Administrative Decisions Tribunal New South Wales Medium Neutral Citation: Council of the Law Society of NSW v Scully [2012] NSWADT 207 Hearing dates: 23 August 2012 Decision date: 10 October 2012 Jurisdiction: Legal Services Division Before: D Patten, Deputy President D Fairlie, Judicial Member C Bennett, Non Judicial Member Decision: 1. The Solicitor is guilty of Unsatisfactory Professional Conduct. 2. The Solicitor is reprimanded. 3. The Solicitor to pay the Council's costs. Catchwords: Letter by Solicitor containing untrue statement - Failure to reply to correspondence - Failure to keep client informed - Unsatisfactory Professional Conduct Legislation Cited: Legal Profession Act 2004 Cases Cited: Law Society of New South Wales v Foreman (1994) 34 NSWLR 408 Category: Principal judgment Parties: Council of the Law Society of NSW (Applicant) Kenneth Janes Scully (Respondent) Representation: Council of the Law Society of NSW (Applicant) Eakin McCaffrey Cox (Respondent) File Number(s): 112035 REASONS FOR DECISION 1By Application filed on 12 December 2011 the Council of the Law Society of NSW (The Council) alleged that Kenneth James Scully (the Solicitor) was guilty of Professional Misconduct and Unsatisfactory Professional Conduct and that as a consequence he should be publicly reprimanded and ordered to pay the costs of the proceedings. 2Professional Misconduct and Unsatisfactory Professional Conduct were alleged to be constituted as follows: Professional Misconduct 1. The Solicitor misled Messrs Brazel Moore Lawyers by letter dated 28 May 2007. Unsatisfactory Professional Conduct 1. The Solicitor failed to inform the complainant of material developments in her matter. 2. The Solicitor failed to respond to letters dated 4 June 2007, 11 June 2007, 7 August 2007, 24 September 2007, 7 November 2007, 20 December 2007, 8 January 2008, 9 April 2008, 13 February 2009, 6 July 2009 and 28 July 2009 from Brazel Moore Lawyers. 3The case was called on for Hearing before us on 23 August 2012 when Ms C Webster appeared for the Council and Ms J Oakley for the Solicitor. When she opened the case Ms Webster tendered as Exhibit A an Agreed Statement of Facts which needs to be reproduced in full: "The Solicitor" means Kenneth James Scully "Mrs McTague" means Christine McTague "Mr McTague" means Michael Joseph Alexander McTague 1. The Solicitor acted for Mrs McTague in proceedings commenced against her by Mr McTague [her former husband] under the Family Provisions Act and with respect to the Estate of his late mother Doris McTague ["Doris"]. Mrs McTague was the Executrix of her late mother-in-law's Will dated 10 October 2001 and Probate of which had been granted on 6 May 2002. Mr McTague had taken exception to the terms of Doris' Will. The major asset of Doris' Estate was a property at 35 Yeo Street, Yagoona where Mrs McTague and her three (3) children continued to reside after the death of Doris, having previously resided there. 2. There were subsequent attempts to negotiate a settlement, including mediation. 3. Subsequent to the mediation Mr and Mrs McTague agreed to a settlement of the Family Provisions Act proceedings and to enter into a Binding Financial Agreement under Section 90D of the Family Law Act 1975. 4. On 27 April 2007, Minutes of Order were signed by Mr and Mrs McTague as a result of which they entered into a Deed of Agreement and Release. Relevantly, Mrs McTague would pay the sum of $90,000 to Mr McTague and Mrs McTague and the children would receive the property at 35 Yeo Street Yagoona. 5. On 28 May 2007 Mrs McTague paid the sum of $90,000 to Mr McTague and on 28 May 2007 the property was transmitted to Mrs McTague as executor. 6. Mr and Mrs McTague also signed a Binding Financial Agreement under section 90D of the Family Law Act 1975. It was agreed between the parties to the Family Provisions Act proceedings but not recorded in the Short Minutes of Order or the Deed of Settlement or the Binding Financial Agreement that Mrs McTague would cause a letter to be sent to the Child Support Agency to withdraw the outstanding arrears of child maintenance owed to her by Mr McTague for the period 1 January 2003 to 31 December 2006. 7. The Solicitor informed Mrs McTague that he would write to the Child Support Agency on her behalf. 8. By letter dated 25 May 2007 the Solicitor wrote to Mrs McTague. That letter, relevantly, provided as follows: "We confirm that the writer attended at the Supreme Court of NSW on the 27th April 2007 and that the Short Minutes of Orders were approved by the Court. ....... We will now write to the Child Support Agency and request that they not forward to you any monies under the Order. ....." 9. By letter dated 28 May 2007 the Solicitor wrote to Mr McTague's Solicitors, Messrs Brazel Moore ["Brazel"]. That letter, in part, provided: We have written to the Child Support Agency and will advise you of the outcome in due process. 10. The Solicitor did not write to the Child Support Agency as indicated in his letter of 25 May 2007 to Mrs McTague and his letter of 28 May 2007 to Brazel. 11. The solicitor disclosed the fact that he had not written to the Child Support Agency in the solicitor's letter to the Law Society dated 23 April 2010 which was his first response to the Law Society. 12. The solicitor did not intend to mislead Brazel when he wrote the letter of 28 May 2007. Brazel does not complain that he was misled. 13. On 4 June 2007 Brazel sent a letter to the Solicitor, in part acknowledging receipt of the Solicitor's letter of 28 May 2007, noting that the Solicitor was writing to the Child Support Agency and requesting the Solicitor's early advices. There was no reply from the Solicitor to this letter. The Solicitor did not inform Mrs McTague of the receipt of this letter. 14. On 11 July 2007 Brazel sent a letter to the Solicitor asking for advice on the Child Support Agency issue. There was no reply from the Solicitor to this letter. The Solicitor did not inform Mrs McTague of the receipt of this letter. 15. On 7 August 2007 Brazel sent a letter to the Solicitor noting that they had not received a response to the letter of 11 July 2007 and asking for urgent advice as to the Child Support Agency issue. There was no reply from the Solicitor to this letter. The Solicitor did not inform Mrs McTague of the receipt of this letter. 16. On 24 September 2007 Brazel sent a letter to the Solicitor again asking for advice as to the status of the Child Support Agency issue. There was no reply from the Solicitor to this letter. The Solicitor did not inform Mrs McTague of the receipt of this letter. 17. On 7 November 2007 Brazel sent a letter to the Solicitor again asking for advice as to the status of the Child Support Agency issue. There was no reply from the Solicitor to this letter. The Solicitor did not inform Mrs McTague of the receipt of this letter. 18. On 20 December 2007 Brazel sent a letter to the Solicitor enclosing a number of copy letters and asking, as a matter of urgency, whether there had been any progress with the Child Support Agency issue. There was no reply from the Solicitor to this letter. The Solicitor did not inform Mrs McTague of the receipt of this letter. 19. On 8 January 2008 Brazel sent a letter to the Solicitor noting, in part, that there had not been any response from him to their numerous letters and requesting that Mrs McTague inform the Child Support Agency that she was not intending to enforce the arrears of payments by Mr McTague and failing which their client would commence Equity proceedings in the Supreme Court of NSW. The letter also referred to a position apparently taken by Mrs McTague and with the Child Support Agency that she did not intend to waive the arrears of child support, contrary to the settlement she had reached with Mr McTague. There was no reply from the Solicitor to this letter. The Solicitor did not inform Mrs Tague of the receipt of this letter. 20. On 9 April 2008 Brazel sent a letter to the Solicitor advising, in part, that they were now instructed to "make an Application to the Court for Orders of Specific Performance of the settlement agreement" and an order for costs against Mrs McTague. The Solicitor was requested to advise whether he was instructed to accept service of the process. There was no reply from the Solicitor to this letter. The Solicitor did not inform Mrs McTague of the receipt of this letter. 21. On 13 February 2009 Brazel sent a letter to the Solicitor enclosing a form entitled "Non-Agency Payment Details" ["the document"]. The letter did not call for a response. There was no reply from the Solicitor to this letter. By letter dated 16 February 2009, the Solicitor forwarded the document to Mrs McTague. Mrs McTague discussed the document with the Solicitor and informed him she would ring the Child Support Agency and find out what the document was for. The Solicitor left it to Mrs McTague to make those enquiries of the Child Support Agency. 22. On 6 July 2009 Brazel sent a letter to the Solicitor enclosing, in part, a sealed copy of the Statement of Claim and asking the Solicitor if he had instructions to accept service - if not, to return the various documents to Brazel. There was no reply from the Solicitor to this letter. The Solicitor did not inform Mrs McTague of the receipt of this letter. 23. On 28 July 2009 Brazel sent a letter to the Solicitor referring to their letter of 6 July 2009 and again requesting advice as to whether they had instructions to accept service of the Statement of Claim on behalf of Mrs McTague. There was no reply from the Solicitor to this letter. The Solicitor did not inform Mrs McTague of the receipt of this letter. 4On the face of it probably the most serious matter alleged was the letter referred to in paragraph 9 of the agreed facts although its significance is tempered by paragraph 12. In saying this we do not seek to minimise the gravity of the Solicitor's failure to acknowledge and reply to a number of items of correspondence received from another Solicitor over a period of more than two years and his failure to communicate to his client the fact that he had received this correspondence. 5In the Solicitor's case Ms Oakley read the Solicitor's affidavit sworn 14 March 2012. He deposed to the facts that he is 60 years old and was admitted to practice as a solicitor on 8 March 1974. He has been in private practice since 1979. Since 1999 he has been a Sole Practitioner "undertaking a wide range of matters other than for Family Law". 6As to the matters before the Tribunal the Solicitor referred to paragraph 13 of the Affidavit of Mrs McTague sworn 2 December 2011 in these proceedings. That paragraph and paragraph 12 preceding it read: 12. On or about 20 February 2009 I received a document styled "Non-Agency Payment Details". This document had been completed by Michael and sent by his Solicitors to Mr Scully. Mr Scully had then sent it to me. Annexed hereto and marked with the letter "B" is a true copy of a letter dated 16 February 2009 from Mr Scully to me [together with enclosure]. 13. After receipt of the Non-Agency Payment Details document, I telephoned Mr Scully and had a conversation with him to the following effect: Me:"I received this Non-Agency Payment Detailsdocument. What's it for?" Mr Scully:"I don't know. I thought you would". Me:"I don't know. I'll ring the Child Support Agency and find out". Shortly after my telephone conversation with Mr Scully I telephoned the Child Support Agency and had a conversation with a member of its staff. As a result of that conversation I came to understand that they had not received any correspondence from Mr Scully as he had indicated in his letter of 25 May 2007 to me. The Child Support Agency was to make further enquiries and contact me. On the basis of the Child Support Agency advice to me, I did not sign this document and left the matter to the Child Support Agency. 7In his affidavit the Solicitor said: I refer to paragraph 13 of the affidavit in addition to this conversation there was a subsequent conversation not long after this when Ms McTague rang me and she said words to the following effect; "I have spoken to Child Support and they explained to me that the form is meant to acknowledge receipt by me of cash payments from Michael and to do so may mean I could lose my carer's pension. I'm not going to sign it". 8The Solicitor addressed the allegations of Professional Misconduct and Unsatisfactory Professional Conduct made against him in paragraphs 28 to 30 of his Affidavit. 28. In response to the allegation of professional misconduct I acknowledge that I did not write to the Child Support Agency although I said that in my letter to Brazel Moore Lawyers of 28 May 2007. I disclosed this fact to the Law Society in my solicitor's letter dated 23 April 2010 which was my first response to the Law Society. I did not intend to mislead Brazel Moore Lawyers at the time I wrote the letter and I completely accept that a solicitor should be entitled to rely on the word of another legal practitioner and that I should have corrected the statement I made. 29. In response to the two allegations under the heading unsatisfactory professional conduct I admit that I did not respond to the letters that are particularized and that I should have done so. 30. Other than for the letter dated 13 February 2007 which I did forward to Ms McTague I did not forward copies of the remaining particularised letters to Ms McTague. It was my belief as a result of the conversations that I had with Ms McTague and referred to in paragraph 13 of her affidavit and paragraph 27 above that she was dealing with the Child Support Agency directly and had taken a position that she would not sign the form sent with this letter. 9Nowhere has the Solicitor provided any explanation for the false statement in his letter of 28 May 2007 or for his failures to acknowledge subsequent correspondence and report receipt of such correspondence to his client. 10In paragraph 31 of his affidavit the Solicitor annexed a letter dated 29 March 2009 from the Child Support Agency to Brazel Moore Lawyers: Re: Michael Joseph Alexander McTague Child Support Reference: [number] I wish to confirm that we received your correspondence into our office on 17the February 2009. As per our conversation today, I wish to confirm that the Binding Financial Agreement is not a child support agreement and cannot be registered as it makes no mention of child support. I have sought clarification today with Christine McTague and she confirmed that it is not her intention to discharge any arrears owed to her by Michael McTague. If you have any questions or wish to discuss this further, please contact Child Support Agency. 11Ms Oakley tendered in her client's case as Exhibit 1 a deed between Mr McTague, Ms McTague and the Solicitor dated 30 April 2012. The recitals in the deed included: A. Christine and Michael were previously married. Christine and Michael divorced on 6 January 2003. B. Michael was to pay child support as provided by the Child Support Act until Christine and Michael's youngest child, Jason McTague, turned 18 on 22 January 2009. C. Michael's mother, Doris McTague (Doris), passed away on 5 March 2002. In her will, Doris bequeathed a large part of her estate to Christine. D. Subsequently, Michael made a claim in respect of Doris' will under the Family Provisions Act and made a property adjustment claim. Michael was represented by Brazel Moore, solicitors, in these matters. E. Christine instructed Scully to act in relation to Michael's Family Provisions Act and property adjustment claims. F. In about 2007, Christine and Michael settled Michael's claims (The First Settlement). The First Settlement involved a binding financial agreement and a deed of agreement and release. The binding financial agreement and the deed of agreement and release are referred to as if fully set out herein. G. Michael alleges that the First Settlement also involved an agreement pursuant to which: (a) the parties were required to cause the Child Support Agency (the Agency) to withdraw outstanding charges levied against Michael; and (b) Christine would forgo all claims in respect of arrears of child maintenance levied against Michael from 2003 to 2006. The matters in (a) and (b) above and any other matters concerning obligations on Michael and/or Christine in connection with child maintenance or child support are herein referred to as the McTague Child Support Issues. H. It is alleged that on or about 25 may 2007, Scully wrote to Christine stating, inter alia: "We will now write to the [Agency] and request that they not forward to you any monies under the Order ...." I. It is alleged that on 28 May 2007, Scully wrote to Brazel Moore, solicitors, stating, inter alia: "We have written to the [Agency] and will advise you of the outcome in due course". J. It is alleged that on various occasions between about June 2007 and February 2009, Brazel Moore wrote to Scully or otherwise communicated with Scully about McTague Child Support Issues. It is alleged that Scully failed to inform Christine of his correspondence and communications with Brazel Moore about McTague Child Support Issues. K. It is alleged that in the period between 2007 and 2009, Christine had dealings with the Agency about McTague Child Support Issues. L. It is alleged that in the period 2007 and 2009, Christine had dealings with Scully about McTague Child Support Issues. M. On 20 March 2009, the Agency wrote to Brazel Moore stating: "I have sought clarification today with [Christine] and she confirmed that it is not her intention to discharge any arrears owed to her by [Michael]." N. On or about 30 June 2009, Michael commenced Supreme Court proceedings number 3472 of 2009 (the Proceeding) seeking: (a) an order for specific performance; (b) damages; (c) interest, and (d) indemnity costs". 12The operative part of the deed provided: 2. Payment 2.1 Without admission of liability: (a) Christine will pay Michael $15,000 within 28 days of the date of this Deed. (b) Scully will pay Christine $7,500 within 28 days of the date of this Deed. (c) Christine irrevocably directs Scully to pay the amount referred to in (b) above to Michael. (d) The parties acknowledge that payment by Scully in accordance with the direction in (c) above will discharge Christine's obligation in (a) above to the amount of the payment by Scully. (e) The payments referred to in this clause shall be made by way of cheques payable to "Brazel Moore Trust Account" and sent to Brazel Moore Solicitors. 13The deed provided for the parties to give mutual releases and we were asked to note that the amount payable by the Solicitor under the deed had been paid. 14Finally Ms Oakley read an affidavit sworn by Brian Dooley SC. Mr Dooley deposed: 5. I have been acquainted with Mr Scully through professional practice since as best I can recall approximately 1985. 6. During that time to the present I have been briefed by him in a large number of cases. 7. Prior to my appointment of Silk in October 2007 there was a period of many years when I was briefed to appear in cases by Mr Scully. This involved the appearance for Court and numerous conferences between Mr Scully and his clients. This contact would often be as much as three times per week. On most occasions this would involve the client being present. 8. I believe I am in an excellent position to attest to the manner of his conduct of his practice as a Solicitor, his reputation amongst fellow practitioners and his dealings and relationships with his clients, and the matters I refer to are based on my observations. 9. Mr Scully has always behaved in a professional and ethical manner towards his fellow practitioners. 10. He enjoys an excellent reputation for honesty and integrity with his fellow practitioners. 11. There has never been an occasion where he has engaged in practices which might be described as cutting corners, misleading, or engaged in any "sharp practices" with his fellow practitioners, nor with his clients. 12. With respect to the dealings with his clients, Mr Scully enjoyed a remarkable degree of repour (sic) with his clients. In all dealings that I am able to recall, Mr Scully appeared to have kept his clients fully informed of the nature of the proceedings, their rights and liabilities and the current state of the proceedings. 13. He appeared to enjoy the respect and confidence of his clients. 14. I note the agreement to the unsatisfactory professional conduct in respect of the three matters listed, the behaviour described is entirely out of character with his professional conduct observed in regard to his practice, both with his clients and fellow practitioners. 15In her closing submissions Ms Webster submitted that the Solicitor's failure to respond to some 10 letters which required response clearly constituted Unsatisfactory Professional Conduct within the meaning of the Act. We agree that it falls squarely within s 496: 496 Unsatisfactory professional conduct For the purposes of this Act: unsatisfactory professional conduct includes conduct of an Australian legal practitioner 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 of a reasonably competent Australian legal practitioner. 16She also submitted that the untrue statement in the Solicitor's letter of 28 May 2007 at least constituted Unsatisfactory Professional conduct. We also agree with that submission. In this case conduct which may have constituted Professional Misconduct is in our view rendered no more than Unsatisfactory Professional Conduct by the inclusion in the Agreed Statement of Facts of the statement that the Solicitor did not intend to mislead. We record however that what he did intend is not apparent to us and has not been identified by the Solicitor. 17It was whatever the intent an untrue statement in respect of an important matter and accordingly in our view falls within the terms of s 496. We reject Ms Oakley's submission that as we understand it the concession made in paragraph 12 of the agreed facts results in the Council failing to prove its pleaded case in respect of the letter and accordingly no adverse finding should be made. 18In our opinion s 562(6) warrants a finding on the evidence as presented of Unsatisfactory Professional Conduct even though the facts as pleaded on their face may warrant the more serious finding of Professional Misconduct. 19Ms Oakley submitted that the public interest in this case does not require the imposition of any penalty. She pointed to the compensation paid by the Solicitor as evidencing contrition, to the fact that he admitted the underlying facts alleged against him and to the evidence provided by Mr Dooley which suggests that the Solicitor's conduct in this case is very much out of character with his usual behaviour. 20Ms Webster on the other hand submitted that to impose no penalty would be a quite inadequate response to the gravity of the matters alleged and proved. 21In our opinion the public interest does require the making of an order which reflects the seriousness of the Solicitor's conduct. Apart from anything else in this particular case it extended over a number of months and was a cause of Mr McTague feeling obliged to commence proceedings in the Supreme Court. Although our jurisdiction is protective rather than punitive the power to impose fines and administer reprimands indicates that the Legislature contemplated that even in a case where a solicitor's right to continue in practice is not questioned there should be in the wider interests of the community a public expression of disapproval. This will operate not only to deter this solicitor from future conduct of a similar kind but deter other practitioners who might be tempted to act in a similar way [Law Society of New South Wales v Foreman (1994) 34 NSWLR 408]. 22In our opinion we should accept Ms Webster's submission that the Solicitor should be publicly reprimanded. He should also be ordered to pay the costs of the proceedings. 23We make the following finding and orders: (1)The Solicitor is guilty of Unsatisfactory Professional Conduct. (2)The Solicitor is reprimanded. (3)The Solicitor to pay the Council's 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. Decision last updated: 10 October 2012