Administrative Decisions Tribunal New South Wales Medium Neutral Citation: Council of the Law Society of NSW v Ly [2011] NSWADT 210 Hearing dates: 18 July 2011 Decision date: 18 July 2011 Jurisdiction: Legal Services Division Before: Deputy President Patten N Isenberg, Judicial Member E Hayes, Non Judicial Member Decision: 1) The respondent is found guilty of professional misconduct. 2) The respondent is publicly reprimanded. 3) The respondent is fined the sum of $6,000. 4) The respondent is to pay the costs of the applicant and of the Legal Services Commissioner. 5) In the event the fine remains unpaid after a period of 3 months the applicant shall be entitled to consider whether it is appropriate to suspend the respondent from practice. Legislation Cited: Legal Profession Act 2004 Cases Cited: Fraser v The Law Society, [1992] NSWLST6a Category: Principal judgment Parties: Council of the Law Society of NSW (Applicant) Thanh Ly (Respondent) Representation: P Boyd (Applicant) T A Williams (Respondent) L Muston (Legal Services Commissioner) File Number(s): 112001 reasons for decision 1DEPUTY PRESIDENT: We have found ourselves in a position to give our decision this afternoon. 2By application filed on 7 January 2011 the applicant seeks a finding that the respondent has engaged in professional misconduct, that his name be removed from the roll and that he pay the applicant's costs. Particulars were provided as follows. (1) The solicitor falsely witnessed Mr Rodrigues' signature to a number of documents including mortgage number AD778708J. (2) The solicitor falsely certified the sighting of the originals of Mr Rodrigues' identification. (3) The solicitor engaged in unethical conduct by falsely witnessing the signing of mortgage documents with respect to separate and distinct transactions. 3What the parties seem to agree as the facts of the matter are conveniently set out in the letter of the respondent's solicitor Mr T A Williams to the Law Society dated 4 November 2008. The background is that the respondent was acquainted with two mortgage brokers, Sam Heraki and Shadi Heraki. Considerable legal work was referred to him by Shadi Heraki. 4Mr Williams goes on to state the facts regarding the Rodrigues matter as follows: In early November 2007 Sam Heraki who was the principal of a company known as Lendwide Finance Pty Limited informed Mr Ly that he was to refer a client by the name of Michael Rodrigues who was to obtain a mortgage advance from Mango Media Pty Limited in the sum of $100,000 to be secured by a second mortgage over a property at 13 Omega Place Greenacre. Mr Ly did not meet Mr Rodrigues. 5On or about 8 November 2007, Sam Heraki contacted Mr Ly. Mr Heraki said that he had received the mortgage documents and would take them to Mr Ly's home at Strathfield. Mr Heraki did in fact attend Mr Ly's home at approximately 10pm that evening. Mr Ly saw that the mortgage documents had already been signed by the mortgagor. At that stage he had not even met the client. 6Mr Ly asked Mr Heraki where the client was. Mr Heraki stated that Mr Rodrigues had not been able to attend. Mr Heraki asked Mr Ly to witness the signatures of Mr Rodrigues on the documents. Mr Ly explained to Mr Heraki that it would be necessary for Mr Ly to give proper advice to the client and further that Mr Rodrigues would have to be personally present so that Mr Ly could see the document signed before he could witness it. Mr Heraki exerted considerable pressure explaining that the matter was urgent. Mr Heraki then telephoned a person who Mr Ly believed to be Mr Rodrigues and handed the telephone to Mr Ly. Mr Ly asked the person to whom he was speaking whether he was Michael Rodrigues and received an affirmative answer. 7Mr Ly further explained that it was necessary for him to be physically with him and see the signing of the mortgage in order that he might see it all and he might witness it and in addition it was necessary for him to see Mr Rodrigues personally to explain the nature and effect of the documents. It is in fact the practice of Mr Ly and has been throughout his time in practice that he requires proof of identity of signatories to documents whenever he is asked to witness the execution of those documents by that person. 8Mr Rodrigues explained that it was not possible for him to see Mr Ly and it was too late to make any other arrangements because he needed the money by 9 November 2007. He, Mr Rodrigues, asked Mr Ly to witness his signature so that the transaction could be completed the following day. Mr Ly explained to Mr Rodrigues the nature and effect of the mortgage documents and informed Mr Rodrigues that it was very important that Mr Rodrigues understood precisely what he was entering into in relation to the transaction. 9After Mr Ly had explained the nature and effect of the mortgage documents Mr Rodrigues confirmed that he understood and he did wish to proceed and pressed Mr Ly to witness his execution of the mortgages. Mr Ly reluctantly and foolishly agreed to do so to accommodate Mr Rodrigues and Mr Heraki. After signing the documents Mr Ly returned them to Mr Heraki as requested by him so that they could be returned to the solicitor acting for the mortgagee. That effectively was the extent and end of Mr Ly's involvement in the matter. He rendered no account and received no benefit in relation to the matter." 10The documents witnessed by the respondent included a mortgage in which he had attested, "I certify that the person signing opposite with whom I am personally acquainted or as to whose identity I am otherwise satisfied signed this instrument in my presence." 11It is to be inferred from other material before us that the signatures of Mr Rodrigues on the mortgage were forged as it was on a Statutory Declaration which the respondent declared had been subscribed and declared before him. It is also to be inferred that the respondent by his conduct lent himself to fraudulent transactions undertaken by Mr Sam Heraki. There is however no reason to infer that the respondent himself was a party to any fraudulent conduct. 12Two other transactions were relied upon by the applicant. Those transactions only came to light when the applicant himself disclosed them. They relate respectively to Mr George Heraki and his wife Colleen and to Mr Ishak Heraki and his wife Denise. In each case at Mr Sam Heraki's importuning the respondent witnessed signatures on mortgage documents presented to him without seeing or speaking to the signatories. Although apparently litigation subsequently arose out of the transactions it is impossible for us to conclude on the evidence before us one way or the other whether the signatures which the respondent purported to witness were forged. 13The conduct referred to plainly constitutes professional misconduct and we have no hesitation in finding that it was. When the matter was called on for hearing today the parties informed us that an instrument under s 564 of the Legal Profession Act had been signed by the applicant, the respondent and the Legal Services Commissioner. By that instrument the respondent made a number of formal submissions and in para 3 the applicant and the respondent joined in seeking from the Tribunal the following orders. (1) The respondent is guilty of professional misconduct as set out in grounds 1, 2, 3 and 4 of the application. (2) The respondent is publicly reprimanded. (3) The respondent is fined in such sum as the Tribunal regards as appropriate. (4) The respondent is to pay the costs of the applicant. 14Before considering whether we should make orders in accordance with the s 564 instrument it is necessary to refer to evidence in the respondent's case. He was admitted to practise as a solicitor on 30 May 2003. He is presently an undischarged bankrupt and practises at Liverpool mainly if not exclusively in criminal and Local Court work. He employs one solicitor. Since the matters which are before us came to light his relationship with both Sam and Shadi Heraki has terminated and he has completed all four modules of the Law Cover Risk Management course. 15It is in the respondent's favour that he now recognises the very serious nature of the misconduct in which he was involved. We accept that he is genuinely contrite and is unlikely to offend in such a way again. The matters before us we also accept have had very serious repercussions on the respondent both financially and personally. 16We also take into account affidavits filed on the respondent's behalf which depose to his contrition and the impact upon him of the matters complained of. We note however that our role is protective of the community and not punitive. Originally, as indicated, the Law Society sought an order that the respondent's name be removed from the roll. It has of course changed that attitude by signing the s 564 instrument in light of material subsequently provided to it by the respondent. In fact no authority referred to us (we think rather surprisingly) has resulted in a practitioner being removed from the roll in circumstances similar to those now under consideration. 17In Fraser v The Law Society, [1992] NSWLST6a decision of the Court of Appeal published on 7 August 1992, a solicitor had falsely certified that he had explained mortgage documents to mortgagors knowing that the certificate would be relied upon by the mortgagee. He compounded this misconduct by subsequently assuring the mortgagee's solicitor that he had signed the certificate and in effect that he had given the appropriate explanation. The Legal Profession Disciplinary Tribunal removed Mr Fraser from the roll and it was an appeal from that order which came before the Court of Appeal. In the course of his reasons Kirby P said, "The duty of this court is to protect the public, to uphold the standards of the legal profession and to mark the approbation of the conduct of legal practitioners who engage in fraud of whatever kind. Such duty raises legal and social considerations somewhat different from fraud and insurance claims. Insureds come from all backgrounds. Solicitors enjoy special privileges and submit to special duties as a consequence, however fraud clearly manifests itself in a number of different ways. The fraud to which the appellant admitted in this case was potentially serious but in the event it had serious consequences only for the appellant himself. I do not believe that fraud as such admitted or proved requires in every case without more the removal of the name of a solicitor from the roll. It is necessary to examine in each case the nature of the fraud involved. Many acts of fraud will indeed require removal from the roll. In other cases a less dramatic determination will be appropriate." Later his Honour said, "As a result of the foregoing analysis I have concluded that the proved and admitted behaviour of the appellant was professional misconduct but I do not believe that it requires the removal of his name from the roll. He should be afforded another chance. It is inconceivable that he would ever err in the same way again. I take into account in coming to this conclusion the appellant's age, his experience as a solicitor today, the attitude of helpfulness which he appears to display to his clients and the good opinion expressed of him by a fellow practitioner and a Member of Parliament in statements placed before the Court. It is also impossible to ignore the fact that by operation of the Tribunal's order the appellant has been disqualified from practise as a solicitor for more than seven months." Handley JA , the second member of the Court, concluded his reasons with this paragraph, "I am satisfied from this review of the earlier decisions that if this Court were now to allow this appeal it would not be departing from prior authority and would not be sanctioning any lowering of the standards which its predecessors had required from the solicitors of this Court. In my opinion however the Tribunal acted correctly on the material before it in striking the appellant from the rolls. A solicitor who commits fraud without knowing that he has done so in my opinion is not a fit and proper person to remain on the roll. That situation has now changed." I believe that this Court would now be justified in concluding that this appellant will never again give a false certificate. So far as the evidence reveals and there is nothing to suggest otherwise this was an isolated departure from proper professional standards. The appellant is still young with limited experience and as a result of these proceedings he will be both a sadder and a wiser man. He has now been off the roll of solicitors for over seven months. In my opinion therefore the requirements of this disciplinary and protective jurisdiction will be fully met if this Court were to make the orders proposed by President Kirby." The third member of the court, Cripps JA, said at the conclusion of his judgment, "The strength of the Society's case against Mr Fraser is that it not only did he furnish a certificate which he knew to be false and which he knew was intended to be relied upon by the mortgagee but that he did not take the opportunity to disabuse Mr Morton when he could have done so. There can be no question of that conduct amounted to professional misconduct. Furthermore the circumstances that he did not charge for the certificate is I think irrelevant. I've come to the conclusion that the appellant recognises the extent and gravity of his conduct and that it fell far short of the standards required to be observed by practising solicitors. In formulating the order I place on record that I paid no regard to any claim of personal hardship and I note that it has not been put that Mr Fraser's conduct was a result the pressure of work. The essential function of the Court is not to decide an appropriate punishment, it is to determine what order should be made bearing in mind the evident purpose of the legislative provisions, that is to protect members of the public by not exposing them to persons who are unfit to practise as solicitors and to promote and maintain public confidence in the legal system. Section 163 of the Legal Profession Act provides that if the Tribunal is satisfied that a legal practitioner is guilty of professional misconduct it may order the practitioner's practising certificate to be cancelled or suspended order the practitioner's name be removed from the roll of solicitors, order that the practitioner pay a fine, or a combination of any of those things. Notwithstanding that a fine is ordinarily seen in the nature of a punishment it must be assumed that the imposition of a fine is regarded by the legislature as an appropriate means whereby public confidence in the legal system can be maintained. I do not think Mr Fraser is unfit to practise by reason of his proved misconduct. In my opinion the imposition of a fine will meet the demands of justice in this case." 18Having regard to the statements of principal to be derived from Fraser and to the decisions in comparable cases referred to us since Fraser, we are satisfied that serious as the respondent's conduct was it does not necessarily require his removal from the roll. Although some of the factors in Fraser are not present here such as a period of suspension we believe we are not found by authority to remove the respondent from the roll but are entitled to consider whether he is not a fit and proper person to remain in practice. We should also we think give considerable weight to the fact that both the Law Society and the Legal Services Commissioner, the bodies charged with administering the Legal Profession Act, no longer seek a removal of his name from the roll and consent to orders of significantly less significance. 19In the circumstances we are satisfied that the respondent through his contrition, his co-operation with the authorities and his further education has established that he is now a fit and proper person to practise as a solicitor. We are prepared to accept that the appropriate orders are a public reprimand, a fine, and an order that the respondent pay the costs of the proceedings. 20As to the quantum of the fine the respondent is currently bankrupt and according to his evidence will need to borrow the amount of any fine from relatives. Nonetheless we do not think that a relatively nominal fine as suggested by Mr Williams is appropriate in respect of such egregious conduct. We think a fine of $6,000 would be appropriate. We make these orders. 1) The respondent is found guilty of professional misconduct. 2) The respondent is publicly reprimanded. 3) The respondent is fined the sum of $6,000. 4) The respondent is to pay the costs of the applicant and of the Legal Services Commissioner. 5) In the event the fine remains unpaid after a period of 3 months the applicant shall be entitled to consider whether it is appropriate to suspend the respondent from practice. ********** 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. Decision last updated: 05 September 2011