of Loan and Guarantee and then returning those documents to solicitors for the Lender we find as disgraceful and dishonourable conduct. The Solicitor's actions represented fraudently that he had seen the two guarantors Hin Khoo and Foo Khoo sign the Deeds in his presence. As a solicitor he knew or ought to have known that his witnessing of those two signatures would be relied upon by the Lender and the Lender's solicitors to establish that the signatures which appeared in the appropriate places on the documents were those of the respective guarantors. The conduct of the Solicitor amounted to a fraud upon the Lender. In Demetrios v Gikas Dry Cleaning Industries Pty Limited (1991) 22 NSWLR 561, the Court of Appeal upheld a finding of fraud by a solicitor in a fact situation described by Mahoney JA at 563 as follows:"Mrs Kiriakidis signed the relevant mortgages. Her signature on them purported to have been witnessed by Mr Demetrios. He had not witnessed her signing them and, his Honour held, what he did in relation to the transactions and in particular upon the settlement of them, constituted fraud. His Honour found that Mr Demetrios' action, in completing the conveyancing transaction by handing over to the mortgagee's solicitors a mortgage signed as the mortgagor's solicitor as attesting witness, when in fact he had not been present when the mortgage was signed amounted to fraud." The settlement of both loans in this matter was effected by the Solicitor returning the signed documents to the lender's's solicitors who then sent the proceeds of the advance to the Solicitor. However, the same representations clearly apply whether a solicitor personally attends such a settlement or effects settlement by post or some similar means. The actions of the Solicitor, in the view of the Tribunal, in witnessing the signatures of Hin Khoo and Foo Khoo on the loan documents clearly constituted professional misconduct. The Tribunal finds it is comfortably satisfied that the Common Law test as outlined in Allinson (supra) is also established in relation to the Second Complaint. The Solicitor by his purporting to witness the two Affidavits Verifying Grounds of Defence represented to the Court, to the Plaintiff and to all concerned in the action that the Affidavits of Hin Khoo and Foo Khoo were duly sworn before him. The Tribunal finds that this false representation was made wilfully and also amounts to professional misconduct. This Tribunal in recent times has had to deal with a number of complaints relating to the improper witnessing of documents. The purpose of such documents being properly witnessed or as in this Second Complaint, sworn, is clear. Documents of the nature of the Deeds of Loan and Guarantee create and define important legal rights. The administration of justice through the Courts of this State depends amongst other things upon the integrity of the solicitors of this State as Officers of the Court. The Solicitor in representing that the Affidavits Verifying Grounds of Defence were sworn before him departed in the view of this Tribunal from the basic requirements of professional conduct in a disgraceful manner which leaves us in no difficulty in finding that professional misconduct is established. Consequences of findings It is very clear that the Tribunal must make its own assessment of appropriate orders independent of the submissions of the parties. The Court of Appeal in Law Society of NSW v Bannister (1993) 4 LPDR 24 at p.30 illustrated this when referring to the hearing before the Tribunal in the following terms:"On more than one occasion during submissions to the Tribunal its counsel indicated that the Law Society left it to the Tribunal to decide whether the Solicitor was unfit and whether or not his name should be removed from the roll. At no stage did counsel urge or even suggest that on the evidence the Tribunal was bound to order that the Solicitor's name be removed from the roll". In that matter the Court of Appeal allowed an appeal by the Law Society against a fine imposed by the Tribunal and ordered that the name of the solicitor be removed from the roll. The finding of professional misconduct against a solicitor is a grave matter. The Complainant seeks the imposition of a fine. It is clear that the Tribunal, while taking into account the submissions of both parties, must itself after consideration of all relevant factors determine what penalty if any, should be imposed. In Bannister (supra) Shellar JA in the joint judgment of the Court of Appeal said on the question of penalty (at 28):"...The exercise of the power to remove from the roll, to suspend or fine a solicitor is directed to protecting the public by ensuring that those unfit to practice do not continue to hold themselves out as fit to practice and that high standards are maintained. The maintenance of such standards involves deterring the offender from repeating the offence and deterring others who might be tempted to offend." The conduct of the Solicitor cannot be excused or condoned on the basis that it occurred as the result of urgency or pressure from a client or from a desire to assist a client in times of difficulty or on the basis that the Solicitor's conduct was in no way related to any personal gain or benefit for himself. The Solicitor falsely and indeed fraudulently witnessed signatures on loan documents and affidavits when the documents were not signed (and, where applicable, not sworn) in his presence. The actions all involved the same clients in related dealings with one other party over a fairly short period of time. To that extent the Solicitor's misconduct can be classified as isolated. It should also be stated that at the time the Solicitor purported to witness the signatures and administer the oaths he believed that the signatures on the deeds and affidavits were those of the deponents. In his letter to the Law Society dated 11 February 1992 he stated "I remain of the belief that Foo Khoo did sign the loan documentation and probably the Affidavit and that Hin Khoo possibly did so." While this is no excuse by the Solicitor it does shed some light on why he acted as he did. The Solicitor's misconduct was brought to notice by his own action in writing a full and frank 14 page disclosure to the Law Society. He has been frank and contrite in his evidence before this Tribunal. Although the Solicitor has not followed the conventional and indeed helpful course of producing character evidence he is entitled to place reliance on his own unchallenged evidence of his good character and standing in the community. This case can clearly be distinguished from Fraser v Law Society of New South Wales (1992) LPDR 12 where the Tribunal was at first instance confronted by a solicitor who clearly did not acknowledge or appreciate the seriousness of his misconduct. It was when that solicitor was asked a number of questions by the members of the Court of Appeal that he at last came to realise the gravity of his misconduct and its legal, professional and moral consequences. The Solicitor in this matter not only brought his misconduct to notice but in the view of the Tribunal clearly appreciated the seriousness of such behaviour in his evidence before the Tribunal. The evidence before us makes it clear that the Solicitor personally faces large financial losses arising out of this misconduct. The Lender in the transactions took recovery action against the Solicitor who consented to judgment being entered and he owes on that account an amount of $126,829.14. The Solicitor in this matter has freely and frankly admitted his misconduct. We are satisfied that he appreciates the seriousness of such misconduct. The consequences have already been quite devastating to him. The Tribunal feels that the Solicitor is unlikely to offend again. The Solicitor has contributed to the welfare of the community through his efforts as a duty solicitor and his work for charity. It is in the interest of the community that he have the opportunity to continue to make those contributions and continue to be able to provide legal services in his fields of practice. The Tribunal finds that the public interest would be best served in this matter by the imposition of a fine. The jurisdiction of the Tribunal is protective not punitive. Although we were assisted by submissions in relation to penalty and references to other decisions of the Tribunal, obviously each matter must be individually assessed. We were specifically referred to the matters of Demetrios (unreported) 10 May 1993, Luff (1993) 3 LPDR 1, Mitchell (1992) 1 LPDR 6 and Rigney (unreported ) 12 July 1993. There are, of course, similarities between this present case and Demetrios (supra) in so far as the Solicitor is also personally subject to action for recovery of losses suffered by the Lender. Indeed in both matters it is probably fair to conclude that the conduct of the Solicitor concerned was only one of a number of factors which contributed to the losses of the Lenders. However, whether the commercial decision of the Lender was sound and whether the Lenders may have sustained a loss irrespective of the Solicitor's misconduct in no way absolves the Solicitor from the consequences of his misconduct. The Lender in this matter and indeed the District Court were both entitled to rely on the integrity and the representations of the Solicitor. Having taken all of these matters into account and the circumstances relating to various matters of a similar nature where fines have been imposed, the Tribunal has concluded that the appropriate fine in this matter is the sum of $7,500. Orders The Tribunal therefore orders: 1. That the Solicitor pay a fine of Seven thousand five hundred dollars ($7,500) within a period of six (6) months from the date of this order. 2. That the Solicitor be suspended from practice at the expiration of the said period of six (6) months if the said fine shall not have then been paid and that such suspension then continue until the fine has been paid. 3. That the Solicitor pay the costs of the Law Society assessed and agreed in the sum of $1,770. 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.