The Legal Services Tribunal of New South Wales CITATION : Vincent John Dellosta (a Clerk) [1991] NSWLST 3 PARTIES : Vincent John Dellosta (a Clerk) FILE NUMBER(S) : of CORAM: Mr G Williams (Presiding Member) - Mr G B Molloy - Mr E Barnum CATCHWORDS: Professional Misconduct - fail to carry out instructions - Professional Misconduct - act without instructions - Unsatisfactory Professional Conduct - fail to carry out client's instructions - Unsatisfactory Professional Conduct - fail to respond to client - Unsatisfactory Professional Conduct - delay :- LEGISLATION CITED: Legal Profession Act 1987 Legal Practitioners Act CASES CITED: Law Society of New South Wales v Keefe DATES OF HEARING: 19/12/90 -05/03/91 DATE OF JUDGMENT: 03/05/1991 LEGAL REPRESENTATIVES: JUDGMENT: The Legal Profession Disciplinary Tribunal In the matter of Vincent John Dellosta (a Clerk) Determination and Orders Before: Mr G. Williams (Presiding Member), Mr G.B. Molloy and Mr E. Barnum on 19 December 1990. Appearances: Mr B. Murdoch appeared on behalf of the Law Society of New South Wales and Mr H.J. Mater, instructed by Messrs Dexter Healey & Co, appeared for the Clerk. These are proceedings brought by the Law Society of New South Wales (Society) against Vincent John Dellosta (Clerk) alleging that the Clerk is not a fit and proper person to be employed or paid in connection with a solicitor's practice and seeking an order that solicitors be prohibited from employing or paying the Clerk in connection with their practice unless leave is given under section 121 of the Legal Profession Act 1987 (the Act). The proceedings are brought pursuant to section 120 of the Act. As this is the first application brought under this section before the Tribunal, it is worth making some observations relating to the peculiarities of the section. Section 120 is a section that applies only to a person who is not a solicitor and is, or was, a clerk to a solicitor. Under sub-section (2) the Society may apply for an order prohibiting any solicitors from employing or paying in connection with their practice, a person who is or was a clerk to a solicitor if the Society is of the opinion that the clerk is not a fit and proper person to be employed or paid in connection with a solicitor's practice or it is of the opinion that the person has been guilty of conduct which, if the person were a solicitor, would have constituted unsatisfactory professional conduct or professional misconduct within the meaning of Part 10 of the Act. Once the Society forms either of those opinions, it may apply to the Tribunal for the said order and the Tribunal may make such an order. Curiously, although there are certain strictures placed on the Society in that it must form one or other of the opinions, there appear to be no such strictures placed on the Tribunal. This is in sharp contrast with section 149 dealing with determinations by the Legal Profession Standards Board and section 163 dealing with determinations by the Tribunal. In both of these sections the relevant determining authority is required, by statute, to be satisfied that the legal practitioner is guilty of unsatisfactory professional conduct or professional misconduct, as the case may be,before it can make orders against that practitioner. In section 120, on the other hand, there is no such statutory requirement as to satisfaction. This Tribunal is of the view that upon the hearing of an application under section 120 the Tribunal needs to be satisfied on the evidence, before it can make an order under sub-section (4), that the clerk is not a fit and proper person to be employed or paid in connection with a solicitor's practice and this is so whether the Society forms an opinion under either of the two sub-paragraphs of sub-section (2). There is a further peculiarity in section 120 and that is that the Tribunal has only the power to make or not make an order under sub-section (4). It does not have the wide powers vested in the Legal Profession Standards Board pursuant to section 149 neither does it have the wide powers vested in the Tribunal under section 163. Both these sections deal with complaints against legal practitioners, not clerks, and in each case the determining authority has wide powers to make various orders, including orders imposing a fine, compensation, and other useful ancillary powers. Again, these contrast markedly with section 120 where the Tribunal only has powers effectively denying the clerk employment in the law or not making such an order. It seems to this Tribunal that there is much to be said for the Parliament vesting in the Tribunal wider powers under section 120 so that orders can be made in suitable circumstances that would not deny the clerk employment within the legal profession. This Tribunal can envisage circumstances where a prohibiting order under sub-section (4) would not be an appropriate order, but other remedies such as a fine or undertakings given by the clerk and/or an employing solicitor may well be more appropriate. It is acknowledged of course, that these are matters some of which could be embraced in the conditions on which leave might be granted under section 121(4) of the Act but that would involve a separate application to the Council or the Court. The grounds of the Society's application are:<R>1. That the Clerk delayed in the handing over of a file to solicitors entitled thereto.<R>2. That the Clerk was guilty of delay with respect to an application for probate of a will in a deceased estate.<R>3. That the Clerk intercepted mail from the Society to the firm by which he was employed and failed to bring that mail to the attention of his employers. The Tribunal had before it a number of unchallenged Statutory Declarations and letters filed and tendered by the Society, a Statutory Declaration by the Clerk and some evidence of good character: the Clerk gave oral evidence. Effectively, the facts were not in dispute and can be summarised as follows: Delay in handing over file The Clerk was employed by a firm of solicitors (the Firm) and as such had been handling the matrimonial affairs of a Mrs Degtereff. Mrs Degtereff apparently changed her solicitors and on 7 May 1985 the new solicitors wrote to the Firm enclosing an authority duly signed by Mrs Degtereff directing that her new solicitors be provided with her file. No response was received by her new solicitors and they wrote again on 28 May 1985, 21 August 1985, 31 October 1985, 21 February 1986 and ultimately the papers where received by the new solicitors shortly after the 22 October 1986. Delay in applying for probate On or about 16 October 1985 Bernadette McCarthy passed away. Shortly thereafter the Clerk was consulted by at least one of the executors named in the will of the deceased. Some 4-8 weeks after death, the executors delivered to the Clerk sufficient documents to enable the Clerk to have applied for a grant of probate. The Clerk apparently did nothing in the estate of any moment or substance and ultimately in about August 1989, one of the partners of the Firm took over the conduct of the matter and probate was granted on 7 December 1989. It cannot be said that the assets in the estate were complicated or that there were any difficulties in the estate that could not have been resolved with ordinary (as distinct from special) care and diligence. Pausing at this point, the Clerk could offer no explanation of his conduct relating to the two above matters. He stated that he was to blame for the relevant delays, that he was responsible, that he accepted that the relevant delays would have adverse effects upon his respective clients and that he was dilatory and muddled. Taken alone, these two matters would not have persuaded the Tribunal that the Clerk was not a fit and proper person to be employed or paid in connection with a solicitor's practice. Intercepting mail from the Society to the Firm and failing to bring that mail to the attention of his employers The more serious charge brought against the Clerk was that he intercepted correspondence addressed to the Firm or addressed to the partners of the Firm, and that he failed to bring that correspondence to the attention of his employers. The evidence, again, was not in dispute and can be summarised as follows: The Society wrote to the Firm that employed the Clerk on 14 May 1986, 19 June 1986, 4 August 1986, 3 September 1986, letters addressed to the individual partners of the Firm on 18 July 1986, a letter addressed to the Senior Partner of the Firm on 3 October 1986, letters addressed to the individual partners of the Firm on 10 October 1986, letters addressed to the Firm on 7 November 1988, 24 November 1988, 1 December 1988, 15 December 1988, 29 December 1988, 31 January 1989, 14 February 1989, 4 April 1989, 25 May 1989 and 30 June 1989. In some of those letters, in particular, letters dated 18 July 1986, 10 October 1986 and 24 November 1988, the attention of the addressee was drawn to the provision of section 71(c) of the Legal Practitioners Act and section 35(2) of the Legal Profession Act (both of which deal with the cancellation of practising certificates). In all of these cases the Clerk effectively intercepted the mail and failed to bring the respective letters to the attention of his employers. The Clerk's explanation was that he thought that he could best answer the various letters and was embarrassed about being found out and wanted to ... "protect my hide". The various letters from the Society dealt with the delays referred to above in the matters of Degtereff and the Estate of McCarthy. The Clerk admitted that the threat to cancel a solicitor's practising certificate was ... "serious stuff" and that the solicitor could lose the right to practise but he attempted to excuse this by stating that he was trying to extricate himself from the problem that he had created. He admitted in cross examination that his action showed a total disregard for the Society's role as a regulating body. He further admitted that his failure to inform his employers effectively misled them in relation to the seriousness, not only of the allegations that were being made relating to the delays, but also to the concern that the Society as the regulating body was expressing as to his conduct. The Clerk compounded his regrettable conduct in a number of separate respects: (a) By informing Mrs Williams, one of the executors of the will in the matter of the Estate of McCarthy that probate had been granted on 9 April 1987 when in fact probate had not been granted and had not even been applied for. (b) By consistently himself failing to reply to the correspondence from the Law Society. (c) By informing the Society by letter dated 30 July 1986 that the file of Mrs Degtereff was being forwarded to her new solicitors that day, when in fact that was not the case and did not in fact happen until shortly after 22 October 1986. (d) By informing the Society in writing by letter dated 30 November 1988 that his main pre-occupation in the Estate of McCarthy was ... "how to ultimately deal with the filing of accounts" when he had not even applied for probate and further stating that he would ... "now proceed to finalise all aspects of this estate" when it is quite clear from the evidence that little or no attempt had been made to put together an application for probate and that probate was not ultimately granted until 7 December 1989. (e) By informing the Society by letter dated 28 February 1989 that he had informed Mrs Brannan, one of the executors in the Estate of McCarthy, that ... "the matter should be completely finalised in 2 or 3 weeks" when this was clearly not the case, and by informing the Society by letter dated 18 April 1989 that "the matter should be finalised at any moment" when, again, this was clearly not the case. (f) By writing to the Society a letter dated 16 January 1989 prepared by him in the estate of McCarthy but with the name of one of the partners of the Firm typed at the foot thereof but not signed by that partner and, indeed, not signed by any person but leaving the clear impression that it was a letter that had, at the very least, been approved by the particular partner. The Clerk gave some evidence in an attempt to explain the content of the letters dated 28 February 1989 and 18 April 1989 and their respective explanatory annexures on the basis that shortly after the letter dated 28 February 1989 in the Estate of McCarthy he received a passbook from one of the executors that required some clarification. But in later evidence he stated that that book had been received after the letter that he wrote to the Society on 18 April 1989. Whatever be the case, there is absolutely no reason, in the view of the Tribunal, why, as at 18 February 1989, this then simple estate could not have been finalised. Indeed, there would appear to have been nothing at all sufficiently complicated in this estate that would have resulted in an application for a grant of probate not being granted until 7 December 1989. There is one other short matter. By an undertaking dated 15 December 1989 the Clerk undertook to the Society not to seek employment in a solicitor's practice nor to be employed by a solicitor upon leaving the employ of the Firm. The Clerk asked to be relieved from that undertaking. The Clerk's explanation for his giving that undertaking was that his employment with the Firm was about to be or had been terminated, that he was devastated, that he would have signed anything and was fearful that he could not find a job. He said that the undertaking had been prepared by one of the partners of the Firm and he believed that if he did not sign the undertaking his employers would be in some trouble with the Society. Although the fact that the undertaking had been signed by the Clerk is a factor to be taken into account, it is the view of the Tribunal that it is necessary to look at the actual conduct of the Clerk in order to see whether or not an order should be made under section 120(4). The above sufficiently sets out the facts. The Clerk was born on 28 April 1940 and is now aged 50 years. He is married, with one child aged 6. He obtained the Leaving Certificate in 1957 and, after a short time working in a bank entered into articles of clerkship in 1958 with one of the partners in the Firm by which he was employed from 1958 to 1989 continuously (although, during that period, the constitution of the Firm changed in that additional partners were admitted to partnership). Effectively, therefore, until the date his employment was terminated (about 15 December 1989) the Clerk only ever had one employer. He has always acted as an employed clerk in the office of a firm of solicitors although for some number of years until about mid 1970 he had a business relationship with the solicitor to whom he had been articled in relation to the ownership of various shops, the conduct of a grocery shop, the conduct of a restaurant and the ownership of some residential buildings. But basically it can be fairly said that his major employment has been that of a solicitors' clerk with the one firm and this appears to have been his sole employment since the mid 1970s. The Clerk sat for Solicitor's Admission Board examinations but failed Commercial Law II and was unable to proceed further with that qualification. The Clerk gave evidence that his employers required him to do outside work on short or no notice that he spent 4 to 5 hours per day outside the office conducting legal searches at the Land Titles Office, instructing in workers compensation matters and carrying out third party negotiations and similar activities. He said that he interviewed clients, being friends and relatives, outside the office on average 3 nights per week. Much of that apparently involved travel but there is no doubt that he did obtain instructions in various matters at the homes of various clients and arranged for documents to be executed at those homes. Of greater concern, however, was the evidence of the Clerk that he had no supervision from any of the partners of the Firm in relation to both the Degtereff matters and that of Estate McCarthy. He said that no partners would have any idea of those particular matters and that most matters that the Clerk handled would have fallen into the same category. He said he would sometimes ask the partners for assistance and advice, but otherwise nobody enquired as to the matters being handled by him and that there was never any close supervision of his legal work. At any one time he had the carriage of about 20 or 30 matters that he had introduced to the Firm. He would obtain instructions direct from these clients and, other than simply entering the matters in the Matters Book and opening a file, none of the partners of the Firm would know anything about the matters being handled by the Clerk other than matters which had been referred to the Clerk for particular activity by one of the partners. It seems to the Tribunal that, after some 30 years of continuous employment in the one firm, the Clerk had a mental barrier in dealing with the two matters of Degtereff and Estate McCarthy. It is out of that mental barrier that all the problems with the Law Society arose and, instead of directly addressing the problems, the Clerk simply hoped that the matters would resolve themselves, or go away. By so doing, he simply compounded the problem and dug himself a bigger hole. It appears that, because of the long and personal association of the Clerk with his employers, the Clerk was so trusted by his employers that they exercised no supervision over his conduct. Indeed, it appears that for the past 25 years the Clerk has been collecting and opening all the letters addressed to the partners, including those marked ... "Personal" or ... "Private and Confidential" and this situation continued notwithstanding some views expressed to the contrary in one of the Statutory Declarations before the Tribunal from one of the partners. Mr Mater candidly, and correctly, admitted that the actions of the Clerk were serious, that his conduct was unmeritorious, but the Clerk understood the seriousness of his transgressions, had seen the error of his ways and that the Tribunal could confidently predict that the Clerk would not let the public or the profession down in the future. He submitted that there was a substantial difference between a clerk and a solicitor and he referred strongly to the case of Law Society of New South Wales v Keefe, a judgment of Supreme Court, Court of Appeal, delivered 15 November 1989. Mr Mater carefully, and forcefully, drew heavily upon the observations of the Court of Appeal. He observed that the purpose of the jurisdiction exercised by this Tribunal is not the punishment of the Clerk, but the protection of the public from persons who are shown by their proved conduct to be unfit to enjoy the privileges and responsibilities of a Law Clerk. He said that the Clerk was an essentially honest person, that his actions were muddled and dilatory rather than deliberately dishonest and that there was no reason to believe that the Clerk would offend again. He stated that, as in the Keefe case, the actions of the Clerk were fundamentally inconsistent with his role as a clerk but that the Court of Appeal in Keefe permitted the Solicitor to continue in practice and that, therefore, as there was a fundamental difference between a clerk and a solicitor, and in this case where the Clerk had not had the benefit of regular experienced qualified supervision and was effectively allowed to do what he wanted in matters that he brought into the firm, the Clerk should, effectively, be permitted to be employed in a solicitor's office and not have an order made against him under section 120(4). For reasons set out earlier in this judgment, the Tribunal has no discretion in an Application brought under section 120. Either the Tribunal makes the order under sub-section (4), or it does not. In the Keefe case, the solicitor gave various undertakings to the Court of sufficient quality to enable the Court to permit him to continue in practice subject to those undertakings. There is no provision in section 120 for undertakings to be given by a clerk, and properly so because the prohibition in sub-section (4) is not so much against the clerk (although that is its direct effect) but against solicitors employing the clerk. As a result, the consequences for a clerk responding to an application under section 120 may be far more devastating than a solicitor responding to a complaint made to the Board or the Tribunal. However, this should not deter the Tribunal from making an order under sub-section (4) in appropriate circumstances. In this case, the Tribunal is driven to the conclusion that, notwithstanding the effect upon the future employment of the Clerk, his conduct was such that the Tribunal should make the order sought by the Society. Having said that, however, the Tribunal wishes to observe that the Clerk is aged 50, he has been employed as a clerk for 30 years, and the Tribunal can envisage circumstances where, upon proper undertakings being given and with the benefit of regular qualified supervision, the Council of the Law Society could grant leave to a solicitor to employ the Clerk pursuant to the powers given to that Council under section 121. It seems to the Tribunal that, in proper circumstances, the Clerk could be usefully and gainfully employed in a solicitor's office. There is one other final observation that the Tribunal would make. It has refrained in this judgment from referring to the name of the firm of solicitors which has employed the Clerk for the past 30 years. Quite serious allegations were made during the course of the evidence against that firm. The Tribunal is less than satisfied with the content of some of the Statutory Declarations made by the partners of the Firm and, from the evidence before the Tribunal, it appears that the way in which the Firm conducted its affairs relating to the Clerk and relating generally to the way in which matters were handled at its office, left much to be desired. It is more than likely that the reason that the Clerk has ended up before this Tribunal is because the partners of the Firm apparently failed to exercise proper control over the way in which the Firm conducted its business. The Society has sought an order that the Clerk be ordered to pay the costs of the Society of and incidental to the proceedings. The proceedings are properly brought, the Society's application has been successful, and the Clerk should pay the Society's costs. This Tribunal is of the opinion that it is not within its power to order costs to be taxed by a taxing master in the Supreme Court. It is appropriate for costs to be either agreed to by the parties or assessed by the Tribunal. It seems to this Tribunal that, in this day and age, costs should be within the competence of the Tribunal and not the subject of a lengthy, expensive, antiquated, system of taxation. Orders The Tribunal makes the following orders: 1. All solicitors are prohibited from employing or paying in connection with their practice Vincent John Dellosta unless the said Vincent John Dellosta has been given leave under section 121 of the Legal Profession Act 1987. 2.(a) The said Vincent John Dellosta pay the costs of the Law Society, such costs to be assessed on a solicitor and client basis as if taxed in the Supreme Court. (b) If an agreement cannot be reached between the said Vincent John Dellosta and the Law Society on the amount of costs, either party to have liberty to apply. Dated this fifth day of March 1991. 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.