The Legal Services Tribunal of New South Wales CITATION : George Peter Duckett White [1994] NSWLST 24 PARTIES : George Peter Duckett White FILE NUMBER(S) : of 1993 CORAM: Ms A Plotke (Presiding Member) - Mr G B Molloy - Mr P. Wolfe CATCHWORDS: Competence and diligence :- Unsatisfactory professional conduct LEGISLATION CITED: Legal Profession Act 1987 CASES CITED: In the matter of Ian Gordon Dun (1993 3 LPDR 5). ; Malfanti v Legal Profession Disciplinary Tribunal (1993) 4 LPDR DATES OF HEARING: 28 October, 1994 DATE OF JUDGMENT: 12/21/1994 LEGAL REPRESENTATIVES: Mr D. Hipsley (instructed by Mr G.J. Still) for the Law Society of New South Wales. Mr R.S. Cuddy of Messrs Stewart Cuddy and Mockler for the Solicitor. JUDGMENT: A false date was inserted into a Contract for Sale of Land and a Stamp Duty Fine was thereby avoided. The Society alleged that the solicitor intended to defraud the Office of State Revenue. The chronology of events prima facie supported that allegation. The Tribunal was of the view that the solicitor did not deliberately engage in any conduct with intent to defraud the revenue. The Tribunal was not prepared to find that the solicitor's conduct amounted to professional misconduct. The solicitor failed to find out the correct date of exchange and insert that date in the contract; he thereby failed to exercise a standard of competence and diligence that a client might expect. The solicitor's record was unblemished and his conduct in this instance was an aberration. The solicitor was reprimanded, fined $1,000.00 and ordered to pay the Society's costs. The solicitor inserted or caused to be inserted a date on a Contract for the Sale of Land which was not the date of its exchange and which had the effect of the Office of State Revenue stamping the Contract without any fine or penalty in circumstances where, had the Contract been dated as at the date of exchange, a fine or penalty would have been payable. The Society alleges that by so dating the Contract or by causing it to be so dated the solicitor did so with the intention of avoiding the payment of penalty stamp duty and thereby defrauding the Office of State Revenue of penalties which would otherwise have been payable for failure to pay the stamp duty on the contract within two months of the date of exchange. Prima facie, the chronology of events would tend to support that conclusion. Chronology 4/9/94: The solicitor received instructions from his client Mrs Julia Trubridge to act for her on the purchase of an interest in a company title property. 30/10/92: Contracts are exchanged. Original contract held by solicitor not dated due to oversight at exchange. Solicitor informs Mrs Trubridge that a penalty is payable for late payment of stamp duty. 4/11/92: Solicitor advises Mrs Trubridge by letter that the stamp duty payable on the Agreement for Sale "amounts to $5,144.00 and that it is necessary to pay this amount within two (2) months from the date of exchange and in any event by settlement." 22/12/92: Solicitor first becomes aware, as a matter of conscious awareness, that the contract is not dated. He again asks Mrs Trubridge for the stamp duty and informs her that a penalty would be payable for late payment. 15/1/93: This was the date fixed in the contract for completion. 19/1/93: Solicitor again requests Mrs Trubridge to let him have the stamp duty and that a penalty would be imposed for late payment. 21/1/93: Contract is completed. 27/1/93: Mrs Trubridge pays the solicitor the stamp duty. 19/2/93: Solicitor personally attends at the Stamp Duties Office and pays the duty on the contract. Contract as presented to Stamp Duties Office shows date 24/12/92. The above chronology was the chronology as agreed between the parties at the hearing subject to the fact that the solicitor volunteered, in oral evidence, that it was he who attended at the Stamp Duties Office and paid the stamp duty. A number of observations can be made about the above:1. There is no doubt that the client of the solicitor was aware and fully aware, at all times, that she was obliged to pay the stamp duty within the two month period. Although it is true to observe that the advice by the solicitor to the client on 4/11/92 that stamp duty was payable "within two (2) months from the date of exchange and in any event by settlement" was misleading in that the due date for settlement was 15/1/93 and stamp duty was payable no later than 30/12/92 if a fine or penalty was to be avoided, the plain fact is that the client simply refused to pay the stamp duty within the two month period. At all times she was well aware that, in order to avoid a fine or penalty the stamp duty should be paid within that period, and no satisfactory explanation was volunteered by Mrs Trubridge for her extraordinary failure to pay the stamp duty on the contract until nearly three months had expired from the date of exchange and well after the time fixed by the contract for completion.2. The solicitor made an effort (although perhaps with the benefit of hindsight it might not be regarded as sufficient) to obtain the funds from his client so that stamp duty could be paid within the appropriate time. Solicitor's explanation There is no doubt at the date of exchange of contracts the counterpart contract handed to the solicitor for the vendor had entered upon it the date of exchange as 30 October, 1992. The original contract held by the solicitor appears not to have been dated on exchange due to a mutual oversight. The original contract, although subsequently stamped, was not available to the Tribunal. The solicitor said that he did not have it, Mrs Trubridge said that she did not have it and it was not held by The Consumer Claims Tribunal. There had been a complaint made by the client to The Consumer Claims Tribunal, the original contract had been produced, voluntarily, by the solicitor to that Tribunal, the matter had been subject to a determination but the whereabouts of the original contract could not be ascertained. There was evidence before us that the solicitor had admitted to the Referee at The Consumer Claims Tribunal that he, personally, had dated the contract 24 December, 1992. That evidence came from Mr Patrick Lynch, the Referee who heard the claim and counter claim. There was also evidence by Mrs Trubridge and Mr Maxwell Burgess, both using identical words, to the effect that the solicitor said to the Referee "I dated that contract 24 December, 1992 at the request of the Office of State Revenue". It is of interest that those words and that evidence was not given by the Referee. In the letter from Mr Burgess to the Law Society, which letter was attached to the formal Complaint, Mr Burgess stated: "Mr White stated to The Consumer Claims Tribunal that the contract that he had received on exchange which he agreed occurred on 30 October, 1992, was not dated at that time and he put in another date 24 December, 1992 at the request of the Office of State Revenue when stamp duty was paid on 27 January, 1993." That statement, it seems to us, is capable of two different interpretations. It could be read as if the solicitor inserted 24 December, 1992 "at the request of the Office of State Revenue". In other words, it was the Office of State Revenue who requested the solicitor to insert that particular date. That interpretation is significantly different from Mrs Trubridge and Mr Burgess stating in their respective Statutory Declarations that the solicitor said:"I dated that contract 24 December, 1992 at the request of the Office of State Revenue." In other words, the alternate interpretation could be that the solicitor dated the contract at the request of the Office of State Revenue, not that the Office of State Revenue requested that he insert the specific date 24 December, 1992. The significance of this will become apparent. Both Mrs Trubridge and Mr Burgess stated that the solicitor told the Consumer Claims Referee:"I chose this date of 24 December, 1992 so as to help my client from paying a stamp duty penalty". Again it is significant that that evidence was not led by the Referee. In the absence of any corroborative evidence from the Referee and in the light of the solicitor's oral evidence before this Tribunal, we reject that portion of the evidence of Mrs Trubridge and Mr Burgess. The solicitor, in oral evidence, stated that on the 22nd December, 1992 he first became aware that the contract had not been dated because, apparently, he looked at the contract and asked Mrs Trubridge for the stamp duty because he wanted to advise her that he was going to be away for three weeks over the Christmas period. He explained his lack of attention to the date of the contract by stating that he was more concerned at getting through his work, advising Mrs Trubridge that he was going to be away and advising her of the need to pay the stamp duty. He was aware that stamp duty was required to be paid by the 30 December, that he was going away on the 26 December but he did not give any thought on 22 December with regard to the dating of the contract because, effectively, his mind was on telling Mrs Trubridge that he would not be in Sydney and he would not be able to attend to the matter until early January. He said he did not give any further thought to the payment of stamp duty at that time because Mrs Trubridge was apparently very distressed, having had a fight with her family and that, as it appeared to the solicitor, she did not seem to be very concerned about the purchase or the stamp duty and he, the solicitor, was just intent on advising her that he would not be in Sydney until early January. The solicitor personally had exchanged the contract and he personally took it in to the Stamp Duties Office and he personally stamped it. He was unable to explain why it was that the contract had on it the date 24 December, 1992. He said that he had not inspected the contract, he just lodged the forms for stamping, his secretary usually completing the lodgment forms. In regard to who dated the contract the solicitor stated that he did not know who dated it but, effectively, he accepted that it was either he or somebody employed by him in his office. Indeed, the solicitor has never denied responsibility for the contract being dated 24 December, 1992. What he says is that either he or somebody on his staff dated it, he does not know why 24 December was selected as the date, it did not cross his mind that that date would amount to a fraud, he denied that he dated the contract the specific date 24 December, 1992 "at the request of the Office of State Revenue" but he accepts that it was he who personally lodged the contract for stamping. The solicitor says that the first time he noticed that the contract was dated on a date other than the correct date was at The Consumer Claims Tribunal but in the absence of the original contract he could not say definitely whether or not it was he, personally, who inserted the date "24 December, 1992". In his oral evidence and in his statutory declaration the solicitor denied that the insertion of the date in the contract was "in an attempt to avoid payment of penalty stamp duty" or that the date was inserted intentionally or knowingly "to indicate that exchange of contracts had taken place on 24 December, 1992" The solicitor is a person of great experience. He has been in practice since 1967 and about 50% of his practice involves conveyancing work. In all that time he has not come across a circumstance where a contract held by him was not dated. He comes across in the witness box as a person of reasonable intensity but upright and honest. His demeanour indicated, quite clearly, that he was a person upon whom one could rely, one who would not tell a lie deliberately and one who was an upright member of the legal profession. That impression, a quite clear impression formed by the Tribunal, is supported by various quite strong Statutory Declarations by fellow practitioners and others who all speak very highly of him. Although, prima facie, the chronology is consistent with an attempt to defraud the State revenue, the Tribunal is of the view, having considered all the evidence, that the solicitor did not deliberately engage in a deception or deliberately engage in any activity that would be regarded as improper. The solicitor's evidence was given clearly, fearlessly and honestly. We are of the view that he did not deliberately engage in any conduct with any intent to defraud the revenue. The Tribunal has found this a difficult case because the factual circumstances appeared to be against the solicitor. The Society has submitted that the solicitor is guilty of professional misconduct. This Tribunal carefully examined the principles behind making a finding of professional misconduct against a legal practitioner in the matter of Ian Gordon Dun (1993 3 LPDR 5). There is no question that at common law professional misconduct denotes conduct that is serious, grave and weighty. An affirmative finding may result in a practitioner being struck off the Roll. The seriousness of a finding of professional misconduct is recognised, not only by the consequences that flow from such a finding, but the standard of proof that is required. There must be evidence that is precise and cogent evidence that survives careful scrutiny. (See Dun at 7). The Court of Appeal in Malfanti v Legal Profession Disciplinary Tribunal (1993) 4 LPDR 17 referred, at page 21 (per Clarke JA) to the "gravity of conduct which constitutes professional misconduct". In the circumstances of this particular case, and having regard to the very clear impression that we have formed of the solicitor, his stout and robust denials of any fraudulent or improper intent, we are not prepared to find that this solicitor's conduct in this particular instance amounts to professional misconduct. Unsatisfactory professional conduct Where an allegation of professional misconduct is made against a legal practitioner and such allegation is not proved, this Tribunal has power to determine whether or not the solicitor's conduct is of a lesser professionally inappropriate quality so as to amount to unsatisfactory professional conduct. This type of conduct "includes conduct (whether consisting of an act or omission) occurring in connection with the practice of law that falls short of the standard of competence and diligence that a member of the public is entitled to expect from a reasonably competent legal practitioner." (Legal Profession Act, Section 127 (formerly Section 124). There is no doubt that the proper course or action that the solicitor should have followed, once he was aware that the original contract that he held was undated, was to find out the true date of the contract and insert the true date thereon. This could be done by consulting his diary or by telephoning the legal practitioner for the vendor. The solicitor in this case did neither of those things - on the contrary, he did not appear to give the matter any thought at all, being only concerned in advising his client that she should pay the stamp duty and that he was going away on holidays and would not be back until early January. Although it is true that the solicitor, in many years of practice, has not had the experience of finding himself holding an undated contract after exchange, common sense should have told him that the contract should be dated, that it should be dated the correct date and that he should find out and insert the correct date on it. That common sense approach did not occur to the solicitor and, in our view, it should have and he allowed his approach to this matter to be determined by other matters, including his own personal holiday over the Christmas period and the uncooperative attitude displayed by his client. The practice of law is not easy. It is not unusual for legal practitioners to act for uncooperative difficult clients. That does not detract from the standard of competence and diligence that that client, as a member of the public, is entitled to expect from the legal practitioner. That does not mean, of course, that the legal practitioner must continue to act for an uncooperative client, but if he/she does then he/she must exercise a standard of competence and diligence that the client is entitled to expect. In our view the solicitor failed that test. Consequently, there must be a finding of unsatisfactory professional conduct in the failure of the solicitor to take proper steps to date the contract with the correct date of its exchange and the ultimate insertion by him or by someone in his employ of a date that was not the true date of exchange. Solicitor's practice history We have averred above to the solicitor having been in practice since 1967. His practice in the initial stages was as an employed solicitor and subsequently as a sole practitioner, then with a partner and more recently reverting to that of a sole practitioner. His practice is of a general nature and there is no doubt, in our view, that he is well liked and highly regarded by his peers. He has an unblemished record. He has been a member and at various times an office holder in a number of organisations, has provided free legal aid or advice to members of the public through the Wayside Chapel at Kings Cross and through legal aid projects conducted by the Eastern Suburbs Law Society. He is a person of high moral standards and is a person who has been clearly not only very upset by these proceedings but also professionally embarrassed. We have little doubt that the solicitor's conduct is an aberration, that he did not think through what he was doing, did not have any intent to do anything that was wrong but failed to properly direct his mind to his actions and their consequences. It is difficult to fashion a suitable order in circumstances such as this where the solicitor's history shows a positive honesty and where the conduct, the subject of the Complaint, is clearly an aberration. The Legal Profession Act permits the Tribunal to make a number of orders, most of which are quite unsuited to this particular matter. The view we have formed, however, is that the solicitor should be reprimanded and be ordered to pay a fine of $1,000.00 and the costs of the Law Society. Orders The Tribunal makes the following Orders:1. The solicitor be and is hereby reprimanded.2. The solicitor pay a fine of $1,000.00 within a period of sixty (60) days from the date of this Order.3. The solicitor be suspended from practice at the expiration of the said period of sixty (60) days if the said fine shall not have been paid until it has been paid.4. The solicitor pay the costs of the Law Society, such costs to be assessed as if assessed by a Supreme Court Costs Assessor pursuant to the provisions of Part 11 Legal Profession Act.5. If agreement cannot be reached between the solicitor and the Law Society as to the amount of such costs either party shall have liberty to apply to the Tribunal to determine the amount of those costs. 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.