Administrative Decisions Tribunal New South Wales Medium Neutral Citation: Council of the Law Society of New South Wales v McGuire (No 2) [2012] NSWADT 63 Hearing dates: 12 March 2012, 13 March 2012 Decision date: 11 April 2012 Jurisdiction: Legal Services Division Before: Haylen J (Deputy President) N Isenberg, Judicial Member C Bennett, Non-Judicial Member Decision: Application dismissed Catchwords: Alleged professional misconduct - acting contrary to conditions of Practising Certificate - practitioner acting in private capacity for family member pursuant to Power of Attorney - application dismissed Legislation Cited: Legal Profession Act 2004 Cases Cited: Council of the Law Society of New South Wales v McGuire [2011] NSWADT 133 Spina v Permanent Custodians Ltd [2008] NSWSC 561 Texts Cited: Australian Legal Dictionary (1997 -Butterworths: The Hon Dr Peter Nygh, Peter Butt, General Editors) Category: Principal judgment Parties: Council of the Law Society of New South Wales (Applicant) Ben McGuire (Respondent) Representation: Counsel C Webster (Applicant) B Antcliffe (Respondent) Law Society of New South Wales (Applicant) Austin & Giugni, Legal Services Pty Ltd (Respondent) File Number(s): 102020 REASONS FOR DECISION BACKGROUND 1For a number of years and certainly since 2007, Mr Ben McGuire has been issued with a Practising Certificate by the Law Society of New South Wales (the "Society") containing certain conditions. The Practising Certificate that has been regularly issued to Mr McGuire is referred to as an "unrestricted/corporate and non-lawyer entity Practising Certificate" meaning that the holder is entitled to engage in legal practice as a solicitor in the course of employment by a corporation (other than an incorporated legal practice) or a non-lawyer entity. At all material times Mr McGuire supplied "practising details" to the Society and nominated Virgin Management Asia Pacific Pty Ltd as the employer ("Virgin Management"). This employment ultimately led Mr McGuire to spend a considerable amount of time outside Australia and also involved him working out of London. 2At all relevant times Mr McGuire was also employed by Solus Lupus Pty Ltd ("Solus Lupus"). Mr McGuire was the sole director and shareholder of Solus Lupus and that company was described as a vehicle through which he provided consulting services to a range of clients. Solus Lupus was not an incorporated legal practice or a licensed mercantile agent. At no relevant time did Mr McGuire, in renewing his Practising Certificate, identify Solus Lupus as an employer. 3For some period of time Mr McGuire provided assistance to his mother and other members of his family in relation to an ongoing, bitter, family dispute. The family dispute had its origins in the termination of his mother's defacto relationship with a Mr Robert Brennan. The breakdown of that relationship appears to have had consequences for a number of the members of the family and they have been involved in considerable litigation over the years. 4Mr Brennan was moved to make a complaint to the Legal Services Commissioner alleging that Mr McGuire's dealing with him during this acrimonious family dispute had been undertaken by Mr McGuire in his professional capacity as a solicitor rather than in his personal capacity. That complaint was referred to the Society for investigation and subsequently the Society commenced proceedings under s 551 of the Legal Profession Act 2004 alleging that Mr McGuire was guilty of professional misconduct. 5Mr McGuire has, at all relevant times, vigorously denied the allegations and has asserted that he was not acting as a solicitor in his correspondence with Mr Brennan in relation to a debt owed to another family member but at all times he was acting in his personal capacity. While exchanging voluminous correspondence with the Society during and after its investigation, Mr McGuire steadfastly asserted that he had not been informed in what way it was alleged that he had acted contrary to the terms of his Practising Certificate. The Society failed to satisfy Mr McGuire in relation to this matter ultimately leading to the Tribunal considering a Notice of Motion filed by Mr McGuire seeking various types of relief, including the termination or Stay of the investigation by the Society and a Stay of proceedings in the Tribunal. That Application was the subject of a separate determination by the Tribunal (see Council of the Law Society of New South Wales v McGuire [2011] NSWADT 133). That decision of the Tribunal also provides a concise summary of the issues that have arisen between the parties. 6The decision of the Tribunal allowed Mr McGuire to seek further and better particulars from the Society but it appears the responses to those requests failed to satisfy Mr McGuire. Ultimately, the Tribunal determined that the matter be listed for hearing at which time any further interlocutory matters would be dealt with in light of the first decision given by the Tribunal and that the substantive matter would also be determined. That hearing took place on 12 and 13 March 2012. THE APPLICATION AND PARTICULARS 7The Application for Original Decision filed in the Tribunal by the Society alleged that Mr McGuire was guilty of professional misconduct, in particular, by practising contrary to the terms of his Practising Certificate. The orders sought by the Society were that Mr McGuire be reprimanded; that he pay the Applicant's costs; and, be subject to such other orders as deemed fit by the Tribunal. 8The particulars of the Grounds of Complaint were as follows: In these Particulars: "the Solicitor" means Ben McGuire "the Society" means the Law Society of New South Wales 1.The Solicitor's mother had been in a de facto relationship. 2.In February 2009 the Solicitor's mother and her former partner became involved in legal proceedings in respect of the division of assets acquired during their relationship. The proceedings were before the ACT Supreme Court and the Federal Court. 3.As at 22 July 2007 the Solicitor was the holder of a Practising Certificate entitling him only to '... engage in legal practice as a solicitor in the course of employment by a corporation (other than an incorporated legal practice) or a non-lawyer entity.' 4.The Solicitor had, as at 22 July 2007, notified the Registry of the Society that his corporate employment was with Virgin Management Asia Pacific Pty Ltd. 5.By letter dated 22 July 2007, the Solicitor, on a letterhead styled Solus Lupus Pty Limited, wrote to his mother's former partner therein stating, relevantly, as follows: I act for Wayne Kaufline. ... If this amount is not received by 5.00 pm on Thursday 26 July 2007 I am instructed to commence legal proceedings for the recovery of the loan plus interest and costs without further notice to you. Yours faithfully Ben McGuire Solus Lupus Pty Ltd 6.Solus Lupus Pty Limited is not an incorporated legal practice. 7.Solus Lupus Pty Limited is not a licensed mercantile agent. 8.The Solicitor was, at the relevant date, the sole director and shareholder of Solus Lupus Pty Limited. 9.Solus Lupus Pty Limited, at the relevant time, was used "as a vehicle through which consulting services are provided to a range of clients, being: The conduct of a range of negotiation courses for a range of clients; the conduct of public speaking engagements for a range of clients; the conduct of commercial consultancy services for a range of services; and the conduct of free-lance writing engagements for a range of publications." It should be noted that Mr Kaufline is Mr McGuire's uncle. 9In July 2011 the Society responded to Mr McGuire's request for further and better particulars. In that document the Society made it clear that it was not alleging that Mr McGuire acted in a professional capacity as a solicitor employed by Solus Lupus. The correspondence then set out the following requests and responses: 1.Regardless of the capacity in which the Law Society alleges I wrote the letter: 1.1On what basis does the Law Society regard my having written the letter as constituting engaging in legal practice? 3.The letter uses the words "I act for Wayne Kaufline ... " and "... I am instructed to commence legal proceedings ... ." They are words indicating the undertaking of legal practice on behalf of another. Further, the letter makes a demand for payment on behalf of Mr Kaufline. 3.2On what basis does the Law Society regard my having written the letter as constituting engaging in professional misconduct? 4.The Law Society contends that the writing of the letter constituted professional misconduct because, by sending the letter to Mr Brennan: You engaged in legal practice as in [3]; and did so contrary to your entitlement to practice as per the terms of your Practising Certificate as in the answer to 3.3 below. 5.Professional misconduct is defined in an inclusive manner in s 497 of the Legal Profession Act 2004 ("the Act"). Section 498(1) (a) provides that conduct consisting of a contravention of the Act, the Regulations or the Legal Professional Rules is capable of being unsatisfactory professional conduct or professional misconduct. 6.As noted in Council of the Law Society of New South Wales v Singh [2011] NSWADT 47 at [46], the decision of the Court of Appeal in Mee Ling v The Law Society of New South Wales [1974] 1 NSWLR 490 is authority for the proposition that a practitioner who purports to practice or, hold himself or herself out as entitled to practice, without being the holder of a Practising Certificate, or in breach of conditions to which their Practising Certificate is subject may, by that fact alone, be guilty of professional misconduct at common law. 3.4Which section of the Legal Profession Act 2004 (hereafter, "the Act") does the Law Society allege I have breached in writing the letter? 14.The Society's Application does not allege the breach of a particular section or sections of the Act. The allegation is of professional misconduct at common law: see[6] above. THE EVIDENCE 10The facts relied upon by the Society were not contested by Mr McGuire. In essence, his contention was that those facts could not and did not constitute professional misconduct. 11At the hearing Mr McGuire provided a statement and in giving oral evidence affirmed the correctness of the document. In that statement he confirmed that he was employed by Virgin Management and was also employed by Solus Lupus in July 2007. In 2007 his immediate family was involved in a family dispute with his stepfather of some 26 years, Mr Brennan. He described the dispute as being "very acrimonious." Mr Wayne Kaufline was his uncle and Mr Brennan owed Mr Kaufline $49,400 plus interest. Mr Kaufline had told Mr McGuire that Mr Brennan had refused to pay the loan and so Mr McGuire offered to assist Mr Kaufline recover the money. He referred to a conversation in approximately May 2007 with Mr Kaufline in which he offered to help Mr Kaufline recover the money, an offer that was accepted by Mr Kaufline. Mr McGuire told Mr Kaufline that Mr Brennan thought he was helping his mother as her lawyer and that he did not trust him so he needed a Power of Attorney to be signed to give him authority as Mr Kaufline's nephew to deal with Mr Brennan on his behalf. Mr McGuire stated that he knew he was unable to act for Mr Kaufline as his lawyer as he was "not licensed for private practice" and it was for that reason that he drafted the Power of Attorney 12Mr McGuire accepted that he wrote the letter of 22 July 2007 using the words relied upon by the Society, namely, that he was acting for Mr Kaufline and upon his instructions. He said that he appreciated that, in the letter, he could have expressed his role more completely by referring to the Power of Attorney he held but stated that, in view of the family history, he presumed that Mr Brennan would appreciate that he was merely assisting his uncle in regard to an acknowledged debt and trying to finalise the matter. He said he used the words "I am instructed to commence legal proceedings" to make it clear to Mr Brennan that if he did not repay the loan owed to Mr Kaufline, then he had authority to instruct a lawyer to begin legal proceedings to recover the money. He had written this letter on the letterhead of Solus Lupus using a Bondi address because that was both his personal address and the registered address of the company as specified in the Power of Attorney. 13Mr Wayne Kaufline provided an affidavit that was read in the proceedings. Mr Kaufline was not required for cross-examination. In the affidavit, Mr Kaufline spoke of the family history and that Mr McGuire was his nephew. In May 2006 he had loaned Mr Brennan $49,400 and that loan was documented in a loan agreement. Mr Brennan had failed to repay the loan on the due date despite several requests that he repay the loan. 14It was confirmed to Mr Kaufline that Mr Brennan would not repay the loan. He recalled a conversation with Mr McGuire in approximately July 2007 where he informed Mr McGuire that he did not want anything more to do with Mr Brennan. Mr McGuire offered to assist in having the money repaid and Mr Kaufline accepted that offer. During the conversation Mr McGuire said words to the effect: After all that he has done to the family, I don't trust him so I will need your written authority to write to him as your nephew. He already thinks I am acting as mum's lawyer when I am helping her as her son and I don't want any more trouble from him on that front. 15Mr McGuire drafted the Power of Attorney and explained it to Mr Kaufline who then signed it. Mr Kaufline stated that he had no intention of using Mr McGuire as his lawyer and said that Mr McGuire had never acted for him as a lawyer. Mr McGuire was helping him out in his capacity as his nephew in trying to recover a debt. Mr Kaufline further stated that Mr McGuire had never acted for him as his lawyer, had never asked for a fee and he had never paid Mr McGuire a fee. Mr McGuire had never provided Mr Kaufline with a letter of engagement and he had not expected such a document. He understood that Mr McGuire was helping out because Mr Kaufline was his uncle and he was assisting him because they were family. He confirmed that, through informal refinancing arrangements, Mr McGuire and his personal company had partly funded the loan made to Mr Brennan. 16An executed copy of a Power of Attorney dated 22 May 2007 was attached to Mr Kaufline's affidavit. The terms of the Power of Attorney were as follows: I, Wayne Kaufline, ... hereby appoint my nephew, Ben McGuire, of Solus Lupus Pty Limited, ... under Power of Attorney to act in his personal capacity with full and unlimited authority as my personal representative to deal in my stead with Mr Rob Brennan (hereafter, "Mr Brennan") and to do all such acts and to execute all such documents which I am permitted at law to do and execute respectively in relation to repayment of a loan made by me to Mr Brennan (hereafter, the "Loan") pursuant to a Deed of Agreement between myself and Mr Brennan dated 15 May 2006 (hereafter, the "Deed of Agreement", a copy of which is attached), including without limitation, to: (a)conduct discussions and negotiations and otherwise liaise with Mr Brennan; (b)correspond with, and demand repayment of the Loan from, Mr Brennan; (c)correspond with Mr Brennan in relation to the commencement of proceedings in relation to any failure to repay the Loan; (d)agree to any partial or full repayment of the Loan as he deems appropriate in full and final settlement of the debt outstanding under the Deed of Agreement; (e)negotiate and document any settlement reached; (f)arrange for the transfer to me of monies in relation to partial or full repayment of the Loan, whether directly or otherwise; (g)do such acts and execute such documents as may be necessary to document or otherwise give effect to any arrangements reached with Mr Brennan in relation to partial or full repayment of the Loan. SUBMISSIONS 17The Society's case was succinctly put at the hearing: when Mr McGuire wrote the letter of demand for his uncle using the words " I act for ... " and "I am instructed to commence legal proceedings for the recovery of the loan", Mr McGuire was using the language of the law and thereby was practising law contrary to the restrictions on his Practising Certificate. There was no provision of the Legal Profession Act nor any Regulation or Rule that had been breached. The allegation was that, in using those words, Mr McGuire was practising law and was doing so contrary the conditions on his Practising Certificate. At common law this amounted to professional misconduct. 18Mr McGuire had a number of answers to this case but essentially they were as follows: (a)at all times he was acting in his private capacity for a family member in relation to a loan that he had partly financed through Solus Lupus; (b)he had no intention of charging Mr Kaufline in relation to attempting to recover the debt owed by Mr Brennan and indeed, had rendered no fees and had not received any money in relation to that matter; (c)when he had offered to assist Mr Kaufline in recovering the debt from Mr Brennan, he was aware that Mr Brennan might accuse him of some type of improper conduct and so he did took the precaution of requesting Mr Kaufline to execute a Power of Attorney to enable Mr McGuire to pursue the recovery of this debt. 19In submissions, counsel for the Society drew attention to the fact that, until the proceedings regarding Mr McGuire's Notice of Motion seeking interlocutory relief, the Society was unaware of the existence of a Power of Attorney executed by Mr Kaufline regarding the recovery of this debt by Mr McGuire. When the Tribunal pointed out that Mr McGuire had not been cross-examined on the basis that the Power of Attorney was a recent fabrication or had otherwise not been in existence at the time that the letter was written to Mr Brennan, those propositions were immediately accepted but the submission was placed in the context that, if Mr McGuire had taken care to mention the Power of Attorney in his letter to Mr Brennan, any concern about the capacity in which he was acting might have dissolved. 20Mr McGuire, during the course of the interlocutory proceedings, raised the existence of this Power of Attorney executed by Mr Kaufline. When the Tribunal enquired why it had not been raised earlier he replied that, since he had relocated to London, he had not been able to locate the document amongst all the other documents he possessed. It is also of some relevance that Mr McGuire considered the Society to have prematurely concluded their investigation (and he had sought an interlocutory order to that effect from the Tribunal) and regarded himself still at the stage of requiring the Society to explain precisely how sending the letter amounted to practising contrary to the terms of his Practising Certificate. From other materials before the Tribunal on the interlocutory application it was clear that Mr McGuire had prepared a number of documents for family members, often in an attempt to settle various aspects of the family dispute. Indeed, he had referred to having a Power of Attorney executed in his favour by his mother in relation to certain ongoing aspects of the family dispute. In all these activities, Mr McGuire maintained that he was acting in his personal capacity for members of his family and was not engaging in legal practice nor was he seeking fees or receiving fees for this assistance. These matters had not been relied upon by the Society in the present proceedings. CONSIDERATION 21As earlier noted, the core of the Society's case is that the letter written by Mr McGuire was couched in language "regularly used by solicitors" in stating that he acted for Mr Kaufline and was instructed to commence legal proceedings: he had used the language of the law and those words indicated the undertaking of legal practice. The Tribunal is not satisfied that, by using words that might be used by solicitors or others with authority to act, Mr McGuire was thereby guilty of a most serious professional charge, namely, professional misconduct. In the view of the Tribunal some further act by Mr McGuire was necessary before it could be concluded that he was, indeed, practising law and doing so contrary to the conditions of his Practising Certificate. If Mr McGuire had entered into a fees agreement, had accepted fees or had personally commenced proceedings as a legal practitioner against Mr Brennan, then a different picture of the relationship could be established: but there is simply no such additional element that would warrant a serious finding of professional misconduct being made against Mr McGuire. 22Once Mr McGuire's actions are understood in the context of the various ways he has assisted family members in their numerous disputes, the Power of Attorney he had obtained from his mother, and, the terms of the Power of Attorney obtained from his uncle, Mr Kaufline, then the Society's case against Mr McGuire is left without a firm evidentiary basis. The terms of the Power of Attorney make it clear that Mr McGuire was appointed by reference to his relationship as "nephew" and also by reference to Mr McGuire's company, Solus Lupus. Mr McGuire, under the Power of Attorney, was to act in his "personal capacity" as Mr Kaufline's personal representative to deal with Mr Brennan and the focus of the power, although probably wide enough to authorise legal action being taken, is otherwise focused on attempting to bring about a settlement of the dispute by the repayment of the money or compromising the claim in order to settle the issue. 23In the submissions before the Tribunal, no attention was paid to the scope of a Power of Attorney. The Australian Legal Dictionary (1997 - Butterworths: The Hon Dr Peter Nygh, Peter Butt, General Editors) provided the following definition of Power of Attorney: 1.The Authority for one person to act in the place of another as agent, conferred by an instrument (usually under seal) described as a "Power of Attorney." 2.A formal instrument authorising a person to act for another, to sign legally binding documents on behalf of the donor of that authority. A Power of Attorney is used where the authority of the agent is required to be conferred by deed or in any other circumstances where it is desired to formally appoint an agent to act in one transaction or a series of transactions, or to manage the affairs of the principal generally. 24In Spina v Permanent Custodians Ltd [2008] NSWSC 561, Hammerschlag J gave consideration to the scope of a Power of Attorney. Dealing with concept of agency and Power of Attorney, his Honour stated: [101].As a general rule whatever a person has power lawfully to do can be done by him, her or it through an agent. There are exceptions including where a statute prevents it and where the power concerned is purely personal and therefore not capable of delegation: Halsbury's Laws of England, 5th ed, Vol 1 at [3]. 102In law the word "agency" is used to connote a relationship arising from consent which relationship exists when one person (the agent) has the authority to act on behalf of another, (the principal). ... ... ... [105]The traditional name for a contractual document creating express authority when the principal gives an agent wide general powers to act on his behalf is a "Power of Attorney."... ... [107]The law may impute to a principal knowledge in relation to the subject matter of the agency which the agent acquires while acting within the scope of his authority. ... 25Having regard to the terms of the Power of Attorney granted to Mr McGuire by his uncle, Mr Kaufline, when Mr McGuire wrote the 2007 letter to Mr Brennan it was quite apt and proper for him to describe himself as acting for Mr Kaufline and having instructions to commence proceedings if the loan was not repaid. That was an accurate description of his authority as agent for Mr Kaufline. The words relied upon by the Society are not the sole preserve of legal practitioners and may just as appropriately be used by agents who hold an authority to act for a principal. It is of some significance that the Society, in its submissions, did not address the effect of the Power of Attorney held by Mr McGuire and the width of Mr McGuire's authority to act on behalf of Mr Kaufline in relation to the debt owed to him by Mr Brennan. There was a faint suggestion that if Mr McGuire had taken care to mention the Power of Attorney in the letter then any concern as to the capacity in which he was operating would have dissolved. It cannot be the case, however, that such a minor omission (if it be accepted as an omission) could amount to professional misconduct. 26Having regard to the matters raised by the parties the Tribunal is satisfied that, when Mr McGuire wrote the 2007 letter to Mr Brennan, he was not practising as a solicitor and was therefore not practising in breach of the terms and conditions of his Practising Certificate. The Society's claim that Mr McGuire was thereby guilty of professional misconduct must be dismissed. 27Should any party wish to apply for costs (having regard to the terms of s 566 of the Legal Profession Act), written submissions in support of that application should be filed with the Tribunal and served on the opposing party within 14 days of the date on which this decision is published and provided to the parties. Any replies should be filed and served within a further seven days. The parties should indicate if they wish to be heard by way of brief oral submissions in addition to the written submissions or whether they consent to having the issue of costs determined by the Tribunal on the written submissions filed. Finally, Mr Brennan is to be advised of the Tribunal's decision in this matter. 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: 11 April 2012