The Legal Services Tribunal of New South Wales CITATION : Thomas Hugh Walker [1994] NSWLST 23 PARTIES : Thomas Hugh Walker FILE NUMBER(S) : of 1993 CORAM: Mr C. Vass (Presiding Member) - Mr J.W. Brennan - Mr N. Reidy CATCHWORDS: :- Falsely attesting to signatures professional misconduct LEGISLATION CITED: Legal Profession Act 1987 CASES CITED: Allinson v General Council of Medical Education and Registration (1894) 1 Q; Law Society of New South Wales v Bannister (1993) 4 LPDR DATES OF HEARING: 11 November 1994. DATE OF JUDGMENT: 12/15/1994 LEGAL REPRESENTATIVES: Mr I. Wales appeared for the Law Society of New South Wales Mr S. Gullotta for the Solicitor. JUDGMENT: Solicitor required employed solicitor to attest signatures of five persons to a guarantee when the employed solicitor was not present. Solicitor also required employed solicitor to sign a `solicitor's certificate' certifying that she had explained the nature and effect of the document to the clients when this was not the case. Solicitor guilty of professional misconduct. Solicitor reprimanded and fined $4,000. BY ITS COMPLAINT THE COUNCIL OF THE LAW SOCIETY OF New South Wales alleged that Thomas Hugh Walker (the solicitor) required his employed solicitor Jeanine Michele Bellamy to attest the signatures of five persons to a guarantee when in fact she was not present at the time that those signatures were ascribed to that document and also required her to sign a document headed "Solicitor's Certificate" certifying to Farrow Mortgage Services Pty Limited that she had explained the nature, effect and contents of a mortgage and guarantee to a mortgagor and guarantors respectively when the solicitor knew that was not in fact the case. The particulars alleged: "(a) At all material times referred to in this complaint the solicitor was a partner in the law firm of "T.H. Walker & Co". (b) At all material times referred to in this complaint, the law firm of "T.H. Walker & Co" acted for and on behalf of Fortuna Cove Pty Limited ("Fortuna") in relation to certain loans and advances made by Farrow Mortgage Services Pty Limited ("Farrow") to Fortuna ("the Loan Transaction"). (c) It was a term and condition of the Loan Transaction and a requirement of Farrow that: (i) the monies loaned and advanced by Farrow to Fortuna be secured by way of mortgage granted by Fortuna to Farrow; (ii) the covenants, agreements and obligations of Fortuna under the said mortgage be guaranteed by the directors of Fortuna; (iii) Farrow be supplied with a certificate signed by a solicitor acting for Fortuna and the guarantors of the said mortgage certifying, inter alia, that the said solicitor had explained the nature, effect and contents of the said mortgage and guarantee to Fortuna and the guarantors respectively. (d) In or about September or October 1989, and in furtherance of the requirements referred to in (c)(ii) above, the Solicitor presented to Bellamy a guarantee bearing the signatures of Thomas Hugh Walker, Rosemary Helen McDonald, David Nelson Gilmour, Ji-Shen Chen and Peter Kao ("the Guarantors") and required Bellamy to sign the guarantee attesting to have witnessed and been present during the signing of the guarantee by each of the Guarantors, when that was not in fact the case. (e) In or about September or October 1989, and in furtherance of the requirements referred to in (c)(ii) above, the Solicitor required Bellamy to sign a document headed "Solicitor's Certificate" certifying to Farrow that Bellamy had explained the nature, effect and contents of the said mortgage and guarantee to Fortuna, and the guarantors respectively when the solicitor knew that was not in fact the case." The Society sought to have the Tribunal make such orders as it thought fit and also to order that the solicitor pay the Society's costs. The Society relied upon in support of the Complaint a statutory declaration of Frederick John Smith the manager of the Professional Standards Department and annexed to that statutory declaration were a number of letters that had passed between the Society and the solicitor. The letter written by the Society to Mr Walker on 22nd January 1993 stated to Mr Walker that Mrs Bellamy, who was previously Miss Todd, had advised the Society that during the term of her employment with the solicitor "she was, some time in October of 1989 requested by you to sign a `Solicitor's Certificate' in respect of a mortgage loan from Farrow Mortgage Services Pty Limited to Fortuna Cove Pty Limited where, it is understood, your firm acted for the mortgagors - guarantors and when she did not give the requisite advice. Furthermore, that she was requested to append her signature to other mortgage documentation in respect of that advance purporting to have witnessed the signatures of Messrs McDonald, Gilmour, Shen Chen, Kao as well as of yourself when she had not done so". The solicitor was invited to respond. The solicitor responded to the solicitor for the Society by letter of 9th February 1993 and in that letter he indicated that he thought it was more appropriate for a solicitor other than himself sign the certificate because he was a director of the mortgagor company. He said "consequently I requested Jeanine Bellamy, solicitor, to provide the certificate in regard to each of the director's guarantees". The solicitor for the Society wrote back to the solicitor on 18th February 1993 and sought clarification. In the letter he asked the question "whether when asking Ms Bellamy to undertake the conduct set out in my letter of 22nd January 1993, you were asking her to do so without having either witnessed the signatures in question or, having given the requisite advice." The solicitor responded on 8th March 1993 and in the response in our opinion did not adequately answer the question. He said in his letter "I advise that I witnessed the signatures of the guarantors and I also gave the requisite advice". It was put to him (page 20 of transcript) that the letter of 8th March 1993 was something less than a frank response to the Society's enquiry. He answered "No, I don't agree. The Law Society letter of 18 February says, in the second paragraph, `without having either witnessed the signatures in question or having given the requisite advice'. I did witness the signatures; I did give the requisite advice" . The mortgage document entered into between Fortuna Cove Pty Limited and Farrow Mortgage Services Pty Limited is annexed to the statutory declaration of Frederick John Smith and the document reveals that the signatures of T.H. Walker, R.H. McDonald, D.N. Gilmour, Ji-Shen Chen and Peter Kao were all witnessed by J. Todd now Mrs Bellamy. Also annexed to the same declaration is the Solicitor's Certificate which is in the following terms: "I Jeanine Michele Todd of T.H. Walker & Co. Solicitor hereby certify that I am acting as the Solicitor for the Borrower(s) and the Guarantor(s) in relation to the above mortgage loan transaction and that `before the Borrower(s) and the Guarantor(s) executed the Mortgage and Guarantee documents I explained to them the nature, effect and contents of the documents, and their respective obligations and liabilities thereunder. This included the filed Memorandum of Covenants. I also gave them copies of the documents. I understand that the Mortgagee will rely upon this Certificate in making the said Mortgage advance". The certificate does not bear a date but it is signed J. Todd. Ultimately the guarantee became the subject of litigation in the Supreme Court. Mr Wales informed the Tribunal that the venture for which money was advanced by Farrow went sour and it sought to rely on the guarantees. The various guarantors then became involved in proceedings in the Supreme Court in which they sought to say they were not bound by the guarantees because they did not understand the effect of them. The Society also relied upon the statutory declaratory of Jeanine Michele Bellamy sworn on 18th July 1994 and annexed to that declaration was her earlier declaration sworn on 30th May 1994. The annexures to those statutory declarations included copies of the transcript in the proceedings Pyramid Building Society (In Liquidation) v Walker and also annexed is a copy of the judgment in those proceedings handed down by his Honour Mr Justice Rolfe on 1st December 1993. It appears from the transcript that when Mrs Bellamy was giving evidence it was put to her "the certificate that is attached to your statement is false, is it not" and her answer is "yes it is". Rolfe J in his judgment referred to the evidence given by Mr Walker in the Supreme Court proceedings dealing with the circumstances that gave rise to Mrs Bellamy signing the certificate. His Honour says that Mr Walker gave the following evidence: "Q: So that you knew of course that the certificate was untrue at the time it was sent to Farrow, correct? A: Well, I would like to qualify that in the sense that I believe that the certificate, given by my employee would be given on behalf of my firm, would be acceptable. His Honour Q: What do you mean by that? A: I felt that Farrow's solicitors would not accept a guarantee signed by me as a party to that transaction, so I believe that as I had explained the guarantee documents to the guarantors that I was satisfied that I had done that, that a guarantee - a solicitor's certificate given by my employee would be sufficient. Q: Sufficient for what? A: Sufficient for the purpose of certifying the guarantors knew what they were signing. Q: Did you advise Farrow that that was the way in which things had taken place? A: No. Q: So if somebody had just read the certificate they would have been entitled to assume that Miss Todd had given the explanation? A: That's correct". His Honour said at page 79 of the judgment: "I have considered Mr Walker's evidence in this matter with care. Whilst I am of the view that it was quite inappropriate for Mr Walker to ask Mrs Bellamy to sign the certificate in the circumstances, I am not satisfied that he was untruthful when he told her that he had explained the effect of the documents nor that he would require her to sign the certificate if he had not done so. In my opinion Mr Walker made this request of Mrs Bellamy for the reason he gave and after he had given the explanation". Mr Gullotta relied upon the statutory declaration of the solicitor dated 31st August 1994. In paragraph 9 of that statutory declaration the solicitor dealt with the circumstances surrounding the solicitor Mrs Bellamy signing the certificate and witnessing the various signatures. The paragraph reveals that settlement of the transaction was due the following day and that settlement was already overdue and the directors had attended the office to discuss and execute the mortgage documents. The meeting apparently went on from about mid-day until about 4-4.30 in the afternoon. He said that he formed the opinion that the mortgagee would not accept certificates signed by himself because he was a director of one of the mortgagor companies. He goes on to say that after the meeting he called Mrs Bellamy into the room because he knew that she was aware of the transaction and she knew the parties. He said "I told her that I had explained the mortgage documents and the guarantees in great detail and I asked her to sign the certificate. I do not believe that I applied any pressure upon her to sign or implied any pressure. It was simply a request on my part. I said words to the effect `We have just had a meeting of the Fortuna Cove directors to sign loan documentation. I have explained the documents to the guarantors but I cannot give the solicitor's certificate because I am one of the parties. Would you just sign the certificate and also witness the signatures of the guarantors'. She complied with my request without objection or any indication of objection". In paragraph 10 of his declaration he indicates that he is now very much aware and that he has been for some considerable time that his request for Mrs Bellamy to witness the signatures and sign the certificate was inappropriate and he went on to say "I deeply regret what I have done and that I have placed Jeanine Bellamy in the position that she is now in". Mr Gullotta at page 19 of the transcript asked the solicitor: Q: What do you say as to your feelings now regarding your conduct in connection with requesting Mrs Bellamy to sign the certificate on the Farrow documentation? A: I know that what I did was very wrong and that I would never do that again. I did it under the pressure of work. It was a deadline to meet the next day. I was under a Notice to Complete which had to settle the next day and I was convinced that I had signed - I had explained the nature of the guarantee to the guarantors. I made a mistake in judgment and now, having read cases such as the Fraser case in the Supreme Court in 1992, I certainly would never repeat that conduct. Q: What is your understanding as to the nature of what was wrong about your conduct? A: I mislead a solicitor, the solicitor acting for the mortgagee; I have brought disrepute upon solicitors in general; I may have put a mortgagee at risk, although as circumstances transpired that didn't occur". When Mr Wales cross-examined Mr Walker he dealt at some length with the proposition that Mr Walker had directed Mrs Bellamy to witness the signatures and sign the certificate as distinct from requesting her to do those tasks. Mr Wales referred to a letter that Messrs Price Brent solicitors acting on behalf of the solicitor wrote to the Law Society on 8th July 1993 and the solicitor's attention was drawn to the paragraph in that letter which said "Nowhere did Mrs Bellamy give evidence that in the circumstances prevailing at the time she signed the documents, she thought she might lose her job. Understandably. with the benefit of hindsight she now purports to explain her own misconduct by making that assertion". It was put to the solicitor that that letter sought to cast at least some of the blame on to Mrs Bellamy and he responded that that was not the intention. He was pressed that "on a fair reading of that letter, it was a letter which sought to cast some of the blame for what happened on Mrs Bellamy" and he responded "Yes". The solicitor also eventually agreed that it was an entirely unworthy suggestion to suggest that Mrs Bellamy shared some of the blame for what had happened in September 1989. Mr Wales in his address pointed out that there had been a large number of decisions by this Tribunal dealing with the false witnessing of documents where the Tribunal had found that such an act was an act of professional misconduct. He also handed to the Tribunal the decision of this Tribunal in the complaint involving Mrs Bellamy which was determined on 31st August this year. She was found by that Tribunal to be guilty of professional misconduct and the Tribunal went on to consider her character, the position in which she found herself, her general contrition and then went on to impose no penalty beyond the order that the Tribunal made as to costs. Mr Wales submitted that not any of the mitigating circumstances were relevant to Mr Walker's position. Mr Wales submitted that the Society accepted that Mr Walker was a person of good character generally and did not make any submission that this was a case where fitness to practise is an issue. He did however make the submission that the complaint against Mr Walker was more serious than the complaint made against Mrs Bellamy. He said it was more serious "because it involves another solicitor in relation to whom Mr Walker held a position both of authority and trust: authority because he was directly, with his partners, her employer; and trust because an employed solicitor is entitled to look towards his or her employer, in effect, as a proper measure of the appropriate standards to be observed in the profession. The profession remains one in which the standards are really passed on from solicitor to solicitor, almost from generation to generation and, in breaching that position both of authority and trust, Mr Walker did himself, Mrs Bellamy and the profession a severe disservice". He also submitted that at the end of the day it didn't matter whether Mr Walker was or was not autocratic or whether or not the request was a request as opposed to a direction. He sought from the Tribunal a finding of professional misconduct and on the matter of penalty asked the Tribunal to treat it as a more serious case than cases which involve a solicitor him or herself falsely witnessing or falsely certifying documents. Mr Gullotta submitted that the fact that the solicitor requested an employed solicitor to give the certificate and witness the signatures did not make this a more serious category of false certification type case. He submitted that this was not a case of deliberate preying upon the weak or the inexperienced and said it was a "sad and - ultimately for the solicitor - bordering upon tragic error which has unfortunately had consequences for the other person, Mrs Bellamy, the employed solicitor who became involved through his lack of judgment in this instance". He also submitted that this was not a case where the employed solicitor would feel that she had been coerced into signing the certificate and witnessing the signatures. The Tribunal does not have to find whether the type of offence allegedly committed by Mr Walker is more serious than the offence of falsely giving a certificate or falsely witnessing signatures. Those matters go to penalty rather than to answering the basic question as to whether a solicitor is guilty of professional misconduct or not. Section 127(1 )(b) of the Legal Profession Act 1987 defines "professional misconduct" as including "(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 role of legal practitioners;" The meaning of "professional misconduct" is defined in the decision in Allinson v General Council of Medical Education and Registration (1894) 1 QB 750. In his judgment Lopes LJ said that such conduct would be something done by a person in pursuit of his profession "which would be reasonably regarded as disgraceful or dishonourable by his professional brethren of good repute and competency". It was drawn to our attention by Counsel for the Law Society that there have been a number of determinations of the Tribunal in recent years where a practitioner has made false statements particularly witnessing signatures in the absence of signatories where the attestation stated that the signatures were witnessed in the presence of the solicitor witness and in those determinations of the Tribunal there were findings of professional misconduct on the part of the solicitor. The Tribunal is of the opinion that where a solicitor requests another solicitor, particularly where that solicitor is an employee and much junior to himself, to attest signatures where the persons do not sign the documents in the presence of that solicitor, and to sign a certificate to the effect that the document was executed in the presence of the solicitor and that the contents of the document had been explained to the signatories, is an action which would be regarded as disgraceful and dishonourable by his or her professional peers of good repute and competency. In those circumstances the Tribunal finds that the solicitor is guilty of professional misconduct. The jurisdiction of this Tribunal is protective rather than punitive and that position was affirmed by Mr Justice Sheller in the decision Law Society of New South Wales v Bannister (1993) 4 LPDR 24 when he said "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 solicitor was at the time of the hearing 51 years of age and was admitted to practice in 1972. He practised under the firm name of T.H. Walker & Co. from May 1973. He became bankrupt on 24th March 1994 and from that date continued to work in the firm as an employed solicitor. Ten statutory declarations were tendered to support the contention that the solicitor was generally of good fame and character. Eight of the statutory declarations are by solicitors of the Supreme Court of New South Wales who have either worked with Mr Walker or have been involved in matters were Mr Walker the solicitor has been on the other side. All the declarations talk of Mr Walker in glowing terms. Two of the declarations are by accountants and they talk of Mr Walker as being a person with both high family and moral values and a person who showed concern for his clients. The Tribunal accepts that the solicitor is a person of excellent character and carries out his duties as a solicitor competently and conscientiously. The Tribunal is of the opinion that no question arises of the necessity of a protective order either striking the solicitor off the Role or suspending his right to practice for a period of time. The Tribunal notes that the solicitor is bankrupt. The Tribunal however believes it must impose a fine in order to uphold the proper standards and to protect the public's interests. Orders The Tribunal therefore orders that: 1. The solicitor is reprimanded. 2. The solicitor be fined $4000.00. 3. The said sum be paid within one year from the date of this order and that thereafter the solicitor be suspended from practice until the said sum be paid. 4. The solicitor pay the costs of the Society such costs to be assessed on a solicitor and client basis as if taxed in the Supreme Court. If agreement cannot be reached between the solicitor and the Society as to the amount of such costs either party to have liberty to apply. 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.