The Legal Services Tribunal of New South Wales CITATION : Peter George Star Carver [1990] NSWLST 3 PARTIES : Peter George Star Carver FILE NUMBER(S) : of CORAM: Ms A Plotke (Presiding Member) - Ms N Keesing - Mr D F Castle CATCHWORDS: Professional Misconduct - fail to meet undertaking of Law Society/Bar :- LEGISLATION CITED: Legal Profession Act 1987 Cassidy v Glover; Goodwin v McQuillen,District Court No. 14191 of 1986; Carver v Bankstown Council ; CASES CITED: Carver v Watts & Ledlin; Carver v Moruya Welding; Johnson v Vitex; Allinson v General Council of Medical Education & Registration 1894 DATES OF HEARING: 14/06/89 - 23/08/90 DATE OF JUDGMENT: 08/23/1990 Mr D. Marks of Counsel LEGAL REPRESENTATIVES: Miss Rosemary MacDougal Mr R.A.S. Skiller of Counsel Messrs Star Carver & Co JUDGMENT: The Legal Profession Disciplinary Tribunal In the matter of Peter George Star Carver, solicitor Orders and reasons for determination Before: Miss A. Plotke (Presiding Member), Ms N. Keesing and Mr D.F. Castle Appearances: Mr D. Marks of Counsel instructed by Miss Rosemary MacDougal appeared for the Society and Mr R.A.S. Skiller of Counsel instructed by Messrs Star Carver & Co appeared for Carver ("the Solicitor"). The Complaint in this matter was made to the Disciplinary Tribunal ("the Tribunal") pursuant to Section 135 of the Legal Profession Act 1987 ("the Act") by the Council of the Law Society of New South Wales ("the Society"). The Complaint was heard on 14 June, 2 August, 6 November and 7 December 1989. The sole ground for complaint was: "The continuing failure to abide by an award made by the Joint Tribunal on Fees since on or about 18 June 1987 when the Society forwarded a letter to the Solicitor informing him of a Council resolution on 4 June 1987 that he be censured". The written evidence before the Tribunal on behalf of the Society was contained in the following exhibits: A. a bundle of correspondence between the parties from the file of the Law Society; B. photocopies of the diary of Mr C. Darvall, QC for Wednesday, June 11 1986 and Tuesday, June 24 1986; C. Statutory Declaration of Rosemary MacDougal dated 2 August 1989 annexing Minutes of a Meeting of the Council of the Law Society held on 4 June 1987; D. Letter from the NSW Bar Association to the Law Society dated 15 November 1988 and a letter from the Law Society to the Bar Association dated 8 April 1986; E. Letter dated 24 June 1986 from Mr C. Darvall, <MS>QC<D> and Mr K.A. Garling to the Solicitor; F. three (3) letters dated between October and November 1985 between the Solicitor and the New South Wales Bar Association. The written evidence before the Tribunal on behalf of the Solicitor was contained in the following exhibits: 1. copy of a cheque for Five thousand dollars ($5,000) and note concerning repayment dated 5 July 1984 from the Solicitor to Mr McQuillen (Barrister); 2. Loan Agreement between McQuillen and Mr Goodwin (a client of the Solicitor) dated 15 October 1984; 3. copy letter from the Solicitor to McQuillen dated 3 March 1986 and copy of a letter from McQuillen to the Solicitor dated 6 March 1986; 4. a memorandum of fees from McQuillen to the Solicitor dated 2 May and 24 May 1985; 5. copy letters from the Solicitor to McQuillen dated 23 May 1985, from McQuillen to the Solicitor dated 4 June 1985 and from the Solicitor to McQuillen dated 17 June 1986; 6. a bundle of letters between the Solicitor and the Society; 7. a copy of a letter dated 13 February 1985 between the Solicitor and McQuillen; 8. further letters between the parties; 9. memoranda of fees dated 24 May 1985 from McQuillen to the Solicitor; 10. a copy letter dated 16 December 1988 from the Society to the Solicitor enclosing a copy of the judgment in Cassidy v Glover; 11. extracts from a Statement of Claim and Statement of Defence in the case of Goodwin v McQuillen,District Court No. 14191 of 1986; 12. pages 18-24 of the McGeoch Report dated 24 March 1986. Oral evidence on behalf of the Society was given by Mr K.A. Garling and Mr C. Darvall, QC. Oral evidence on behalf of the Solicitor was given by the Solicitor. The Solicitor did not file a statutory declaration. Both Counsel made oral submissions throughout the hearing. In particular, Counsel for the Society made lengthy oral submissions at pages 196-213 of the transcript. In addition the following written submissions were made: 1. Preliminary submissions by counsel for the Solicitor dated 24 August 1989. 2. Short submissions by Counsel for the Society dated 3 November 1989. 3. Supplementary submissions by Counsel for the Society dated 29 March 1990. 4. Answer to supplementary submissions filed by Counsel for the Solicitor on 2 July 1990. As previously indicated, the sole ground for complaint was the alleged failure of the Solicitor to abide by an award made by the Joint Tribunal on Fees. Thus the central issue in the case was that award. Fees arbitration It is now necessary to summarise the history of the fees arbitration. These events occurred principally between 1985 and 1987. In April and May 1985 Mr A.J. McQuillen ("McQuillen") of Counsel rendered fees to the Solicitor totalling $8,970.00. These fees were generated in six separate matters. By far the largest of these matters concerned the Solicitor personally. These were Carver v Bankstown Council in which fees of $4,050.00 were charged and Carver v Watts & Ledlin in which fees of $2,200.00 were charged. The following parts of the correspondence (mainly between the Solicitor and McQuillen) were strictly referable to the fees. The following appears in a letter from the Solicitor to McQuillen dated July 23 ~1985: "Your fees were exorbitant, hence the severance of our association. Be that as it may, I have not had the opportunity to assess your fees due to lack of time. In any event you were quite aware of the situation regarding payment of any of your fees until the respective cases having been finalised. "Should you wish to enforce payment of your fees, I will have no option than to defend same. "I shall endeavour to look at same shortly." By letter dated 7 August 1985, the Solicitor discussed each of the disputed accounts. The following summarises what the Solicitor said about the six disputed accounts. The amount owing in each matter is shown in brackets: 1. Giffen ($150.00). McQuillen would be paid when the matter was completed; 2. Soryal ($300.00). McQuillen was asked to waive his fees; 3. Carver v Moruya Welding ($270.00). McQuillen's fees "will be paid in three weeks time"; 4. Carver v Bankstown Council ($4,050.00) "We regard your fees as exorbitant and we request that your memorandum of fees be referred to the Disputes Committee"; 5. Carver v Watts & Ledlin ($2,200.00) "Similar to Giffen's case you are aware that your fees will only be paid upon completion of this matter in any event we regard your fees as excessive and we also request that this be referred to the Disputes Committee. "Please refer the matter as above mentioned to the Disputes Committee as soon as possible for our mutual interest." 6. Johnson v Vitex ($2,000.00) An offer was made to settle the fees for $500.00 By letter dated 12 August 1985, McQuillen replied to the Solicitor's letter of 7 August 1985 seriatim: 1. Giffen - McQuillen denied that any agreement had been reached as to the amount of fees or when they were to be paid. 2. Soryal - McQuillen disputed any knowledge of an arrangement relating to fees. 3. Carver v Moruya Welding McQuillen noted the Solicitor's undertaking. 4. Carver v Bankstown Council "My memorandum of fees will be referred to the Bar Association in accordance with the Joint Statement of both the Bar Association and the Law Society of New South Wales. In the meantime you might care to specify the area or areas of exorbitance in relation to my fees." 5. Carver v Watt & Ledlin "There was no agreement that payment of my fees would be made upon completion of this matter. My memorandum of fees will be referred to the Bar Association for appropriate action in accordance with the Joint Statement of the Bar Association and the Law Society of New South Wales. In the meantime you might care to indicate the area or areas of excessiveness which you suggest in respect of my fees..." 6. Johnson v Vitex "No agreement was reached beforehand in respect of fees and the fees contained in my memorandum are in the circumstances proper fees. If you suggest by the terms used by you that my fees are improper, you might care to indicate in what respects the fees are improper. Otherwise the matter will have to be referred to the Bar Association with a request that the matter be dealt with in accordance with the Joint Statement." The following appears in the Solicitor's letter to McQuillen of August 16, 1985: "I would ask that all the disputed matters in respect of your fees be referred to the Disputes Committee as a matter of urgency." The following appears in the Solicitor's letter to McQuillen of 28 August 1985: Please refer all disputed matters for arbitration as soon as you possibly can." By letter of 4 October 1985, the Registrar of the Bar Association notified the Solicitor that a complaint had been received from McQuillen concerning the non-payment of his fees. That letter set out each of the 6 matters in dispute totalling $8,970.00 and asked the Solicitor to reply within 14 days concerning "whether there is any matter which you would like to put before it by way of explanation for the non-payment of the fees." By letter of 31 October 1985 the Registrar of the Bar Association referred to the failure by the Solicitor to reply to his letter of 4 October 1985. He drew the attention of the Solicitor to the "list of Solicitors who have failed to pay Counsel's fees. He then informed the Solicitor that: "If the fees in question amounting to $8,970.00 are not paid within a period of 2 weeks from the date of this letter, action may be taken to place your name on such list." The following appears in the Solicitor's letter to McQuillen of March 10 1986: "as you are no doubt aware, an Arbitrator has already been appointed with a view to arbitrate your claims for fees due to you. "We are currently preparing a statement to be handed to the Disputes Committee and of course we are both bound by the decision of the Arbitrator. "We advise that the outcome of the matter of Carver v Ledlin and Another does not concern you as it is a matter to be arbitrated." Pursuant to the Joint Statement on Counsel's Fees issued by the President of the New South Wales Bar Association and the President of the Law Society of New South Wales on 12 March 1982 ("the Joint Statement") the Bar Association appointed Mr C. Darvall QC on or about November 15 1985 and the Law Society appointed its then president, Mr K.A. Garling, as the Joint Tribunal on Fees ("Joint Tribunal") . There is some doubt as to when and how the Solicitor was notified of the fees arbitration (T12). However the next significant event was a meeting between Messrs Darvall and Garling in Mr Darvall's chambers on 24 June 1986 meeting as the Joint Tribunal. The following is Mr Garling's version of what transpired: "Taking you then to 24 June 1986, you say that you telephoned Mr Carver from Mr Darvall's chambers that afternoon? - that's correct. Was there some reason that you did that? - Because the appointed time had passed. Mr McQuillen was present in the waiting room or in the waiting area of the chambers a~d there was no attendance by Mr Carver or anyone on his behalf, so I picked up the telephone, asked to speak to him, discovered he was there, and surmised that he wasn't attending the arbitration that afternoon. He indicated, as I recall, that he couldn't recall having received any notification of the time, place and date of the arbitration and we then had a discussion about the matter." . Leaving aside the conversation between the Solicitor and Mr Garling, it is sufficient for present purposes to quote from the joint letter sent by Messrs Darvall and Garling to the Solicitor dated 24 June 1986: "You have agreed to have the dispute between yourself and Mr A.J. McQuillen regarding his claim for fees submitted to arbitration in accordance with a joint statement of the New South Wales Bar Association and the Law Society of New South Wales of 12 March 1982. "Mr K.A. Garling spoke with you this afternoon and you indicated that so far as the memorandum of fees submitted by Mr McQuillen are concerned, there is no dispute as to the work done and that there was no prior agreement as to the fees to be charged ... "In order that the dispute may be brought to a prompt conclusion, we issue the following direction: `On or before 8 July 1986 you are to send to Mr Garling a schedule setting out the fees which have been charged in each instance and against each fee your submission as to the amount charged, and if you claim that the amount is manifestly excessive, you should then state the amount which you consider to be reasonable in each instance.' "Upon receipt of this schedule, a copy will be given to Mr McQuillen for his further comment, and the Tribunal will then forward to you any such comments from him and will convene for further consideration as may be necessary." The original of that letter is date stamped as having been received in the Solicitor's office on 26 June 1986 (Exhibit E). According to Mr Garling's evidence, as neither he nor Mr Darvall had heard anything from the Solicitor in the meantime, he and Mr Darvall convened as the Joint Tribunal on 17 July and made their award on that date.(T15) No notice of the hearing on 17 July was given to the Solicitor nor was he informed that the arbitration might be dealt with in his absence. The award made by Messrs Darvall & Garling on 17 July 19~85, recited the dispute between McQuillen and the Solicitor, the agreement of both parties to refer the dispute to arbitration pursuant to the Joint Statement, the fact that they were the respective nominees of their associations and that they had selected Mr J.T. Hiatt <MS>QC<D> as the umpire. The award then provided that the Solicitor pay the sum of $8,970 to McQuillen in respect of the 6 disputed matters, which were itemised. By letter dated 30 July, Mr Garling as President of the Law Society notified the Solicitor of the award as follows: "I refer to the joint letter dated 24 June 1986 issued by Mr C. Darvall and myself. I note that you have chosen not to reply. "Accordingly I enclose the award made by the arbitrators." By letter dated 29 July from the Solicitor to Messrs Darvall & Garling (written before Mr Garling's letter of 30 July but well after the actual award had been made) the Solicitor referred to the joint letter of 24 June, apologised for not replying earlier and requested further time to lodge a submission. By letter dated 5 August to the Solicitor, the Registrar of the Bar Association referred to the award and sought payment of the sum of $8,970 within 14 days. By letter dated 7 August to the Solicitor, Mr Darvall referred to the Solicitor's letter of 29 July requesting further time to lodge a submission. Mr Darvall then wrote: "Our award was made on 17 July 1986 after you had failed to reply to our letter of 24 June. Having made our award we are no~w ®MDBR¯functus officio ®MDNM¯and cannot do anything further in the matter." The following appears in the Solicitor's letter to the Registrar of the Bar Association on 13 August 1986: "We respectfully submit that we do not consider ourselves bound by the order made by the Arbitrator. "On July 29 1986 we wrote to the Arbitrators seeking an extension of time in which to make submissions and we received no reply. "We note that on July 17 1986 the order was made binding the writer in the absence of any written submissions." The following appears in a letter by the Solicitor to Mr Garling dated 13 August 1986: "We are disgusted to say the least at the thought that an Award has been made on an ex parte basis, without having given the writer the courtesy to present written submissions. "An extension of time was requested but alas it was too late. "The writer does not consider himself bound by the award as he feels that the award was made hastily by the arbitrator without hearing any evidence." The following extracts appear in a letter by Mr Garling to the Solicitor dated 9 September 1986: "By letter of 24 June 1986 signed by myself as an arbitrator, those submissions were requested by 8 July 1986. "I have not received any letter from you requesting an extension of time and I note in your letter to the Bar Association you refer to an extension of time being requested by letter of 29 July 1986, some 3 weeks after the deadline required by the arbitrators. "I can assure you the award was not made hastily by the arbitrators and was made with considerable reluctance, having regard to your failure to specify at any time in the course of the dispute any basis for disputing Counsel's fees. "In the circumstances I will be forwarding the file to the Discipline Department of the Society for their consideration. "I draw your attention to the terms of the Joint Statement and the consequences which accrue from failing to comply with the findings of the Joint Tribunal." The following appears in a letter from the Solicitor to Mr Garling dated 11 September 1986: "It is very clear from the tenor of your letter that an arbitration on the merits was not to occur, in view of the fact that an order was made ®MDBR¯ex parte ®MDNM¯by the arbitrators. "As outlined in my letter I am seeking the assistance of the Attorney General to properly investigate this matter, failing which I will reluctantly initiate proceedings against the Law Society in the Supreme Court seeking a Declaratory Order to invalidate the award made by the Arbitrators." By letter dated 30 September 1986 to the Solicitor, Mr Garling reminded the Solicitor that he had still not demonstrated any reasons for not being responsible for the payment of Counsel's fees. Mr Garling also reminded the Solicitor that "failure to pay Counsel's fees in certain circumstances may be considered by the Law Society to amount to professional misconduct." By letter dated 1 October 1986 to the Solicitor, the Discipline Department of the Law Society told the Solicitor that his failure to pay the amount awarded was a complaint and could constitute professional misconduct. He was therefore invited to make submissions as to such failure. The following appears in a letter by the Solicitor to the Society on 3 October 1986: ~"The writer is currently now preparing a comprehensive reply to all matters raised and we take this opportunity to advise that the writer does not consider himself bound by the award on the basis that he was denied natural justice in not being able to present his case before the arbitrator." The following appears in a letter by the Solicitor to the Society on 24 February 1987: "I draw your attention in the first instance to the fact that I did not consider myself bound by an award which was made in my absence, having first informed the Law Society and Bar Association that I would insist on making detailed submissions to Arbitrators..." "I have painfully come to the conclusion based on the series of events that the Fees Arbitration System as contained in the Joint Statement is nothing short of a `big hammer' held above the heads of Solicitors to force them to pay Counsel's fees, under threat of being reported for professional misconduct. "Sincerely I do not wish to form part of such a scheme." The following appears in a letter to the Solicitor by the Discipline Department of the Law Society on 26 March 1987: "In the interim, the New South Wales Bar Association had stated that their Fees Committee and Mr McQuillen would have no objection to you applying to the Arbitrators to reopen the arbitration, provided that you deposited the amount in dispute, namely $8,970 with the Law Society to abide the result of the reopened arbitration. "The Society was informed of the Bar Association's attitude by letter dated 5 March 1987 and I regret my delay in conveying the information to you. However, the Bar Association has asked that the matter be dealt with promptly and I request that you advise me within 10 days of the date of this letter whether the proposals are acceptable. "In my opinion, the Bar Association's proposal is very reasonable and gives you an opportunity to be heard. Your urgent attention to this matter is requested." By letter dated 30 March 1987 to the Society, the Solicitor rejected the Bar Association's proposal. Further correspondence ensued between the Solicitor and the Law Society, in which the Society continued to seek submissions from the Solicitor in relation to his reasons for not paying McQuillen's fees. The following appears in a letter by the Society to the Solicitor on 18 June 1987: "I refer to previous correspondence and advise that the above matter was dealt with by the Council of the Law Society at its meeting on 4 June 1987 when it resolved that: A. The Solicitor's conduct in failing to comply with the Arbitrator's decision as to payment of Counsel's fees constitutes professional misconduct and is deserving of censure and that the parties be advised accordingly." By letter to the Solicitor dated 16 December 1988 the Society drew to his attention the decision in Cassidy v Glover and enclosed a copy of same. The following then appeared: "The effect of the case is to confirm that the obligation of a solicitor to pay counsel's fees is in honour only and that the combination of the Joint Statement by the NSW Bar Association and the Society dated 23 March 1977 and any award made by the Joint Tribunal of Fees constituted thereby is not to create a legally binding debt. "In the above circumstances the Complaints Committee, at its meeting on 15 December 1988, considered that your continuing failure to abide by the award made on 17 July 1986 may constitute professional misconduct. Should such failure continue by the time the Committee convenes for its next meeting on 19 January 1989, it shall determine at such time whether or not to recommend to the Council that a complaint should be made to the Disciplinary Tribunal pursuant to Section 135 of the Legal Profession Act 1987." At a meeting on 2 February 1989 the Council of the Law Society resolved to make a complaint to the Disciplinary Tribunal. From the foregoing summary of the correspondence between the parties from 1985 to 1988, it is clear that the Solicitor has not at any time made any detailed submissions for disputing McQuillen's fees on the grounds of excessiveness or ~otherwise However, we have omitted from the above summary all references to the Solicitor's alleged "relationship" with McQuillen and to the dispute between them as to loans. While the questions as to the relationship and the loans may be irrelevant in relation to the Joint Statement, in fairness to the Solicitor it is necessary to summarise his contentions in relation thereto. Loans The Solicitor contended that one of the main reasons for his non payment of McQuillen's fees was the existence of loans by the Solicitor and by one of the Solicitor's clients to McQuillen. In the Preliminary Submissions by counsel for the Solicitor dated 24 August 1989, reliance was placed on these loans as follows: "It is submitted on the Solicitor's behalf that he had already, to the Law Society's investigator, who had prepared and published his report prior to 24 June 1986, told the Society of the reason for not paying counsel's fees i.e. that the barrister was indebted to him for at least $5,000 plus interest from September 1984. To allege otherwise, is, it is submitted, churlish and simplistic on the Law Society's part." "...(It appears obvious that the barrister did not see fit to acquaint the Arbitrators with the fact that he had borrowed monies off the Solicitor, which he the barrister considered could be set-off against his fees, in the event that they remained unpaid)." "It is submitted therefore that the Solicitor had given a more adequate explanation as to why he shouldn't comply with the award in relation to the fees, the subject of the accounts sent by the barrister, and it follows from this that he cannot be said to be guilty of professional misconduct, serious or otherwise." It seems clear from the documents in Exhibit A, that on 5 July 1984 the Solicitor lent McQuillen five thousand dollars ($5,000) with interest and principal to be repaid by September 30, 1984 (see letter of 5 June 1984 and photocopy cheque of the same date). It also seems clear that on or about 15 October 1984 the Solicitor, on behalf of his client Stephen Goodwin ("Goodwin"), lent McQuillen the further sum of five thousand dollars ($5,000) to be repaid together with interest on 31 December 1984 (see Deed of Loan dated 15 October 1984). By letter dated 13 February 1985 the Solicitor asked McQuillen to repay both loans, which were then overdue. As indicated above in relation to the Fees Arbitration, the accounts from McQuillen to the Solicitor were rendered in April and May 1985 and amounted to $8,970.00 - of which over $6,000 was payable by the Solicitor to McQuillen for work done for the Solicitor personally. On 3 May 1985 McQuillen paid the Solicitor $5,000. It is still disputed between McQuillen and the Solicitor whether this sum was in repayment of the Goodwin (as claimed by McQuillen) or of the Solicitor's debt (as claimed by the Solicitor). By letter dated 7 August 1985 the Solicitor claimed that the Goodwin debt was long overdue and sought repayment of the principal of $5,000 together with accrued interest of $262.40 By letter dated 12 August 1985 McQuillen strongly denied that any further monies were payable to Goodwin as McQuillen's cheque paid on 3 May 1985 fully extinguished the Goodwin loan. The Solicitor's letter to McQuillen dated 16 August 1985 contained this paragraph: "Perhaps you might indicate in the meantime ~by what means will you eventually prove your false allegation contained in your letter regarding the monies still outstanding to Mr Goodwin and whether you considered that interest payable to Mr Goodwin could be waived by the writer as his trustee." By letter dated 21 August 1985 McQuillen agreed to pay "whatever interest is owing in respect of the loan from Goodwin from 22 February 1985 to 3 May 1985". McQuillen then confirmed "that the monies paid on 3 May 1985, namely $5,000 was paid in respect of the Goodwin loan. There has been no acknowledgement from you of receipt of these funds, notwithstanding a request by me for such a receipt." By letter dated 28 August 1985 the Solicitor said that Goodwin would be represented by another solicitor and also said that "in view of the seriousness of your allegations to the effect that I have misappropriated monies which you now allege belong to Mr Goodwin I am now consulting the Ethics Committee of the Law Society and dependent on their advice I will contact you or the Bar Council as circumstances dictate." By letter dated 3 March 1989 in relation to the Goodwin loan the Solicitor demanded that McQuillen pay the sum of $5,000 together with outstanding interest of $469.74. McQuillen's reply of 6 March included this paragraph: "If you would care to pay me $8,970.00 as fees outstanding by your firm to me, I would be prepared to consider the contents of your letter of 3 March 1986." There now intervenes the McGeoch Report, about which there was considerable debate at the hearing concerning its admissibility (T44.7, 177, and 179-184) Pages 18-24 of Report were finally admitted, subject to the Society's objections as to relevance(T184). The McGeoch Report summarises the facts relating to the two loans and the dispute as to which loan was repaid by McQuillen on 3 May 1985. Then follows this paragraph: "In McQuillen's view the Solicitor's loan remains unpaid but as there are substantial counsel fees (approximately $8,000) owed by the Solicitor that there is an appropriate set-off to be made. In the Solicitor's view a number of counsel's memorandum of fees are not bona fide and have been drawn so as to relieve counsel from the obligation of paying a personal loan to the Solicitor. In McQuillen's view that is a preposterous suggestion. The quantum and entitlement to these fees is to be the subject of a Law Society/Bar Association arbitration in the near future."(p.22) The Report then states: "I am unable to resolve the differences between the two and a suitable enquiry would be the only place that a resolution of this dispute will emerge." (pps 22-23) The primary submission of the Solicitor in relation to the McGeoch Report and the loans generally is that as such Report predated the arbitration, was known or should have been known by the Society and possibly the arbitrators and should have been taken into account by them as a reason for the Solicitor not paying the award. In the words of Counsel for the Solicitor: "I appreciate, Madam Chairperson, it is not without difficulty to fit the chronology in. But as I understand what the Solicitor is trying to say, it is that he was under the impression - he made certain submissions. He said `I want to make certain submissions'. He never really got around to it properly, of course. But one of the reasons he did not get round to it, one of the reasons he was miscreant, was the fact that he thought that the Law Society, having had him investigated in the McGeoch Report, were aware that there was this problem, and aware that he was owed money by the barrister - or that one of his clients was owed money by the barrister - and that the barrister himself intended not to repay that money but to offset it against the fees which were outstanding. I think that we are trying to say - clumsily perhaps - is that in a sense this was the real reason that he was not diligent in making these proper written submissions and trying to explain the position vis-a-vis the arbitrators award as he saw it."(T181) Relationship Although the once friendly relationship between the Solicitor and McQuillen has already been mentioned, such relationship can best be summarised by the Solicitor's answer to a question in cross examination as follows: "Q: Then is it incorrect for you to say that he was not to do the mentions for free? A: In the absence of - in view of the relationship we had what I want to say to you is it was not a barrister/solicitor relationship. That barrister/solicitor relationship only started when I got my briefs back but before that he was a friend and I took moneys out of my own pocket to lend it to him because of his financial difficulties and I even took the client's moneys to lend to him. There was no barrister/solicitor relationship as you are trying to put to me." Issues Having considered the facts in relation t~o the fees arbitration, the loans and the relationship between the Solicitor and McQuillen, it is now necessary to look at the legal issues. The 2 central issues are: 1. The validity of the Award; and 2. Whether the failure by the Solicitor to abide by the Award constitutes professional misconduct. Validity of A~ward In the broad sense, this comprehends all the facts and circumstances in relation to the making of the Award. In the narrow sense, the main issue concerns the making of the Award in the absence of the Solicitor. Clause 13(b) of the Joint Statement provides: "The parties may appear on their own behalf or be represented and may call evidence if they wish or, alternatively, the Joint Tribunal on Fees may, if both parties agree, determine the dispute in the absence of the parties and on the basis of such written material and/or submissions (if any) as the parties may wish to put before it." As previously indicated, the Solicitor did not appear before the Joint Tribunal at its meeting on 24 June or on 17 July 1986, or at all. Nor, according to his evidence and submissions, did he "agree" to the dispute being determined in his absence. On the other hand, the Society submits that the Solicitor did so agree or should be deemed to have agreed. The Society submits that as a result of Mr Garling's telephone conversation with the Solicitor on 24 June and of the letter by the Joint Tribunal to the Solicitor of the same date, two compelling inferences can be drawn for the purposes of clause 13(b) of the Joint Statement: 1. that the Solicitor had no intention of appearing personally before the Joint Tribunal, and 2. that the Solicitor accepted the proposition that the Joint Tribunal should proceed by way of written submissions (T208-212 and Supplementary Submissions of Counsel for Complainant at pages 3-5). It is clear from the evidence that both inferences can be drawn. Indeed the Solicitor's belated letter of 29 July 1986 sought further time to lodge submissions. Neither that letter nor any subsequent letter requested the opportunity to appear in person before the Joint Tribunal. It is thus a question of whether the Joint Tribunal acted hastily or otherwise improperly in making its award on 17 July 1986 in the absence of written submissions from the Solicitor by 8 July, is directed by the letter of 24 June. In all the circumstances and having considered the correspondence, as summarised above, the evidence and submissions of the Solicitor, we do not think that the Joint Tribunal acted hastily or improperly. We find that the Solicitor was given every opportunity both before and after the making of the Award to put written submissions before the Joint Tribunal. In this connection, it is significant that the Solicitor has not at any time made written submissions in relation to the fees in dispute even though given ample opportunity to do so over a period of over 3 years. Even as recently as 26 March 1987 the Society informed the Solicitor that the Bar Association and McQuillen would have no objection to the Solicitor applying to the arbitrators to reopen the arbitration on condition that the amount in dispute was deposited with the Society to abide the result. The Solicitor rejected that opportunity out of hand. It is also significant that the Solicitor has not at any stage taken any action to have the Award set aside or declared invalid - which steps would have been open to him had he genuinely believed that the Award was invalid. The possibility of such a step was contemplated by him - see his letter to Mr Garling of 11 September 1986 (referred to above). The illogicality of the Solicitor's approach can be seen clearly by asking whether a solicitor should be able to postpone indefinitely or abort the making of an award by a Joint Tribunal either by non-attendance or by failing to ever make written submissions. Obviously, for the proper functioning of the Joint Tribunal the parties to any dispute can only have their submissions taken into account if they act reasonably and in accordance with any proper, reasonable and responsible directions given by the Joint Tribunal for ensuring that the arbitration is properly conducted. In these circumstances we find that the direction given by the Joint Tribunal on 24 June was reasonable and proper and that the Solicitor was given a reasonable opportunity by letter dated 24 June and received by him on 26 June to put written submissions before the Joint Tribunal by 8 July. We further find that in the absence of receiving any communication from the Solicitor by 17 July, the Joint Tribunal was justified in making its Award in the absence of such communication. However, in any event, this finding apart, the award is binding on the Solicitor until set aside by the relevant Court. He did not attempt to set it aside but he contemplated challenging it in the Supreme Court. Having decided the central issue on validity, that is as to consent, we have no difficulty with the Society's submissions in relation to the jurisdiction of the Disciplinary Tribunal as set out in paragraph "B" of the Society's supplementary submissions. Professional misconduct The other central issue in the case was whether the failure by the Solicitor to abide by the Award constitutes professional misconduct. Both parties appeared to agree that in this case, any professional misconduct found by the Tribunal would be common law professional misconduct and would not come under paragraphs (a), (b) or (c) of the definition contained in Section 123 of the Act. In his Short written Submissions, Counsel for the Society put the proposition thus: "It is submitted that in each case, the contempt amounts to conduct which would be reasonably regarded as disgraceful or dishonourable by (Mr Carver's) professional brethren of good repute and competency: Allinson v General Council of Medical Education & Registration 1894 lQB 750, Lopes LJ. "The above statement of Lopes LJ is accepted as the common law definition of professional misconduct". The particular conduct complained of by the Society, according to its submissions, was contempt both for the fees arbitration system and for the authority of the Society itself. As stated in the Short Submissions: "It is submitted that Mr Carver's continuing failure to comply with the arbitrators' award has two separate and distinct consequences as follows: (a) the continuing failure to comply with the award demonstrates contempt for the fees arbitration system adopted by the Law Society and Bar Association in their Joint Statement dated 12/03/82; (b) the same continuing failure to comply with the award, up to and after the date of the censure of 18/06/87, demonstrates contempt for the standing and authority of the Law Society of NSW." Counsel for the Solicitor denies that the conduct of the Solicitor amounted to contempt. In his written Answer, Counsel for the Solicitor put the following two submissions: "At no stage did Counsel for the Law Society ever put to Mr Carver in the course of two days cross examination that he held the Law Society, its persons or authority in contempt, in his own mind or in any other way." "Without unduly labouring the point, for it is a matter entirely for the Tribunal to decide, it cannot be said to be anything other than a possible inference from Mr Carver's past arbitration behaviour, that he hold the authority and standing of the Law Society of NSW in contempt. It is another question entirely it is submitted as to his faith or otherwise in the fairness or efficacy of the arbitration system outlined i~n the Joint Statement." At the hearing, when the attention of the Solicitor was directed specifically to the consequences of any finding by this Tribunal that the Solicitor's non-compliance with the Award amounted to professional misconduct, the Solicitor continued to maintain that such failure was justified by the invalidity of the Award: "I have always maintained that I did not consider myself bound by the award. If the award stands up and is a valid award it is only then that non-compliance by myself with the terms of the award could ground a complaint by the Law Society against me. I maintain at all times that the award was invalid and I was not bound by it, by virtue of my own humble interpretation of the Joint Statement, which is very clear in its terms, that the award can go ahead in the absence of both parties if they consent. That was never consented to. I still maintain that the award is an invalid award." A member of this Tribunal the~n put the following question: "Q. You've answered my question, that you appreciated that you have taken a stand on this issue which if you are proved to be wrong is of the utmost seriousness to your future professional standing, and you are aware of that position. "But it appears to me that you've taken an interpretation of the Counsel's fees joint statement and based your non-payment on that. But underlying it is there a very deep feeling you have that you shoul d not be required to pay in any event. "I'm putting to you that your own judgment should not be clouded in a matter of such enormous importance to you by any dispute, feeling of being wrongly or badly done by, where the consequences of your proving to be wrong are very serious indeed. "I'm not doing more than draw that to your attention." "A. I appreciate that." (T186-187). Thus it is clear that the Solicitor still continues to refuse to comply with the award, because he considers it invalid notwithstanding the consequences if his interpretation of the Joint Statement is wrong. This refusal goes even further. The Solicitor conceded at the hearing that some part of McQuillen's fees were properly payable to him. However he has not paid, even up to now, any part of those fees: "I dare say if I am faced with the account now, without any prior consultation with Mr McQuillen then the only fair thing would have to be that I try to forget the relationship we had and just look at what is a fair thing in the circumstances. "In order to arrive at a figure that I might ow~e Mr McQuillen I would have to look at each matter individually. But I would still owe him some money. I concede that. I still owe him some money. But I think on the way through I think we checked this on the last occasion and I think I went through the matters. I can't remember exactly but I think I did go through the matters. Just to say in all fairness that I will pay him some money if that is what is has to be done, I would not expect him to have represented me for no fee." In these circumstances, it is difficult to say that the Solicitor exhibited intentionally deliberate contempt for the Joint Tribunal or the Society by his refusal to abide by its award. He was clearly motivated by his feeling that the award was invalid, that McQuillen owed him money and that in view of the past relationship between himself and McQuillen some or all of the fees should never have been rendered. However, the Solicitor's continuing failure to abide by the Award constitutes at the very least a grave error of judgment. He should have appreciated the seriousness of his position, not later than the censure by the Society on 4 June 1987. As he readily admitted, he should have tested the validity of the Award long before now by application to an appropriate court: "With hindsight perhaps I should approach the Supreme Court to set aside that award as an invalid award. A lot of things should have been done in hindsight that were not done." (T187) He should have paid such part of the fees as were not in dispute. He should have obtained proper and competent professional advice. At the very least he should have accepted the offer of the Bar Association on 26 March 1987 to apply to reopen the Arbitration. The Solicitor did none of these things. Thus while the continuing failure of the Solicitor to comply with the Award for nearly four (4) years, since 17 July 1986, may not constitute a deliberate and intentional expression of contempt for the Joint Statement and of the Law Society, it appears to us to constitute a reckless indifference to, and disregard for the authority and importance of the Joint Statement and of the Law Society. A solicitor in good standing would not fail for some four (4) years to comply with a Joint Statement by his Society. Nor would he fail to comply for some three (3) years with a censure imposed by his Society. Thus, once again, it is the Solicitor's failure to appreciate the consequences of his inaction that constitutes disgraceful and dishonourable conduct and therefore professional misconduct. A solicitor should not be able to sit back for some four (4) years and ignore important statements by and communications from his Society - particularly where the consequences of such conduct had been clearly brought to his attention over a long period of time. In all the circumstances we find that the Solicitor's failure to comply with the Award since at least 18 June 1987 constitutes professional misconduct. Order As above indicated the nature of the Solicitor's professional misconduct constitutes a sin of omission rather than a sin of commission. No question of the protection of the public arises, such as to justify the cancellation of the Solicitor's practising certificate, although ignorance of the law and of the consequences of his own inactivity must be regarded very seriously. In all the circumstances and pursuant to Section 163(1)(d) a fine would appear to be the proper and appropriate order. The Tribunal therefore proposes to order that the Solicitor be fined the sum of $2,000.00. The Tribunal therefore orders as follows: 1. Pursuant to Section 163(1)(d) that the Solicitor pay a fine of $2,000.00. 2. That the said sum be paid within one month from the date of this order and that thereafter the Solicitor be suspended from practice until the said fine be paid. 3. Pursuant to Section 163(6)(b) that the costs of the Complainant of and incidental to the complaint as between solicitor and client be paid by the Solicitor to the Law Society of New South Wales Dated this 23 day of August 1990 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.