Council of Law Society of NSW v Guy [2012] NSWADT 200

Administrative Decisions Tribunal New South Wales Medium Neutral Citation: Council of Law Society of NSW v Guy [2012] NSWADT 200 Hearing dates: 22 August 2012 Decision date: 26 September 2012 Jurisdiction: Legal Services Division Before: D Patten, Deputy President M Riordan, Judicial Member Professor R Fitzgerald, Non Judicial Member Decision: 1. That the Solicitor is guilty of Professional Misconduct as alleged. 2. That the name of the Solicitor be removed from the local roll. 3. That the Solicitor pay the Applicant's costs. Catchwords: Multiple breaches of the Act and Regulation - Professional Misconduct - Removal from roll appropriate Legislation Cited: Legal Profession Act 2004 Legal Profession Regulation 2005 Cases Cited: Allinson v General Council of Medical Education and Registration [1884] 1KB 750 Council of Law Society v Clapin (No. 2) [2011] NSWADT 246 Law Society v Jones Unreported Court of Appeal 29 July 1978 Category: Principal judgment Parties: The Council of the Law Society of NSW (Applicant) Gregory Peter Guy (Respondent) Representation: Counsel Ms C Webster (Applicant) Mr R M Smith SC and Ms S Hughes (Respondent) Council of the Law Society of NSW (Applicant) Low Doherty & Stratford File Number(s): 122003

REASONS FOR DECISION 1By application filed with the Tribunal on 23 February 2012, the Council of the Law Society of NSW (the Council) seeks a finding that Gregory Peter Guy (the Solicitor) is guilty of Professional Misconduct and an order that his name be removed from the roll. 2Originally the matters alleged against the Solicitor were grouped under 12 headings but one of them was not pressed at the hearing. Within most of the headings more than one breach of the Solicitor's obligations was alleged. 3The Solicitor was born on 24 September 1953. He was admitted as a Solicitor on 11 May 1979 and became the principal of the firm Guy and Associates in July 1984. He continued in this role until his practising certificate was suspended on 28 February 2009 pursuant to s 70 of the Legal Profession Act 2004 (the Act). 4For the most part, the Solicitor admitted what was alleged against him and an agreed Summary of Facts was tendered as Exhibit A. It was conceded by the Solicitor's counsel, Mr R M Smith SC, (who appeared with Ms Hughes) that Professional Misconduct had been established. 5Before coming to a consideration of the facts, it is appropriate that we set out the relevant statutory and regulatory framework contained in the Act and the Legal Profession Regulation 2005 (The Regulation). Most of the matters alleged involve breaches of the Act and/or the Regulation. 6Sections 255, 260, 262, 309, 311, 497, 498, 660 and 674 of the Act provide so far as relevant to the circumstances of this case: "255 Holding, disbursing and accounting for trust money (1) A law practice must: (a) hold trust money deposited in a general trust account of the practice exclusively for the person on whose behalf it is received, and (b) disburse the trust money only in accordance with a direction given by the person. Maximum penalty: 50 penalty units. (2) Subsection (1) applies subject to an order of a court of competent jurisdiction or as authorised by law. (3) The law practice must account for the trust money as required by the regulations. Maximum penalty: 50 penalty units. ....................................................... 260 Intermixing money (1) A law practice must not, otherwise than as permitted by subsection (2), mix trust money with other money. Maximum penalty: 100 penalty units. (2) A law practice is permitted to mix trust money with other money to the extent only that is authorised by the Law Society Council and in accordance with any conditions imposed by the Law Society Council in relation to the authorisation. 262 Deficiency in trust account (1) An Australian legal practitioner is guilty of an offence if he or she, without reasonable excuse, causes: (a) a deficiency in any trust account or trust ledger account, or (b) a failure to pay or deliver any trust money. Maximum penalty: 200 penalty units. (2) A reference in subsection (1) to an account includes a reference to an account of the practitioner or of the law practice of which the practitioner is an associate. (3) In this section: "cause" includes be responsible for. "deficiency" in a trust account or trust ledger account includes the non-inclusion or exclusion of the whole or any part of an amount that is required to be included in the account. ....................................................... 309 Disclosure of costs to clients (1) A law practice must disclose to a client in accordance with this Division: (a) the basis on which legal costs will be calculated, including whether a fixed costs provision applies to any of the legal costs, and (b) the client's right to: (i) negotiate a costs agreement with the law practice, and (ii) receive a bill from the law practice, and (iii) request an itemised bill after receipt of a lump sum bill, and (iv) be notified under section 316 of any substantial change to the matters disclosed under this section, and (c) an estimate of the total legal costs if reasonably practicable or, if that is not reasonably practicable, a range of estimates of the total legal costs and an explanation of the major variables that will affect the calculation of those costs, and (d) details of the intervals (if any) at which the client will be billed, and (e) the rate of interest (if any), whether a specific rate or a benchmark rate, that the law practice charges on overdue legal costs, whether that rate is a specific rate of interest or is a benchmark rate of interest (as referred to in subsection (1A)), and (f) if the matter is a litigious matter, an estimate of: (i) the range of costs that may be recovered if the client is successful in the litigation, and (ii) the range of costs the client may be ordered to pay if the client is unsuccessful, and (g) the client's right to progress reports in accordance with section 318, and (h) details of the person whom the client may contact to discuss the legal costs, and (i) the following avenues that are open to the client in the event of a dispute in relation to legal costs: (i) costs assessment under Division 11, (ii) the setting aside of a costs agreement or a provision of a costs agreement under section 328 (Setting aside costs agreements or provisions of costs agreements), (iii) mediation under Division 8, and (j) any time limits that apply to the taking of any action referred to in paragraph (i), and (k) that the law of this jurisdiction applies to legal costs in relation to the matter, and (l) information about the client's right: (i) to accept under a corresponding law a written offer to enter into an agreement with the law practice that the corresponding provisions of the corresponding law apply to the matter, or (ii) to notify under a corresponding law (and within the time allowed by the corresponding law) the law practice in writing that the client requires the corresponding provisions of the corresponding law to apply to the matter. Note. The client's right to sign an agreement or give a notification as mentioned in paragraph (l) will be under provisions of the law of the other jurisdiction that correspond to section 304 (Part also applies by agreement or at client's election). ............................................ 311 How and when must disclosure be made to a client? (1) Disclosure under section 309 must be made in writing before, or as soon as practicable after, the law practice is retained in the matter. ............................................. 497 Professional misconduct (1) For the purposes of this Act: professional misconduct includes: (a) unsatisfactory professional conduct of an Australian legal practitioner, where the conduct involves a substantial or consistent failure to reach or maintain a reasonable standard of competence and diligence, and (b) conduct of an Australian legal practitioner whether occurring in connection with the practice of law or occurring otherwise than in connection with the practice of law that would, if established, justify a finding that the practitioner is not a fit and proper person to engage in legal practice. (2) For finding that an Australian legal practitioner is not a fit and proper person to engage in legal practice as mentioned in subsection (1), regard may be had to the matters that would be considered under section 25 or 42 if the practitioner were an applicant for admission to the legal profession under this Act or for the grant or renewal of a local practising certificate and any other relevant matters. 498 Conduct capable of being unsatisfactory professional conduct or professional misconduct (1) Without limiting section 496 or 497, the following conduct is capable of being unsatisfactory professional conduct or professional misconduct: (a) conduct consisting of a contravention of this Act, the regulations or the legal profession rules, (b) charging of excessive legal costs in connection with the practice of law, (c) conduct in respect of which there is a conviction for: (i) a serious offence, or (ii) a tax offence, or (iii) an offence involving dishonesty, (d) conduct of an Australian legal practitioner as or in becoming an insolvent under administration, (e) conduct of an Australian legal practitioner in becoming disqualified from managing or being involved in the management of any corporation under the Corporations Act 2001 of the Commonwealth, (f) conduct consisting of a failure to comply with the requirements of a notice under this Act or the regulations (other than an information notice), (g) conduct of an Australian legal practitioner in failing to comply with an order of the Disciplinary Tribunal made under this Act or an order of a corresponding disciplinary body made under a corresponding law (including but not limited to a failure to pay wholly or partly a fine imposed under this Act or a corresponding law), (h) conduct of an Australian legal practitioner in failing to comply with a compensation order made under this Act or a corresponding law. (2) Conduct of a person consisting of a contravention referred to in subsection (1) (a) is capable of being unsatisfactory professional conduct or professional misconduct whether or not the person is convicted of an offence in relation to the contravention. 660 Requirements in relation to complaint investigations (1) For the purpose of carrying out a complaint investigation in relation to an Australian lawyer, an investigator may, by notice served on the lawyer, require the lawyer to do any one or more of the following: (a) to produce, at a specified time and place, any specified document (or a copy of the document), (b) to provide written information on or before a specified date (verified by statutory declaration if the requirement so states), (c) to otherwise assist in, or co-operate with, the investigation of the complaint in a specified manner. ................................................ (3) A person who is subject to a requirement under subsection (1) or (2) must comply with the requirement. Maximum penalty: 50 penalty units. (4) A requirement imposed on a person under this section is to be notified in writing to the person and is to specify a reasonable time for compliance. (5) A person who is subject to a requirement under subsection (1) or (2) is not entitled to charge the investigator for doing anything in compliance with the requirement. ........................................................ 674 Obstruction or misleading of investigator (1) A person must not, without reasonable excuse, obstruct or mislead an investigator exercising a power under this Act. Maximum penalty: 100 penalty units. (2) In this section: "obstruct" includes hinder, delay, resist and attempt to obstruct." 7Clauses of the Regulation relevant to this case are 82 and 88: "82. (1) A law practice must furnish a trust account statement to each person for whom or on whose behalf trust money (other than transit money) is held or controlled by the law practice or an associate of the practice. (2) In the case of trust money in respect of which the law practice is required to maintain a trust ledger account, the practice must furnish a separate statement for each trust ledger account. (3) In the case of controlled money in respect of which the law practice is required to maintain a record of controlled money movements, the practice must furnish a separate statement for each record. (4) In the case of trust money subject to a power given to the law practice or an associate of the practice in respect of which the practice is required to keep a record of all dealings with the money to which the practice or associate is a party, the practice must furnish a separate statement for each record. (5) A trust account statement is to contain particulars of: (a) all of the information required to be kept under this part in relation to the trust money included in the relevant ledger account or record, and (b) the remaining balance (if any) of the money. (6) A trust account statement is to be furnished: (a) as soon as practicable after completion of the matter to which the ledger account or record relates, or (b) as soon as practicable after the person for whom or on whose behalf the money is held or controlled makes a reasonable request for the statement during the course of the matter, or (c) except as provided by subclause (7), as soon as practicable after 30 June in each year. (7) The law practice is not required to furnish a trust account statement under subclause (6) (c) in respect of a ledger account or record if at 30 June: (a) the ledger account or record has been open for less than 6 months, or (b) the balance of the ledger account or record is zero and no transaction affecting the account has taken placed within the previous 12 months, or (c) a trust account statement has been furnished within the previous 12 months and there has been no subsequent transaction affecting the ledger account or record. (8) The law practice must retain a copy of a trust account statement furnished under this clause." ............................................................ 88. (1) This clause prescribes, for the purposes of section 261(1)(b) of the Act, the procedure for the withdrawal of trust money held in a general trust account or controlled money account of a law practice for payment of legal costs owing to the practice by the person for whom the trust money was paid into the account. (2) The trust money may be withdrawn in accordance with the procedure set out in either subclause (3) or (4). (3) The law practice may withdraw the trust money: (a) if: (i) the money is withdrawn in accordance with a costs agreement that complies with the legislation under which it is made and that authorises the withdrawal, or (ii) the money is withdrawn in accordance with instructions that have been received by the practice and that authorise the withdrawal, or (iii) the money is owed to the practice by way of reimbursement of money already paid by the practice on behalf of the person, and (b) if, before effecting the withdrawal, the practice gives or send to the person a request for payment, referring to the proposed withdrawal. (4) The law practice may withdraw the trust money: (a) if the practice has given the person a bill relating to the money and (b) if: (i) the person has not objected to a withdrawal of the money within 7 days after being given the bill, or (ii) the person has objected within 7 days after being given the bill but has not applied for a review of the legal costs under the Act within 60 days after being given the bill, or (iii) the money otherwise becomes legally payable. (5) Instructions mentioned in subclause (3)(a)(ii): (a) if given in writing, must be kept as a permanent record, or (b) if not given in writing, must be confirmed in writing either before, or not later than 5 working days after, the law practice effects the withdrawal and a copy must be kept as a permanent record. (6) For the purposes of subclause (3)(a)(iii), money is taken to have been paid by the law practice on behalf of the person when the relevant account of the practice has been debited. 8We proceed to outline the transgressions alleged against and largely admitted by the Solicitor: