Administrative Decisions Tribunal New South Wales Medium Neutral Citation: Council of the Law Society of NSW v Rebecca Lea Hutton (aka Rebecca Lea Taylor) [2012] NSWADT 48 Decision date: 03 February 2012 Jurisdiction: Legal Services Division Before: The Hon G Mullane (Judicial Member) Ms S Hale (Judicial Member) Mr C Bennett (Non-Judicial Member) Decision: 1 Any law practice is prohibited from employing or paying the Respondent in connection with the legal practice engaged in by the law practice, without approval under Section 17 of the Legal Profession Act 2004 . 2 The Respondent must pay the Applicant's costs in these proceedings in the sum of $2,000.00 on or before 3 August 2013. Catchwords: Law Practice - Lay Associate - Disciplinary proceedings - Fraud on the law practice - Order that no law practice employ or pay the lay associate. Legislation Cited: Legal Profession Act 2004 Category: Principal judgment Parties: The Council of the Law Society of NSW (Applicant) Rebecca Lea Hutton (aka Rebecca Lea Taylor) (Respondent) Representation: Council of the Law Society of NSW (Applicant) No Appearance for the Respondent File Number(s): 112031 LEGAL SERVICES DIVISION The Hon G Mullane (Judicial Member), Ms S Hale (Judicial Member), Mr C Bennett (Non-Judicial Member) REASONS FOR DECISION INTRODUCTION 1This was a hearing of proceedings against the Respondent, who had been employed as a Secretary and Para-legal in a law practice. The proceedings were commenced by the Law Society of NSW by its Application filed 11 October 2011. ORDERS SOUGHT 2The Law Society sought the following orders: (1)An Order pursuant to Section 18(2) of the Legal Profession Act 2004 prohibiting any law practice from employing or paying the Respondent in connection with the legal practice engaged in by the law practice, without approval under Section 17 of the Act. (2)An Order pursuant to Section 20(3) of the Legal Profession Act 2004 that the Respondent pay the Applicant's costs of these proceedings. (3)Such further or other orders as the Tribunal deems fit. GROUNDS 3The Grounds of the Application are: Ground 1: The Respondent is not a fit and proper person to be employed or paid in connection with any legal practice; and/or Ground 2: The Respondent has been guilty of conduct that, if the person were an Australian legal practitioner, would have constituted unsatisfactory professional or professional misconduct. PARTICULARS IN RELATION TO THE GROUNDS 4They are: In these particulars: the Lay Associate means the respondent, Rebecca Lea Hutton also known as Rebecca Lea Taylor; the Practice means the law practice APJ Law, of Armidale NSW; Peter Pardy means Peter Cecil Pardy, Principal of the Practice; the sole bank account is the Lay Associate's bank account #63463381 at the Guyra branch of the New England Credit Union, now known as Community Mutual Group, New England; the joint bank account is bank account #66535781 operated by the Lay Associate and her partner Mr D Taylor at the Guyra branch of the New England Credit Union, now known as Community Mutual Group, New England; the home loan account is bank account #665357L33.2 operated by the Lay Associate and her partner Mr D Taylor at the Guyra branch of the New England Credit Union, now known as Community Mutual Group, New England; the Act means the Legal Profession Act 2004 NSW; the Crimes Act means the Crimes Act 1900 NSW; At all relevant times, section 300(1) of the Crimes Act 1900 NSW provided: 300 Making or using false instruments (1) person who makes a false instrument, with the intention that he or she, or another person, will use it to induce another person: (a) to accept the instrument as genuine, and (b) because of that acceptance, to do or not do some act to that other person's, or to another person's, prejudice, is liable to imprisonment for 10 years. (2) A person who uses an instrument which is, and which the person knows to be, false, with the intention of inducing another person: (a) to accept the instrument as genuine, and (b) because of that acceptance, to do or not do some act to that other person's, or to another person's, prejudice, is liable to imprisonment for 10 years. On 4 May 2011 the Lay Associate was convicted of specified charges associated with her employment at the Practice. These charges included: 1. Matter 6241.9 G & J Wild Certificate, of Conviction pages 1, 14 a. On or before 6 February 2007 in breach of section 300(1) of the Crimes Act, the Lay Associate made a false instrument being National Australia Bank Cheque #364088 payable to R L Taylor for the amount of $1200.43 by endorsing the rear of the cheque to read 'Please pay R L Taylor' and forged the signature of Peter Pardy to make the endorsement look legitimate. b. On or about 6 February 2007 in breach of section 300(2) of the Crimes Act the Lay Associate used the cheque by presenting it as her own and depositing it into her sole bank account. c. For the above offences the Lay Associate was convicted and sentenced in Gunnedah Local Court to a term of imprisonment. Execution of the sentence was suspended from 4 May 2011. The court directed that the Lay Associate be released from custody on condition that she enters into a good behaviour bond under section 12 of the Crimes (Sentencing Procedures) Act 1999 for a term with conditions that she: i. be of good behaviour; ii. appear before the court if called to do so at any time during the term of the bond; iii. accept the supervision and guidance and comply with all reasonable direction of the Probation and Parole Service for as long as deemed necessary; iv. report to Probation and Parole at Port Macquarie Community Offender Services within 7 days. d. The Lay Associate was ordered to pay $26,657.29 in compensation. 2. Matter 71646 P Waters, Certificate of Conviction pages 12, 18 a. At some time prior to 9 October 2007 in the course of her duties while employed at the Practice the Lay Associate received a cheque, being New England Credit Union cheque #632390 for $2014.18 from a client of the Practice directed for payment to the Practice. b. The Lay Associate in breach of section 300(1) of the Crimes Act endorsed the rear of the cheque to read 'Please pay R L Taylor' and forged the signature of Peter Pardy to make the endorsement look legitimate. c. On 9 October 2007 the Lay Associate in breach of section 300(2) of the Crimes Act used the cheque by presenting it as her own and depositing it into the joint bank account. d. The Lay Associate was sentenced in accordance with paragraph 1 (c) above. 3. Matter 71412 K & C Turner, Certificate of Conviction pages 24, 7 a. At some time prior to 13 November 2007 in the course of her duties while employed at the Practice the Lay Associate received a cheque, being National Australia Bank cheque #1227322 for $2,268.52 from a client of the Practice directed for payment to the Practice. b. The Lay Associate in breach of section 300(1) of the Crimes Act endorsed the rear of the cheque to read 'Please pay R L Taylor' and forged the signature of Peter Pardy to make the endorsement look legitimate. c. On 13 November 2007 the Lay Associate in breach of section 300(2) of the Crimes Act used the cheque by presenting it as her own and depositing it into the home loan account. d. The Lay Associate was sentenced in accordance with paragraph 1 (c) above. 4. Matter unable to be linked to a file, Certificate of Conviction pages 16, 22 a. At some time prior to 26 February 2008 in the course of her duties while employed at the Practice the Lay Associate in breach of section 300(1) of the Crimes Act caused a Practice Office Account cheque, being National Australia Bank cheque #113131 for $660.00 to be made payable to D M Taylor Pty Ltd. b. The Lay Associate in further breach of section 300(1) of the Crimes Act endorsed the rear of the cheque to read 'D Taylor' and forged the signature of Peter Pardy to make the endorsement look legitimate. c. On 26 February 2008 the Lay Associate in breach of section 300(2) of the Crimes Act used the cheque by presenting it as her own and depositing it into the joint account. D he Lay Associate was sentenced in accordance with paragraph 1 (c) above. 5. Matter 80733 N Chadd, Certificate of Conviction pages 25,13 a. At some time prior to 22 May 2008 in the course of her duties while employed at the Practice the Lay Associate received a cheque, being Westpac Banking Corporation cheque #2762996 for $1,269.05 from a client of the Practice directed for payment to the Practice. b. The Lay Associate in breach of section 300(1) of the Crimes Act endorsed the rear of the cheque to read 'Please pay R L Hutton' and forged the signature of Peter Pardy to make the endorsement look legitimate. c. On 22 May 2008 the Lay Associate in breach of section 300(2) of the Crimes Act used the cheque by presenting it as her own and depositing it into the sole bank account. d. The Lay Associate was sentenced in accordance with paragraph 1 (c) above. 6. Matter 80551 0 & S Bokeyr, Certificate of Conviction pages 23, 5 a. On or about 16 June 2008 in the course of her duties while employed at the Practice the Lay Associate received a cheque, being New England Credit Union cheque #737575 for $2,059.05 from a client of the Practice directed for payment to the Practice. b. The Lay Associate in breach of section 300(1) of the Crimes Act endorsed the rear of the cheque to read 'Please pay R L Taylor' and forged the signature of Peter Pardy to make the endorsement look legitimate. c. On or about 16 June 2008 the Lay Associate in breach of section 300(2) of the Crimes Act used the cheque by presenting it as her own and depositing it into the sole bank account. d. The Lay Associate was sentenced in accordance with paragraph 1 (c) above. 7. Matter 80333 P Nanayakkara, Certificate of Conviction pages 19, 15 a. At some time prior to 15 July 2008 in the course of her duties while employed at the Practice the Lay Associate took possession of an outgoing Practice Trust Account cheque payable to Bernard Chiu, being National Australia Bank cheque #033165 for $632.74. b. The Lay Associate in breach of section 300(1) of the Crimes Act endorsed the rear of the cheque to read 'Please pay R L Taylor' and forged the signature of Bernard Chiu to make the endorsement look legitimate. c. On or about 14 July 2008 the Lay Associate in breach of section 390(2) of the Crimes Act used the cheque by presenting it as her own and depositing it into the sole bank account. d. The Lay Associate was sentenced in accordance with paragraph 1 (c) above. 8. Matter 71646 P A Waters, Certificate of Conviction pages 8, 10 a. At some time prior to 5 August 2008 in the course of her duties while employed at the Practice the Lay Associate took possession of an outgoing Practice cheque payable to Practice client Paul Anthony Waters, being National Australia Bank cheque #033365 for $1,013.10. b. The Lay Associate in breach of section 300(1) of the Crimes Act endorsed the rear of the cheque to read 'Please pay Rebecca Hutton' and forged the signature of Paul Waters to make the endorsement look legitimate. c. On or about 3 August 2008 the Lay Associate in breach of section 300(2) of the Crimes Act used the cheque by presenting it as her own and depositing it into the sole bank account. d. The Lay Associate was sentenced in accordance with paragraph 1 (c) above. 9. Matter 81224 G & C Askew, Certificate of Conviction pages 21, 17 a. On or about 25 August 2008 in the course of her duties while employed at the Practice the Lay Associate received a cheque, being Commonwealth Bank of Australia cheque #169173 for $2,099.98 from a client of the Practice directed for payment to the Practice. b. The Lay Associate in breach of section 300(1) of the Crimes Act endorsed the rear of the cheque to read 'Please pay R L Hutton' and forged the signature of Peter Pardy to make the endorsement look legitimate. c. On or about 25 August 2008 the Lay Associate in breach of section 300(2) of the Crimes Act used the cheque by presenting it as her own and depositing it into the sole bank account. d. The Lay Associate was sentenced in accordance with paragraph 1 (c) above. 10. Matter 70974 Telatha Pty Ltd Certificate of Conviction pages 9, 4 a. At some time prior to 21 October 2008 in the course of her duties while employed at the Practice the Lay Associate took possession of an outgoing Practice Office Account cheque payable to Mr Bearup, being National Australia Bank cheque #506977 for $3,502.89. b. The Lay Associate in breach of section 300(1) of the Crimes Act endorsed the rear of the cheque to read 'Please pay Rebecca Hutton' and forged the signature of Mr Bearup to make the endorsement look legitimate. c. On or about 21 October 2008 the Lay Associate in breach of section 300(2) of the Crimes Act used the cheque by presenting it as her own and depositing it into the sole bank account. d. The Lay Associate was sentenced in accordance with paragraph 1 (c) above. 11. Matter 90518 M Laurie Certificate of Conviction pages 20, 3 a. At some time prior to 15 August 2009 in the course of her duties while employed at the Practice the Lay Associate took possession of an outgoing Practice Trust Account cheque payable to Practice client Michelle P Laurie, being National Australia Bank cheque #034794 for $2,020.00 [sic]. b. The Lay Associate in breach of section 300(1) of the Crimes Act endorsed the rear of the cheque to read 'Please pay Rebecca Hutton' and forged the signature of Michelle Laurie to make the endorsement look legitimate. c. On or about 14 August 2008 the Lay Associate in breach of section 300(2) of the Crimes Act used the cheque for $2025.00 by presenting it as her own and depositing it into the sole bank account. d. The Lay Associate was sentenced in accordance with paragraph 1 (c) above. THE EVIDENCE 5The evidence in the hearing of this Application comprises: (1)The Application of the Law Society filed 11 October 2011. (2)The Affidavit of Anne-Marie Foord, the Manager of the Professional Standards Department of the Law Society of NSW, sworn 27 September 2011. (3)The Affidavit of Garry Terence Napper, Trust Account Investigator for the Law Society of NSW, sworn 7 October 2011. (4)The Reply of the Respondent filed 18 November 2011 admitting the Grounds and the Particulars of the Grounds. (5)Information conveyed to the Tribunal on behalf of the Respondent by the Solicitor for the Law Society to the effect that the Respondent does not oppose the Orders sought and that since leaving her employment with the law practice, she has had work only as a bar maid and is a single parent. RELEVANT LEGISLATION 6Under Section 7 of Legal Profession Act 2004, the term "associate of a law practice" includes "an employee of, or person paid in connection with, the law practice who is not an Australian legal practitioner", and, a "lay associate" means "an associate of the practice who is not an Australian legal practitioner". The Respondent at all material times when employed by the law practice EPJ Law, was employed as a secretary and para-legal and was not an Australian legal practitioner. She was therefore a lay associate of the law practice. 7Sections 17 to 20 of the Legal Profession Act 2004 provide 17 Associates who are disqualified or convicted persons (1) A law practice must not have a lay associate whom any principal or legal practitioner associate of the law practice knows to be: (a) a disqualified person, or (b) a person who has been convicted of a serious offence, unless the associate is approved by the relevant authority under subsection (3). (2) A contravention by a law practice of subsection (1) is capable of being unsatisfactory professional conduct or professional misconduct on the part of a principal or legal practitioner associate of the law practice involved in the contravention. (3) The "relevant authority" to approve a person for the purposes of subsection (1) is: (a) in the case of a disqualified person who is an associate of a barrister-the Bar Council, or (b) in the case of a disqualified person who is an associate of a solicitor-the Law Society Council, or (c) in the case of a person who has been convicted of a serious offence-the Tribunal. (4) If a Council decides to refuse an application by a person for approval under subsection (3) (a) or (b) or to grant the approval subject to conditions, the person may apply to the Tribunal for a review of the decision. Note: Reviews are carried out under Chapter 5 of the Administrative Decisions Tribunal Act 1997 . Section 729A modifies the operation of that Act. An appeal lies to the Supreme Court under section 729A against a decision of the Administrative Decisions Tribunal. (5) An approval under this section may be subject to specified conditions. (6) A disqualified person, or a person convicted of a serious offence, must not seek to become a lay associate of a law practice unless the person first informs the law practice of the disqualification or conviction. Maximum penalty: 100 penalty units. (7) Proceedings for an offence under subsection (6) may only be brought within 6 months after discovery of the offence by the law practice. (8) This section does not apply in circumstances prescribed by the regulations. (9) In this section: "lay associate" of a law practice has the same meaning as in section 7 (Terms relating to associates and principals of law practices), and includes a consultant to the law practice (however described) who: (a) is not an Australian legal practitioner, and (b) provides legal or related services to the law practice, other than services of a kind prescribed by the regulations. 18 Prohibition on employment of certain lay associates (1) This section applies to a person who is not an Australian legal practitioner and who is or was a lay associate of a law practice that: (a) engages in legal practice principally in this jurisdiction, or (b) employs or employed the person to work principally in this jurisdiction, and so applies whether or not the law practice subsequently ceased to exist or engage in legal practice principally in this jurisdiction and whether or not any person ceases, by death or otherwise, to be a legal practitioner associate of the law practice. (2) On application by a Council, the Tribunal may make an order prohibiting (without approval under section 17 (Associates who are disqualified or convicted persons)) any law practice from employing or paying in connection with the legal practice engaged in by the law practice a specified person to whom this section applies, if: (a) the Tribunal is satisfied that the person is not a fit and proper person to be employed or paid in connection with that legal practice, or (b) the Tribunal is satisfied that the person has been guilty of conduct that, if the person were an Australian legal practitioner, would have constituted unsatisfactory professional conduct or professional misconduct. (3) An order under this section may apply to a specified law practice or specified class of law practices or may apply to law practices generally. (4) An order under this section may be revoked by the Tribunal on application by a Council or the person against whom the order was made. 19 Prohibition on partnerships with certain non-legal partners (1) This section applies to a person who is not an Australian legal practitioner and who: (a) is or was a partner of a local legal practitioner, or (b) is or was a partner of an Australian legal practitioner and engaged in a business conducted by the partnership principally in this jurisdiction. (2) On application by a Council, the Tribunal may make an order prohibiting (without approval under section 17 (Associates who are disqualified or convicted persons)) any Australian legal practitioner from being a partner, in a business that includes the practitioner's practice, of a specified person to whom this section applies if: (a) the Tribunal is satisfied that the person is not a fit and proper person to be such a partner, or (b) the Tribunal is satisfied that the person has been guilty of conduct which, if the person were an Australian legal practitioner, would have constituted unsatisfactory professional conduct or professional misconduct. (3) An order made under this section may be revoked by the Tribunal on application by a Council or by the person against whom the order was made. (4) The death of an Australian legal practitioner does not prevent an application being made for, or the making of, an order under this section in relation to a person who was a partner of the practitioner. 20 Proceedings on prohibition orders (1) The parties to an application to the Tribunal under this Division may be represented by an Australian legal practitioner at the hearing of the application. (2) On making an order under this Division, or on determining an application for approval under section 17 (Associates who are disqualified or convicted persons), the Tribunal may make orders for costs. (3) An order for costs: (a) may be for a specified amount or an unspecified amount, and (b) if for an unspecified amount, may specify the basis on which the amount is to be determined, and (c) may specify the terms on which costs must be paid. (4) A Council must: (a) retain in its office a register of orders made under section 18 or 19 on its application or approvals given by it under section 17, and (b) permit the register to be inspected during office hours and without charge, but only if the inspection is made by an Australian legal practitioner. (5) In any proceedings under this Act, a document that purports: (a) to be an order under section 18 or 19, and (b) to be signed by the member constituting, or presiding at the sitting of, the Tribunal when the order was made, is, without further proof, evidence of the order it purports to be. CONCLUSIONS 8On 4 May 2011 in the Gunnedah Local Court the Respondent pleaded guilty to: 52 charges of making a false instrument with intent under Section 300(1) of the Crimes Act, 1900 NSW; 52 charges of using a false instrument with intent under Section 300(2) of the Crimes Act, 1900 NSW; 3 charges of obtaining money by deception under Section 178BA(1) of the Crimes Act, 1900 NSW; and 1 charge of larceny under Section 117 of the Crimes Act, 1900 NSW. 9The Respondent was sentence to 15 months gaol on the charges of making a false instrument, and 9 months gaol on the charges of using a false instrument. The sentences were suspended on the conditions that she be of good behaviour and she was ordered to pay compensation of $26,657.29. 10Misappropriations occurred from funds in the Trust Account of APJ Law and also the Office Account. It involved some occasions of altering or forging cheques or forging endorsements on the cheques. 11Fraudulent misappropriation of money received by an Australian legal practitioner were the moneys received on behalf of another person is professional misconduct justifying a striking off order (see Law Society of NSW -v- Bonham [2008] NSWADT 55 at para 14 and the cases there cited). Striking off orders have been made in other cases where an associate has misappropriated moneys (see Council of the Law Society of NSW -v- Barford [2011] NSWADT 303; Law Society of NSW -v- Day [2009] NSWADT 95; Law Society of NSW -v- Bowler [2009] NSWADT 83.) CONCLUSIONS 12Both grounds of the application have been established. 13We are satisfied that the Respondent is not a fit and proper person to be employed or paid in connection with any legal practice. We therefore made an Order pursuant to Section 18(2) of the Act prohibiting any law practice employing or paying the Respondent in connection with the legal practice engaged in by the law practice, without approval under Section 17 of the Legal Profession Act 2004. COSTS 14Having regard to the provisions of Section 20 of the Act and the findings we have made, the Respondent should pay the costs of the Law Society. The costs have been assessed at $2,000.00 and the Law Society proposes that the Respondent have until 3 August 2013 to pay, given her modest financial circumstances. We therefore made an order for the costs of $2,000.00 to be paid by the Respondent on or before 3 August 2013. ********** 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: 21 March 2012