Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Council of the Law Society of NSW v Carney [2016] NSWCATOD 103 Hearing dates: 23 June 2016 Date of orders: 10 August 2016 Decision date: 10 August 2016 Jurisdiction: Occupational Division Before: Cowdroy QC ADCJ, Principal Member M Riordan, Senior Member E Hayes, General Member Decision: (1) The Solicitor be reprimanded. (2) No Practising Certificate (including renewal) should be issued to the Solicitor until she has produced to the Society, at her own expense, a report from a psychiatrist confirming that she is fit to practise and if so, on what basis. The psychiatrist is to be nominated by the Solicitor and agreed to by the Society and must not be related to the Solicitor by marriage, family or other pre-existing association or connection. (3) For a period of 2 years after the solicitor is issued with a Practising Certificate (following compliance with order 2 above), the Solicitor is: (a) To be issued with a Practising Certificate entitling her to practice only as an employed solicitor. (b) To be supervised by a law practice (including any unrestricted principal(s) charged with supervising her) not connected with her by marriage, family or other pre-existing association or connection. (c) To notify her employer of the conditions imposed on her Practising Certificate. (d) To provide to the Society each 6 months and at her own expense a further report from the psychiatrist that confirms that she remains fit to practice and on what, if any, basis. (4) The Solicitor is to pay the Society's costs as agreed or assessed. Catchwords: Solicitor – Disciplinary application – Professional Misconduct – Consequential orders Legislation Cited: Legal Profession Act 2004 Legal Profession Uniform Law Application Act 2014 (NSW) Legal Profession Uniform Law Application Legislation Amendment Act 2015 Interpretation of Legislation Act 1984 (Vic) Civil and Administrative Tribunal Act 2013 (No. 2) Legal Profession Regulation – 2005 Cases Cited: Allinson v General Council of Medical Education and Registration [1894] 1 QB 750 at 763 Re Clayton (1961) SR 132 Bechara v Legal Services Commissioner 79 NSWLR 763 Brereton v Legal Services Commissioner [2010] VSC 378 at [24] Briginshaw v Briginshaw (1938) 60 CLR 336 at 361-363 Council of the New South Wales Bar Association v Perry [2007] NSWCA 111 at [20] Coe v NSW Bar Association [2000] NSWCA 13 at [21] Council of the Law Society of NSW v Hancock (No 2) [2013] NSWADT 180 Council of the Law Society of New South Wales v Clapin [2011] NSWADT 83 Council of the Law Society of New South Wales v Coombes [2015] NSWCATOD 108 at [36-43] Council of the Law Society of New South Wales v Hinde [2011] NSWADT 20 at [33] Council of the NSW Bar Association v Power [2008] 71 NSWLR 451; [2008] NSWCA 135 Council of the New South Wales Bar Association v Asuzu [2011] NSWADT 209 at [34] Council of the New South Wales Bar Association v Costigan [2013] NSWCA 407 Dupal v Law Society of New South Wales [1990] NSWCA 56 at 60, 64 Health Care Complaints Commission v Wingate [2007] 70 NSWLR 323 Kennedy v The Council of the Incorporated Law Institute of New South Wales (1939) 13 ALJR 563 Law Society of New South Wales v Walsh [1997] NSWCA 185 Law Society of NSW v Shehadie [2016] NSWCATOD 46 Law Society of New South Wales v Foreman [1994] 34 NSWLR 408 at 441 Law Society of New South Wales v Foreman [1991] 24 NSWLR 238 Law Society of New South Wales v Moulton [1981] 2 NSWLR 736 Legal Practitioners Conduct Board v Hay (2001) 83 SASR 454 Mee Ling v Law Society of New South Wales [1974] 1 NSWLR 490 at 497 NSW Bar Association v Meakes [2006] NSWCA 340 at [70], [107] New South Wales Bar Association v Livesey [1982] 2 NSWLR 231 O'Reilly v Law Society of New South Wales [1988] 24 NSWLR 204 at 211, 224-225 Peters v R (1998) 192 CLR 493 Prothonotary of the Supreme Court of New South Wales v McCaffery [2004] NSWCA 470 R v Kelly (Edward) [2000] 1 QB 198 at 208 Re Lenehan (1949) 77 CLR 403 at 422; [1948] HCA 45 Re Veron; ex parte Law Society of New South Wales [1966] 1 NSWR 511 at 515 Re Walker; Ex parte Kemp (1887) 3 WN (NSW) 123 Smith v New South Wales Bar Association (1992) 176 CLR 256 at 270 South Western Sydney Area Health Service v Edmonds [2007] NSWCA 16 The Council of the New South Wales Bar Association V Sahade [2007] NSWCA 145 at [54] Wade v Licardy [1993] 33 NSWLR 1 Ziems v Prothonotary of the Supreme Court of NSW (1957) 97 CLR 279 Category: Principal judgment Parties: Council of the Law Society of New South Wales (Applicant) Catherine Eve Carney (Respondent) Representation: Counsel: G Johnson (Applicant) J Giles SC (Respondent) File Number(s): 1620034 Reasons for Decision Background 1. On 5 February 2016, the Council of the Law Society of New South Wales (hereafter 'the applicant') filed an Application for Disciplinary Findings and Orders naming Catherine Eve Carney ('the Solicitor') as Respondent, claiming that she had engaged in professional misconduct. It sought orders against as follows: 1. That she be reprimanded; 2. That no practising certificate be issued (including renewal) to her until she has produced to the applicant at her own expense, a report from a psychiatrist nominated by her and agreed to by the applicant ('the psychiatrist') confirming that she is fit to practise and on what, if any, basis. The psychiatrist is not to be related to her by marriage, family or other association or connection; 3. That for a period of 5 years (during which she holds a Practising Certificate) and after compliance with order (2) above, she is: 1. To be issued with a Practising Certificate entitling her to practise only as an employed solicitor; 2. To be supervised by a law practice (including any unrestricted principal(s) charged with supervising the solicitor) not connected with her by marriage, family or other association or connection; 3. To notify her employer of these conditions imposed on her Practising Certificate; and 4. To provide, each 6 months after the grant or renewal of a Practising Certificate, a further report from the psychiatrist confirming that the solicitor remains fit to practise and on what, if any, basis; 1. That she pays the applicant's costs (as agreed or assessed); and 2. Such further or other order as the Tribunal thinks fit. 1. The matter was heard before us on 23 June 2016. Mr Johnson of Counsel appeared for the applicant and Mr Giles of Senior Counsel appeared for the Solicitor. 2. The Law Society relied upon affidavits that were sworn by the following deponents on the dates indicated: Ms Anne-Marie Foord, its solicitor (21 January 2016) and Mr Richard Savage (18 January 2016). These affidavits were admitted without objection and neither deponent was required to attend for cross-examination. 3. On 26 April 2016, the solicitor filed a Reply and an affidavit sworn by Dr Jonathan Phillips on 14 April 2016. However, she did not lodge any other evidence. Dr Phillips' affidavit was admitted without objection and he was not required to attend for cross-examination. Grounds and Particulars 1. The Application alleged that the solicitor was guilty of professional misconduct on 3 grounds: 1. She breached s255 of the Legal Profession Act 2004 ('the Act'); 2. She practised without an appropriate practising certificate and professional indemnity insurance; and 3. She misappropriated trust money. 1. The Particulars were as follows: In these particulars: 'Taren Legal' means Taren Legal Group Pty Ltd. 'the account' means the controlled money account held with the National Bank of Australia (number provided) and described as "Taren Leal Group Pty Limited trading as Mahoney Taren Lawyers Bus Cash Maximiser Sching Investment Controlled Monies Account". 'the funds' means the sum of $126,000 held in the account. 'the Law Practice' means Carbon Legal. 'the New Manager' means Mr Richard Savage. 'the Society' means the Law Society of New South Wales. 'the solicitor' means Catherine Eve Carney. A. The Solicitor has: Breached section 255 of the Legal Profession Act 2004. Misappropriated trust money. 1. On 16 May 2013 (effective at 12:00pm on 17 May 2013), the solicitor's appointment as Manager of Taren Legal pursuant to section 616 of the Legal Profession Act 2004, was terminated. 2. On 16 May 2013, the New Manager was appointed to Taren Legal. 3. On 11 July 2014, the Funds were transferred by the solicitor to a personal account operated by her and subsequently appropriated the funds. 4. On 25 August 2014, the New Manager was notified by National Australia Bank that the Funds had been withdrawn. 5. On 25 August 2014, demands were made by the Society to the solicitor for the return of the funds to the account. 6. The Funds were repaid by the solicitor on 27 August 2014. B. The solicitor has practiced without an appropriate Practising Certificate and professional indemnity insurance. 1. The solicitor was the sole principal of the Law Practice. 2. The Law Practice closed on 30 June 2013 and, accordingly, did not have professional indemnity insurance for the period from 1 July 2013 to 25 August 2014. 3. For the year ending 30 June 2014, the Solicitor held an unrestricted non-principal Practising Certificate. 4. On 26 August 2014, the solicitor lodged an application to renew her Practising Certificate for the year ending 30 June 2015. 5. On 28 August 2015, the New Manager was appointed to the Law Practice. 6. On 16 October 2014, the solicitor's application to renew her Practising Certificate for the year ending 30 June 2015 was refused by the Council of the Society. 7. In each of the following instances, the solicitor was not, other than as an employed solicitor (in accordance with the conditions of a holder of a non-principal Practising Certificate and where she did not hold professional indemnity insurance), entitled to undertake legal work: (a) From around 29 May 2013 to 29 November 2013, the solicitor acted for Ms Shirley Helfer Cohen concerning an enduring power of attorney and guardianship. (b) From around 13 August 2013 to 9 December 2013, the solicitor acted for Ms Shirley Helfer Cohen concerning the sale of a property situate and known as 1 Hobart Avenue, East Lindfield. The Solicitor's conduct was contrary to the conditions of her then Practising Certificate. The Solicitor's Response to the Allegations 1. In the Reply, the Solicitor admitted that she contravened s 255 of the Act and the contents of paragraphs A1 to A7 (inclusive) of the particulars and that such conduct constituted a breach of trust. However, she denied that she misappropriated trust money 'insofar as that term connotes an intention to take or appropriate to herself trust money' and asserted that she transferred the funds to a personal account 'by mistake' and that she did not intend to appropriate or otherwise take trust moneys for her own benefit or at all. She stated that the circumstances surrounding the transfer were 'more fully described' in her solicitors' letter to the Society dated 23 December 2014, and in Dr Phillips' report, and that she repaid the funds 'as soon as practicable after the Law Society informed her that the money was trust money'. She also admitted ground 2 and the contents of paragraphs B1 to B7 (inclusive) of the particulars. 2. However, the Solicitor disputed that her conduct amounted to professional misconduct and submitted that it was merely unsatisfactory professional misconduct as it was 'inadvertent (in the sense that she did not have an intention to take trust funds or to practise without an appropriate Practising certificate or professional indemnity insurance)'. 3. In response to the orders sought by the Society, the solicitor stated that she 'consents to' orders 1 and 2 and that she also 'consents to order 3 subject to the period being 12 months in lieu of 5 years or such other period as the Tribunal considers appropriate'. She asserted that each party should pay its own costs. Relevant Legislation 1. The Act was repealed as from 1 July 2015 by s 167 (a) of the Legal Profession Uniform Law Application Act 2014 (NSW) ("the Application Act"). Sched 2 of the Legal Profession Uniform Law Application Legislation Amendment Act 2015 ("the Uniform Law Amendment Act") made a range of consequential amendments as from 1 July 2015, including to the Civil and Administrative Tribunal Act (No. 2) 2013 ("the CAT Act") reflecting the commencement of the Uniform Law from 1 July 2015. 2. This Tribunal has such jurisdiction and functions as may be conferred or imposed upon it by or under the CAT Act or any other legislation (s 28 CAT Act). Further, the Interpretation of Legislation Act 1984 (Vic) ("the Victorian Interpretation Act") must be applied in the interpretation of the Uniform Law, including the transitional provisions (s 7 (1) of the Uniform Law). 3. There are transitional provisions in sch 4 of the Uniform Law and generally speaking, these do not affect or take away from the Victorian Interpretation Act, unless the contrary intention appears (sch 4 cl 2 (1)). 4. The repeal of the Act does not affect any rights, privileges, obligations and liabilities acquired, accrued or incurred under it. Remedies are preserved and legal proceedings may be continued (see: s 30 (1) (c) (e) Interpretation Act 1987 (NSW) and NSW Bar Association v Meakes [2006] NSWCA 340 at [107]. There is no contrary provision in Sch 4. 5. Cl 26 of Sch 4 of the Uniform Law provides: 26 Current complaints and investigations (1) This clause applies to – (a) a complaint made under old Chapter 4 but not disposed of before the commencement day; or (b) an investigation referred to in old Chapter 4 that had begun but had not been completed before the commencement day. (2) On and after the commencement day – (a) the complaint or investigation is to continue to be dealt with in accordance with the provisions of the old legislation; and (b) for that purpose, the complaint or investigation is to continue to be dealt with by the entity responsible for dealing with it under those provisions (the current entity). (3) Subclause (2)(b) does not apply if a local regulation or other legislation of this jurisdiction directs that another entity referred to in this Law (the substituted entity) is to deal with the complaint or investigation instead of the current entity. (4) The substituted entity may have regard to anything done by the current entity before, on or after the commencement day but before the direction takes effect. 1. As the complaint in this matter was made under Chapter 4 of the Act, but was not disposed of before 1 July 2015, it must continue to be dealt with under the Act. We are satisfied that the Uniform Law and the resulting amendments to the CAT Act do not apply to this matter and that this Tribunal's statutory power to make orders, having made a finding of either unsatisfactory professional conduct or professional misconduct, is found in s 562 of the Act. Evidence 1. We note that the solicitor was educated in Tasmania and she obtained a law degree from the University of Tasmania. She became an articled clerk in a Melbourne law firm and thereafter undertook a role with IBM in Sydney. She is married and has two teenage children and has worked on a part-time basis as a sole practitioner since 1996. 2. Following the birth of her second child 16 years ago, the solicitor appears to have suffered a form of post-natal depression. According to her evidence she became very "stressed" in about 2012 and 2013 and we infer that she was having difficulty in coping with her law practice during this period. The New Manager was duly appointed to take over the law practice and there is no suggestion of any deficit in the trust account at that stage. 3. There is no evidence from the Solicitor in relation to her conduct. However, she relies upon a comprehensive report from Dr Phillips. He was not required to attend for cross-examination. 4. Dr Phillips recorded a detailed history from the solicitor, which we consider to be mostly of a personal nature and mostly out of date. For this reason, we do not propose to recite much of his report in this decision. However, in relation to the conduct that is the subject of this application, he noted that the solicitor described herself as "having been stretched" during 2013. She said that she was running the family household, transporting her daughter to Australian ski events and training and taking responsibility for family banking. She also had accounting issues at that time and was in the process of changing accountants, as her previous accountant "had missed various deductions". Her new accountant wanted to review previous tax returns and to facilitate this, she needed to access bank statements under a different banking profile and she was given a new customer number. She believed that the new customer number related to her husband and that she used this to access and print statements for her husband's tax return. She noted that a sum of $126,000 was sitting in "an un-named account" and at that time she was not aware that this was a controlled money account. She believed, incorrectly, that this money legitimately belonged to her husband and she transferred it into a joint mortgage account and subsequently forgot about the transaction. 5. The solicitor stated that in about August 2013, she received a telephone call from the Society and she recalled that she was "accused of stealing money". However, she told the Society that she had previously reported business irregularities in the company to the Law Society officer and he had done nothing about it. She believed that this got "the officer off side". She described reacting to the accusation of theft with "acute anxiety" and said that within 3 days she had transferred the money back to the account nominated by the society. 6. In relation to the issues concerning her Practising Certificate and lack of professional indemnity insurance, the solicitor told Dr Phillips that she had filled out a request for the proper type of certificate, but the Society issued "the wrong type of certificate". Despite this assertion, she said that she did not check the certificate that was issued to her. She also said that her application was lodged late (after her previous certificate expired) and that she ceased practising when she realized that she had been issued with the wrong certificate and that the Society then refused to issue her with 'a proper certificate'. 7. Dr Phillips stated (relevantly): 23. On reflection, Ms Carney believes that for a period during 2012 and 2013, she had been so affected by physical and psychological problems that she had not been in a position to work properly and she did not have a full understanding of the tasks which she undertook. 24. Additionally, Ms Carney has said her general practitioner had let her down when she was withdrawn from thyroid hormone. He had made an inappropriate decision on the basis of pathology results, without taking into consideration her underlying problem… … 34. Ms Carney has a history of hypothyroidism… She believes that her earlier symptoms of depression may have been linked to uncontrolled thyroid disorder… … 78. I do not think that Ms Carney's depression spectrum symptoms (over the years) or her possible anxiety spectrum symptoms will be explained solely on the basis of Hashimoto's disease. It becomes more likely than not that the abnormally low levels of thyroid hormone (after the time when thyroxine and T3 were stopped in an unskilled manner by her general practitioner) have added to her psychological burden. 79. Ms Carney gave a general history of depression spectrum symptoms and fatigue during the period of interest. More significant, however, was her history of poor cognitive performance, particularly attention to detail, problems with concentration/memory, and decision making functions. 80. Impaired cognitive performance is currently associated with an untreated or inadequately treated depression spectrum disorder, and also in any situation where there is hypothyroidism. 81. From the clinical perspective, and on the balance of probabilities, it can reasonably be accepted that at least from 2012, and through 2013 and into 2014, Ms Carney had generally impaired cognition in keeping with the presence of a depression spectrum disorder and probably in the context of inadequate treatment of Hashimoto's disease. 82. Assuming this to be the case, I believe it is likely that Ms Carney failed to properly investigate the origin of the funds which she subsequently transferred from a specific NAB account, and failed to recognize that the monies were in a dedicated legal account, and not part of family monies more generally. Additionally, the client apparently failed to apply at the appropriate time for renewal of her Practising Certificate. She would have known the necessity to have the application submitted on time. This matter, also, suggests that the client's cognitive performance was impaired during the period of interest… 1. Dr Phillips concluded that as at 27 October 2015, the Solicitor did not suffer from any significant psychological or physical symptoms other than a degree of fatigue and he stated (relevantly): 84. Unfortunately, on the information available to me, and from a technical point of view, it is impossible in retrospect to determine if from 2012 Ms Carney suffered from a major depressive disorder, a persistent depressive disorder or an adjustment disorder with depressed mood (chronic type). In reality it does not matter. Simply, on all the information available to me, the client had an altered mental/cognitive state of magnitude sufficient to impair her decision making capacity, particularly in the professional domain. He expressed the opinion that the solicitor 'would never again carry out an act contrary to practice ethics or rule of law, or practise law in any way likely to be detrimental to the public'. Submissions 1. Counsel for both parties relied upon written submissions and oral submissions regarding the substantive issues and penalty, which we have summarized as follows. The Society's Submissions 1. The Society submitted that the facts described in Dr Phillips' report are only evidence of what the Solicitor told the doctor and not evidence of their truth. 2. It also stated that there is no medical evidence that unequivocally associates the solicitor's conduct with the manifestation of any illness. For example, while Dr Phillips relied upon material from Dr Glinka (the solicitor's mother) concerning the issue of her physical health, he was not provided with any independent evidence concerning any medical condition, assessment or medication regime. Doctor Phillips conceded that his opinions are subject to a number of caveats, particularly that they are based largely on the solicitor's history and that he had not interviewed her husband or any other person who could provide a contemporaneous account of her mental condition from 2012 and during the period in which 'the funds were improperly transferred'. 3. Dr Phillips did not believe that either the solicitor's depression-spectrum symptoms (over the years) or her possible anxiety spectrum symptoms were explained solely on the basis of 'Hashimoto's disease', but that it was more likely than not that her abnormally low levels of thyroid hormone had added to her psychological burden. At best, he could only say that on the balance of probabilities that from 2012 and through 2013 and into 2014, the solicitor had "a generally impaired cognition consistent with a depression spectrum disorder and probably in the context of inadequate treatment for Hashimoto's disease. However, it is impossible to determine in retrospect whether she had an altered mental/cognitive state of sufficient magnitude to impair her decision making capacity – particularly in the professional domain". 4. The Society noted that the Solicitor reported to Dr Phillips that she was contrite and distressed at the matter, and that she has a good insight into the improper transfer of monies, and also that she returned the monies on realising her mistake. However, it submitted that the available evidence contradicts some of her self-reporting (particularly that she did not return the monies on realising her mistake) and it stated (relevantly); The Society had to extend a considerable degree of effort to ensure that the Respondent repaid the funds. For example, see the e-mail trail at annexures "D", "E", "F" and "G" to Ms Foord's Affidavit and annexures "E", "F", "G", "H", "I", "J" and "K" of the Affidavit of Mr Savage. The funds were not repaid until 27 August 20124 and only after considerable correspondence to and from the Society. Contrary to her assertion there was no immediacy from the Respondent with regard to the nature of the funds. As for the Respondent's knowledge of the nature of the funds – her e-mails are entirely inconsistent – for example, the Respondent's e-mail at page 15 of Mr Savage's Affidavit is entirely inconsistent with Mr Savage's email to her of 4 October 2013 (page 6) when she was queried as to the existence of any controlled money account. Unfortunately, the Tribunal will not be able to hear from the Respondent on these issues and will necessarily have to form its own view on the facts solely on the documents. It also submitted that the solicitor's 'self-reporting' cannot be challenged because she did not file any evidence in the proceedings. 1. The Society argued that the solicitor's conduct is properly regarded as professional misconduct, as defined in s 497 of the Act. This provides (relevantly): (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. Further, s 498 of the Act provides: 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, 1. The Society stated that as the statutory definition is "inclusive", it is necessary to look to the common law for guidance and that the common law concept of professional misconduct includes conduct in the pursuit of professional activities that would reasonably be regarded as disgraceful or dishonourable by professional colleagues of good repute and competency (see The Council of the New South Wales Bar Association v Sahade [2007] NSWCA 145 at [54] (per Basten JA) which notes the adoption for legal practitioners of the test propounded in Allinson v General Council of Medical Education and Registration [1894] 1 QB 750 at 763 for medical practitioners). 2. Further, in Council of the New South Wales Bar Association v Asuzu [2011] NSWADT 209 at para 34, the Administrative Decisions Tribunal stated: In Allinson v General Council of Medical Education and Registration Lopes LJ put it thus: If it is shown that a medical man, in the pursuit of his profession, has done something with regard to it which would be reasonably regarded as disgraceful and dishonourable by his professional brethren of good repute and competency, then it is open to the General Medical Council to say that he has been guilty of "infamous conduct in a professional respect". 1. The Society also relied upon the decision of McClellan CJ at CL in Bechara v Legal Services Commissioner [2010] NSWCA 369 at [44]: 44 As Clyne made plain, there are no fixed categories of professional misconduct. Much depends on whether the conduct falls outside "generally accepted standard[s] of common decency and common fairness". Previous examples of professional misconduct have included wilfully misleading the court (New South Wales Bar Assn v Livesey [1982] 2 NSWLR 231); removing documents in contravention of a court order (Howes v Law Society of the Australian Capital Territory (Supreme Court of ACT, Gallop ACJ, Higgins and Crispin JJ, 23 July 1998, Unreported); permitting conflicts of interest to arise (Law Society of New South Wales v Moulton [1981] 2 NSWLR 736); failing to account for money received (Re Walker; Ex parte Kemp (1887) 3 WN (NSW) 123); misleading a client (Hoshott v Council of the Law Society of New South Wales (Supreme Court of NSW, Meagher, Sheller and Stein JJA, 17 December 1997, Unreported); gross neglect and delay (Legal Practitioners Conduct Board v Hay [2001] SASC 322; (2001) 83 SASR 454); failing to adequately supervise an unqualified clerk (Law Society of New South Wales v Foreman (1991) 24 NSWLR 238); breaching an undertaking given to another lawyer (Wade v Licardy (1993) 33 NSWLR 1); and, in certain situations, criminal and/or personal misconduct (Ziems v Prothonotary of the Supreme Court of New South Wales (1957) 97 CLR 279). 1. Further, in Kennedy v The Council of the Incorporated Law Institute of New South Wales (1939) 13 ALJR 563 (per Rich J) the High Court stated: A charge of misconduct as relating to a solicitor need not fall within any legal definition of wrongdoing. It need not amount to an offence under the law. It was enough that it amounted to grave impropriety affecting his professional character and was indicative of a failure either to understand or to practise the precepts of honesty or fair dealing in relation to the courts, his clients or the public. The particular transaction the subject of the charge must be judged as a whole and the conclusion whether it betokened unfitness to be held out by the court as a member of a profession in whom confidence could be placed, or on the other hand, although a lapse of propriety, was not inconsistent with general professional fitness and habitual adherence to moral standards, was to be reached by the general survey of the whole transaction." 1. The solicitor conceded that she breached s 255 of the Act. The Society submitted that this provision confirms the principles stated by the Courts over the years, namely the need to receive, maintain and disburse funds solely in accordance with the client's instructions. 2. In relation to the allegation of misappropriation, the Society argued that despite the solicitor's protestations to the contrary, she made use of a client's funds. She accepted that she transferred an amount of $126,000 from a controlled monies trust account to an account that she controlled. This is evidence of misappropriation at common law and it is by far the most serious allegation against her, as the proper use of client funds remains fundamental to a Solicitor's fitness to practice on an unrestricted basis (see: Dupal v Law Society of New South Wales [1990] NSWCA 56 at 60 per Kirby P and at 64 per Handley JA). 3. Further, in Law Society of New South Wales v Jones [unreported Court of Appeal (NSW) 37 July 1978] Street CJ held: Reliability and integrity in the handling of trust funds are fundamental pre-requisites in determining whether an individual is a fit and proper person to be entrusted with the responsibilities belonging to a solicitor. … Members of the public, many of them wholly inexperienced and unskilled in matters of business or of law, inevitably must put great faith and trust in the honesty of solicitors in the handling of moneys on their behalf. The Court must ensure that this trust is not misplaced. 1. While the Solicitor asserts in her Reply that she transferred the relevant funds by mistake and that she repaid the monies as soon as possible after she became aware of her mistake, the Society noted that she did not actually repay the monies until 6 weeks later (she transferred the funds out of the controlled monies account on 11 July 2014 and did not return them until 27 August 2014). It argued that the transfer of the controlled monies was done 'with intent' and that there is no evidence before the Tribunal that supports a finding that the transfer itself was either accidental or the result of a mistake. It stated that if the Solicitor wishes to prove that her conduct was not intentional, she should give evidence on this matter under oath. 2. The Society also referred to the decision in Brereton v Legal Services Commissioner [2010] VSC 378, per Bell J, who determined (relevantly): 24. There is a difficulty in the drafting of charges 4 and 5. On the conduct particularised, charge 4 alleges statutory misconduct constituted by 'wilful or reckless' contravention of s 174(3) of the Legal Practice Act. The state of mind alleged, rightly, is wilfulness or recklessness. Dishonesty is neither alleged nor necessary for that charge. On the same conduct, charge 5 alleges common law misconduct because Mr Brereton 'misappropriated trust moneys'. No state of mind is expressly alleged. Dishonesty is a necessary element of that charge. Wilful or reckless disregard is not sufficient. I think the tribunal erred with respect to charge 5 mainly because it failed to appreciate this distinction. 1. The decision in Brereton was considered by the Administrative Decisions Tribunal in Council of the Law Society of New South Wales v Clapin [2011] NSWADT 83, as follows: 226. Mr Lynch placed strong reliance on dicta in Brereton v Legal Services Commissioner [2010] VSC 378 to the effect that 'dishonesty' is a 'necessary element' in any charge of misappropriation (see the judgment of Bell J at [24], [31 - 33] and [47 - 59]). Having regard to these dicta and to our decision, explained above at [214 - 215], not to infer that the Solicitor's breaches of the statutory requirements occurred with full knowledge of the content of those requirements, we conclude that in this instance the necessary element of dishonesty was not made out. So to conclude is not, however, to suggest that the Solicitor's conduct in this and other similar cases was not seriously improper. 1. This Tribunal also considered Brereton in the matter of Law Society of NSW v Shehadie [2016] NSWCATOD 46, as follows: 34. There was some debate as to what is meant by 'misappropriation', and whether, in particular, the term carries a connotation of dishonesty or purposeful misuse. The Macquarie Dictionary (4th ed. 2005) definition of 'misappropriate' is '1.to put to a wrong use. 2. To apply wrongfully or dishonestly to one's own use, as funds entrusted to one.' It will be seen that the first meaning merely speaks of an act where a thing is put to a 'wrong use', whereas the second focuses on use for one's own benefit, and introduces expressly the element of dishonesty. 35. It is accepted that the legal meaning of misappropriation carries the connotation of a wrongful, dishonest use. Further in disciplinary proceedings of the present kind, it is accepted that the prosecutor must show that the respondent knowingly engaged in the conduct of concern, and that the conduct was dishonest. There has been debate as to whether the prosecutor must show that the respondent knew that the conduct in which he or she had intentionally engaged was dishonest, or is it enough to show that regardless of his or her belief in that regard, it would be regarded as dishonest, viewed objectively. 36. In Brereton v Legal Services Commissioner [2010] VSC 378 Bell J examined closely what is required by way of proof of dishonesty in a misappropriation case. His Honour emphasised that the general law (both civil and criminal) in dealing with proof of dishonesty does not go so far as to require that the defendant knew at the time of the conduct that what he did was dishonest. Proof of 'subjective' dishonesty in that sense is not required. Bell J said (some footnotes omitted): 53 While an allegation of dishonesty requires consideration of the person's mental state, in neither the criminal nor the civil context is it necessary to establish that the person subjectively knew or believed that the actions concerned were dishonest. What must be established is that the person subjectively intended to do the acts which are said to be objectively dishonest by the ordinary standards of reasonable and honest people. Thus the course to be adopted in determining whether conduct is dishonest was explained by Toohey and Gaudron JJ in Peters v R [1998] HCA 7; (1998) 192 CLR 493] as follows [503-504]: In a case in which it is necessary for a jury to decide whether an act is dishonest, the proper course is for the trial judge to identify the knowledge, belief or intent which is said to render that act dishonest and to instruct the jury to decide whether the accused had that knowledge, belief or intent and, if so, to determine whether, on that account, the act was dishonest ... If the question is whether the act was dishonest according to ordinary notions, it is sufficient that the jury be instructed that that is to be decided by the standards of ordinary, decent people. 54 The steps involved in this formulation are: (1) identify the knowledge, belief or intent which is said to render the acts dishonest; (2) determine whether the accused (or defendant in the civil context) subjectively had that knowledge, belief or intent; and (3) determine whether, on that account, the acts were objectively dishonest according to the standards of ordinary and decent (that is reasonable and honest) people. 55 When applying these principles in a civil case, the civil standard of proof on the balance of probabilities applies. Of course, where the allegation in a civil case is of misappropriation, a high standard of probability is required, due to the gravity of the allegation. (Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336, 361-363 per Dixon J). In a criminal case, the criminal standard of proof beyond reasonable doubt applies. 37. In disciplinary proceeding of the present kind, therefore, the three steps to which Toohey and Gaudron JJ refer, and reiterated by Bell J at para [54] apply. It will be seen that those steps draw a clear distinction between the understanding of the defendant when engaging in the conduct and the characterisation of that understanding. Commonly, evidence will establish a state of knowledge, belief or intent in relation to the conduct under notice, and the issue will then be (step three) whether the proven state of understanding can fairly and properly be found to be dishonest. In making that finding the tribunal of fact will look at the totality of the evidence, and apply the standards of the community to what has been put to it by the defendant in that regard. 38. The Tribunal recently approved and adopted Bell J's analysis in Council of the Law Society of NSW v Coombes [2015] NSWCATOD 108 at [36]- [43], and described the approach to be adopted as follows: We will therefore proceed on the basis that we need first consider whether the Solicitor intended to do the acts which are the subject to (sic) the complaint and secondly whether ordinary and decent people would regard these acts as dishonest. It will be seen that the Tribunal conflated the first two steps set out by Bell J at [54] of his reasons, and described his third step as the second matter to be considered. 1. The Society also referred to the decision in Council of the Law Society of New South Wales v Bharati [2010] NSWADT 159 (and the cases cited in that decision) as authority for the proposition that not every case of misappropriation will necessarily lead to the removal of the practitioner's name from the Roll. Even if the solicitor did not act dishonestly, she is nevertheless guilty of a "technical-type" misappropriation such as that found in Brereton. 2. In relation to the issue of the Solicitor's state of mind when the misappropriation occurred, the Society submitted that it is open to the Tribunal to draw an inference in accordance with the rule in Jones v Dunkel that the Solicitor's evidence on this issue would not assist her. While we note that the Solicitor objected to the Tribunal drawing any inferences regarding her state of mind on the ground that the Application does not particularise any complaint to that effect, the Society argued that we may draw such an inference as the Solicitor has had every opportunity to testify on this issue and she has not done so. 3. The Solicitor admitted that she practised without an appropriate Practising Certificate and without professional indemnity Insurance. In relation to these matters, the Society submitted that the Courts and Tribunals have had much to say about the need for practitioners to practise within the terms of their practising certificates because of the special protection afforded to the public by virtue of their holding same (see Council of the NSW Bar Association v Perry [2007] NSWCA 111 at [20] per Mason P (Hodgson and Santow JJA agreeing). 4. The issue of an annual practising certificate is not a mere formality or a device for raising revenue, but involves the protection of the public (see Mee Ling V Law Society of New South Wales [1974] 1 NSWLR 490 at 497E per Hardie JA, at 498D-E and 499F-G per Reynolds JA. See also Supreme Court of New South Wales v McCaffery [2004] NSWCA 470 and Council of the New South Wales Bar Association v Costigan [2013] NSWCA 407). The decision in Mee Ling was considered in the matter of Ian Alexander McKnight (Solicitors' Statutory Committee – 3 December 1984) as follows: …As was stated by Reynolds JA in Mee Ling V The Law Society of NSW… at 498: The legislative scheme makes it clear that protection of the public is involved. Section 67 prohibits a solicitor from Practising unless he/she has in force a Practising Certificate and he/she complies with any conditions subject to which the certificate has been issued. In the present case the solicitor practiced on his own account, albeit in only three instances, contrary to the condition to which his certificate… was issued, namely, that the solicitor not engage in practice on his own account. That was in defiance of a law designed to protect the public. In the words of Reynolds JA… Whether the plain statutory words are applied to his conduct or whether it is asked of a solicitor of good repute would regard the conduct as dishonorable, the conclusion in this case is the same. The Committee also specifically noted that in the UK conduct of this nature has been found to amount to professional misconduct. 1. Further, maintenance of Professional Indemnity Insurance is not only a statutory requirement (see Part 3.3 and s 406 of the Act) but also provides additional protection to the public with whom the practitioner may deal. 2. In relation to the issue of penalty, the Society submitted that the Tribunal's role is protective and not punitive. It referred to the decision in Law Society of New South Wales v Bannister (1993) 4 LPDR 24 at 28 per Sheller JA: (a) An order for removal from the roll is not punitive but protective. Accordingly, it is no answer for the practitioner who has been convicted and punished by the criminal law to say that he or she has already been punished for conduct which shows unfitness. (b) The Court's supervisory jurisdiction goes beyond protecting the public by incapacitation of the recalcitrant practitioner. The jurisdiction aims generally to maintain and encourage appropriate standards of professional behaviour. 'The maintenance of such standards involves deterring the offender from repeating the offence and deterring others who might be tempted to offend.' [Emphasis added] (c) 'The normal consequences of the misappropriation by a solicitor of a client's money is that his name be removed from the roll. In Ex parte Macaulay (1930) 30 SR(NSW) 193 at 194 Street CJ said that where a solicitor has been proved guilty of theft he should not, unless in very exceptional circumstances, ever be allowed again to be held out to the public as a solicitor in whom confidence might be reposed; compare Ex parte Lenehan (1948) 77 CLR 403 at 422: This is not only to protect the public in need of assistance in managing their affairs from reposing confidence in the person concerned on the basis that he is a solicitor but also to deter others from behaving in the same way in the future.' 1. The Tribunal's role is both protective and consistently educative 'publicly marking the seriousness of what the instant solicitor has done" (see Law Society of New South Wales v Foreman (No 2) (1994) 34 NSWLR 408 at 441. Further, in Law Society of New South Wales v Walsh [1997] NSWCA 185, it was said that the Court's duty to protect the public is not confined to the protection of the public against further misconduct by the particular practitioner who is the subject of disciplinary proceedings. It also extends to protecting the public from similar defaults by other practitioners. 2. As a result, it is necessary to consider the effect that the orders sought would have upon the public understanding of the profession and the public as to the standard of behavior required of legal practitioners as well as their effect upon the solicitor in this matter. The Tribunal must also give due and proper weight to the views of the Society (see re Clayton (1961) SR 132). 3. In the current matter, the orders sought by the Society make appropriate allowance for the various medical issues that the Solicitor has raised while also giving proper weight to the Courts' comments regarding the purposes of orders made in disciplinary matters. They are based upon the consideration of the duration of the solicitor's mental health issues and are aimed at protecting the public and providing her with the support and supervision that she will need in order to continue practising law. 4. While this is not a 'consent jurisdiction', the Society argued that the Tribunal will be assisted by the fact that the Reply indicates that the solicitor 'consents' to Orders 1 and 2 and that she also consents to Order 3 (subject to the period of the proposed order being reduced from 5 years to 12 months). It concluded that having regard to the available evidence and the cited dicta, the orders sought in the Application are appropriate. The Solicitor's Submissions 1. The Solicitor submitted that at the time the relevant conduct occurred she was suffering from an inadequately treated depression spectrum disorder and hypothyroidism. However, she is now receiving appropriate treatment for those conditions and it is common ground between the parties that subject to submitting a psychiatrist's report to the effect that she is fit to practise law, the solicitor should be issued a Practising Certificate subject to certain conditions. The proposed conditions are also common ground although there is dispute concerning the period over which they should apply. 2. The solicitor disputes three matters, namely: 1. She should be found to have engaged in unsatisfactory professional conduct and not professional misconduct, based upon the definitions in s 496 and s 497 of the Act. 2. The conditions on her Practising Certificate should be imposed for a period of 12 months and not 5 years; and 3. She disputes that she should have to pay the Society's costs. 1. The solicitor submitted that the Society does not allege that she acted dishonesty, recklessness or with any improper motive and/or that she inappropriately delayed repaying the trust moneys when 'her error in transferring the money to herself' was discovered. It also does not allege that she failed to respond accurately and honestly to its correspondence and investigation and it has never asserted that her responses (made through her solicitors) were anything other than accurate and fulsome. The applicant tendered those responses as part of its case (they are annexed to Ms Foord's affidavit) and it has never challenged her personal statement of contrition and her explanation of the mistakes she made (see: page 14 of Ms Foord's Affidavit). 2. The Solicitor submitted that it is well known that allegations against the respondent must be specifically identified and the respondent must be afforded a proper opportunity to meet that allegation (see Smith v New South Wales Bar Association (1992) 176 CLR 256 at 270 per Deane J; to similar effect O'Reilly v Law Society of New South Wales (1988) 24 NSWLR 204 at 211 per Kirby J, at 224-5 per Clarke JA (and the cases cited by Clarke JA). The solicitor has submitted that the facts recited in the particulars of the Application and the orders sought by the Society are inconsistent with alleging conscious impropriety or any conscious failure to comply with its directions. She also submitted (relevantly): …Contrary to the complaint appearing for the first time in the applicant's written submissions (pages 5 to 6), there is no occasion for the respondent to give oral evidence. Nor does the respondent have to explain the period from 25 to 27 August 2014. She is not meeting any case alleging undue delay: see particulars A.5 to A.7. the Applicant's submission to the contrary should be disregarded. 1. The solicitor stated that she made two serious mistakes: 1. She 'mistakenly transferred' $126,000 from a controlled moneys account of a law practice that she had controlled of and had resigned from to a personal account; and 2. On 2 instances she engaged in practice without a Practising Certificate or professional indemnity insurance. However, the Tribunal should accept the factual background to these mistakes, which are set out at length in her solicitors' letter dated 23 December 2014 (see pages 28 to 34 (inclusive) of Ms Foord's Affidavit). The Society has not alleged that this conduct was deliberate or reckless and Dr Phillips' report proves that her mistakes were the result of her inadequately treated thyroid condition. 1. In response to the Society's criticism of Dr Phillips' report, the Solicitor stated that the Society did not request that the doctor be made available for cross-examination and that it did not lead any evidence in response or challenge his qualifications. Its criticism appears to be two-fold and both parts of this criticism are wrong. She stated (relevantly): First, the applicant criticises Associate Professor Phillips' opinion because he expresses an opinion based on the balance of probabilities and because he does not "unequivocally associate the conduct with any manifestation of that illness". That criticism is misplaced. The respondent does not have an onus at all, or an onus to prove facts other than on the balance of probabilities. Further, Associate Professor Phillips' language is appropriate and qualified. Opinion is rarely – and certainly not in this field – capable of being expressed as a matter of unyielding certainty. Criticism might have been appropriate had Associate Professor Phillips expressed an opinion in intractable and unequivocal terms. He did not. Instead he has carefully and thoroughly expressed the reasons for his opinion based on his expertise. Second, the applicant criticizes Associate Professor Phillips' opinion because it is based on self-reporting by the respondent, which is said, for the first time in written submissions, to be incorrect and unable to be challenged. There are a number of significant flaws in that criticism. One is that the opinion of a clinical psychiatrist is based on self-reporting whenever that is possible. Another reason is that the criticism is based on an erroneous assessment of Associate Professor Phillips' reasoning. His reasoning at paragraphs 30 and following is based on observation, testing and objective facts. His reasoning does not have the limitations suggested by the applicant. The Solicitor concluded that the Society's criticisms of Associate Professor Phillips' report are misplaced and that his report should be accepted. 1. In his oral submissions, Mr Giles SC stated that the Solicitor has consulted Dr Mark Shillito, consultant psychiatrist, for the past 12 months and that she sees him every 8 weeks. She is also receiving treatment for her thyroid condition from Professor Boyages, endocrinologist. He also referred to the report from Dr Glinka, psychiatrist, dated 22 December 2014. Dr Glinka reported that by 2000, the Solicitor suffered from Anxiety Disorder and Dysthymic Depressive Disorder (ADADDD) that manifested in low and sad mood, irritability with low self-esteem and very low confidence, lack of drive, low zest for living, easy fatigability. Attention and short term memory and social and emotion function deteriorated. Dr Glinka opined that from mid-2000 until mid-2012, the solicitor functioned well as her medication (including Thyroxine) relieved her symptoms, but that in late-2012 the general practitioner removed Thyroxine, which meant that the anti-depressant medication was less effective. She stated (relevantly): …The symptoms of failing to pay proper attention and fatigue in my opinion led or likely significantly contributed to her error. She also felt a real sense of failure and loss of esteem as a result of her working with John Mahony. The latter feeling exacerbated the effect of the former. In my opinion with the appropriate medication which I have prescribed and monitoring by Cate's local GP she will again be able to operate as a mother and a lawyer satisfactorily and without experiencing the effects of the ADADDD which in my opinion caused her to fail or likely significantly contributed to her failure, to pay proper regard to her work in not making proper inquiry before transferring the moneys (the subject of the complaint) and not noticing that her Practising certificate details (the subject of the complaint) had changed… 1. Mr Giles SC submitted that when the Solicitor applied late for a Practising Certificate (as an employed solicitor) in 2013, she was affected by her medical conditions. 2. In relation to the allegation of misappropriation, the Solicitor argued that nothing more than a "technical breach" has been particularised by the Society and that she has not come to the Tribunal to meet a case of dishonesty. She argued that she did not appreciate that the relevant account was a controlled money account and that the funds did not belong to her husband. 3. The Solicitor argued that her conduct should properly be considered unsatisfactory professional conduct, which is defined in s 496 of the Act as including "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". However, the Solicitor argued that her conduct does not constitute professional misconduct, which is defined in s 497 (1) of the Act (see: para 29 above). 4. The Solicitor conceded that she should be reprimanded. However, she argued that based upon Dr Phillips' report, the proposed conditions on her Practising Certificate should not be imposed for a period of more than 12 months and that the public will be protected by an order to that effect. She relied upon her written submissions in relation to the issue of costs. The Society's Submissions in Reply 1. Mr Johnson argued that the solicitor's submission that there is no cause for her to present herself to give evidence in relation to her state of mind when the conduct occurred because the Application did not allege that she acted dishonestly was not a proper submission for the Solicitor to make and that it is inconsistent with what she said in her Reply. If she genuinely believes that dishonesty was not asserted, why did she expressly dispute that she intended to misappropriate the controlled monies? She is not taken by surprise in relation to this issue and she is able to answer it. If she believed that her state of mind is not relevant, why did she lodge a report from Dr Phillips that expressly deals with the issue of her state of mind? She has not presented herself to give evidence and cannot answer the proposition that a person suffering from a cognitive impairment could have acted dishonestly. 2. In Brereton, Bell J specifically raises "state of mind" as an element of misappropriation and in this matter, the Tribunal is missing the best evidence regarding this issue, that is the Solicitor's own evidence. It is not for the Tribunal to ascertain the Solicitor's state of mind based upon documents that were generated during the course of the investigation of the complaint. Further, the fact remains that Dr Phillips based his opinions and conclusions on the Solicitor's self-reporting that she made a mistake and there is no evidence from her upon which the Tribunal can safely draw that conclusion. Consideration 1. In our view, the solicitor was not properly attending to her professional duties during 2013 and 2014. This is clearly evidenced by her failure to take out professional indemnity insurance for a period of about 13 months (from 1 July 2013 to 25 August 2014 (inclusive)) and issues concerning her Practising Certificates. 2. We note that the Solicitor did not hold a Practising Certificate from 1 July 2013 to 4 August 2013, but she continued to practise during that period. From 5 August 2013 to 30 June 2014, she held only an unrestricted non-principal Practising Certificate, which did not entitle her to practise as a principal of a law practice, but she continued to practise contrary to the conditions of her certificate until 9 December 2013. 3. In relation to ground 2 of the Application, we note that the Reply indicates that the Solicitor admits the facts as particularised in the Application, but her history to Dr Phillips regarding this issue does not support that admission. We note that the Solicitor told Dr Phillips that she believed that she completed an application for the proper type of Practising Certificate and that the Society mistakenly issued her with the incorrect type of certificate. However, she has not filed any evidence (such as a copy of the Renewal) in support of her report to Dr Phillips. She did concede, and in our view properly so, that she failed to check the certificate to ensure that it was correct. Nevertheless, the Solicitor failed to provide any testimony to support her claims of confusion. 4. The Solicitor did not hold any Practising Certificate from 1 July 2014 to 25 August 2014. We note that the Society brought this to the Solicitor's attention in an email from Mr Pierotti dated 26 August 2014. He stated (relevantly): …I note your advices that you were out of your office with clients – I take it that you are now conducting a business unrelated to law as our records indicate that you do not presently hold a Practising Certificate. 1. The Solicitor responded to that email, on 26 August 2014, to which she attached a copy of a Renewal of Practising Certificate (unrestricted non-principal) dated 11 June 2014, and stated (relevantly): … Attached is a form dated 11 June 2014 for renewal which appears to have been overlooked. I have been in contact with Clarisse Abad if your office and was informed that an application for a new certificate had to be processed… The face of the Renewal indicates that the closing date was 15 May 2014. 1. Mr Pierotti sent the Solicitor a further email on 26 August 2014, (relevantly): …Further, I note from your email correspondence to Mr Savage that you continue to hold yourself out as a Solicitor. The Society, on my enquiries, does not yet have any application for a Practising Certificate [for the year 2014-15] from you. You must not hold yourself out as a Solicitor or undertake legal work until a Practising Certificate has issued and appropriate professional indemnity insurance is in place… That day the Solicitor replied by email as follows: I have again forwarded the application for the Practising Certificate to your office. I can only assume that it has not been processed, a matter which is not in my control… 1. Mr Pierotti sent the Solicitor a further email on 26 August 2014, as follows: Thank you for your e-mail. The Practising Certificate is entirely your responsibility. You must ensure its delivery to the Society with the necessary fees. Until any Certificate is issued, you remain unable to practice … That day the Solicitor replied by email (relevantly): I refer to your email dated 26 August 2014 and object to its tone. … It would appear that my livelihood as a solicitor is dependent on the processing and delivery of a document by your office. I await completion of the process… 1. In our view, the Solicitor's emails to Mr Pierotti dated 26 August 2014, indicate that she did not accept that it was her professional responsibility to ensure that she applied for and obtained the proper Practising Certificates. 2. It is also necessary to determine the weight that should be given to Dr Phillips' opinions. In relation to this issue, we refer to the decision in South Western Sydney Area Health Service v Edmonds [2007] NSWCA 16, in which McColl JA said: 130 In Hevi Lift (PNG) Ltd v Etherington at [84] I said (Mason P and Beazley JA agreeing) that "[a] court should not act upon an expert opinion the basis for which is not explained by the witness expressing it". In so saying, I referred with approval (inter alia) to Heydon JA's analysis of the admissibility of expert evidence in Makita (Australia) Pty Limited v Sprowles (at [59] – [82]). In that case (at [59]) Heydon JA cited with apparent approval Lord President Cooper's statement in Davie v The Lord Provost, Magistrates and Councillors of the City of Edinburgh (1953) SC 34 at 39-40 that: "… the bare ipse dixit of a scientist, however eminent, upon the issue in controversy, will normally carry little weight, for it cannot be tested by cross-examination nor independently appraised, and the parties have invoked the decision of a judicial tribunal and not an oracular pronouncement by an expert." In other words, it is necessary to determine whether Dr Phillips' opinions concerning the solicitor's medical conditions and her state of mind at the relevant time go beyond "a bare ipse dixit". 1. While the Application does not allege that the solicitor obfuscated in returning the controlled monies, the issue of delay is relevant as the Solicitor specifically told Dr Phillips that she returned the monies 'upon realising her mistake'. The doctor placed a great deal of significance on this assertion in expressing his opinion. However, the email trail between the Society and the Solicitor (annexed to Miss Foord's Affidavit) indicate that the Society expended considerable effort in securing the return of the monies and that the Solicitor did not return them until 27 August 2014. 2. As a result of the solicitor's decision not to give evidence, it is not possible to test the facts and circumstances upon which Dr Phillips placed considerable reliance in expressing the expert opinion upon which the Solicitor relies. We have therefore decided (based upon the principle expressed in Makita (Australia) Pty Limited v Sprowles) that Dr Phillips' report is of only limited assistance only in determining the substantive issues in this matter. 3. It follows that the solicitor's decision not to give evidence has adverse consequences (from her point of view) and we concur with the comments made by the Administrative Decisions Tribunal in Council of the Law Society of NSW v Hancock (No 2) [2013] NSWADT 180 (relevantly): 38. The Solicitor's choice not to testify at the first hearing of this matter had the adverse consequences (from his point of view) that the Court of Appeal described in Council of the New South Wales Bar Association V Power [2008] NSWCA 135; (2008) 71 NSWLR 451 at [16 - 17]. In this passage, the Court quoted at length from its judgments in Health Care Complaints Commissioner v Wingate (2007) 70 NSWLR 323 at [42 - 48] and NSW Bar Association v Meakes [2006] NSWCA 340 at [70 - 78]. 39. Within the passage reproduced from Wingate, the Court quoted a passage from Re Veron; Ex parte Law Society of New South Wales [1966] 1 NSWR 511 at 515 that was directly in point: The respondent is an officer of the court. The Full Court of the Supreme Court held in November 1965 that on the material presented to it by the Law Society a prima facie case of misconduct was made out and called upon the respondent to show cause why he should not be dealt with. The matter arises within the disciplinary jurisdiction of the Court and if the respondent after consideration declines to give his account on oath of the matters charged he cannot complain if the Court holds against him that the facts as deposed to ... are substantially true ... The jurisdiction is a special one and it is not open to the respondent when called upon to show cause, as an officer of the Court, to lie by and to engage in a battle of tactics, as was the case here, and to endeavour to meet the charges by mere argument. 40. In Meakes, the following passage in the judgment of Tobias JA (at [70]) was also of immediate relevance: [70] In my opinion, the Tribunal also erred in declining to criticise the respondent's decision not to give sworn evidence at the hearing. It is true that in professional disciplinary proceedings the onus of proving misconduct lies with the party bringing the charges and, it should be noted, a practitioner is not required to give evidence. However, as this Court observed in Coe v NSW Bar Association [2000] NSWCA 13, there is an expectation that legal practitioners will mount the witness box to provide some explanation as to their conduct, rather than simply relying upon evidence from the Bar table. In Coe, Meagher JA (at [21]), with the agreement of Priestley JA, repeated with approval the following observations made by the Tribunal in that case and which are apposite to the present case: In the circumstances where a prima facie [case] against a legal practitioner has been presented and where the practitioner wishes the Tribunal to accept an explanation as to how the conduct came about it is inappropriate and irregular for the legal practitioner to attempt to do so through submission from the Bar table. If he wishes the Tribunal to accept some explanation as to how the conduct came to take place, then in our view he has an obligation to meet the situation by explanation on oath. 41. As these authorities demonstrated, the Solicitor, by not giving evidence, deprived himself of the opportunity to put forward an innocent explanation for his conduct. He could not, for instance, maintain that it was 'all a mistake'. The Tribunal was in fact left without any indication as to why he engaged in this conduct. 1. Based upon a consideration of all of the available evidence, we are satisfied that all 3 grounds of the Application have been made out. 2. In relation to the allegation of misappropriation, we are satisfied that the Solicitor failed to clarify the nature of the monies in the relevant account before she transferred them to a personal account. There is no allegation that she acted dishonesty and we make no finding to that effect. However, we do not accept that her transfer of the monies was anything other than an intentional act. It follows that she is guilty of misappropriation. 3. We are satisfied that the solicitor's conduct is properly considered as professional misconduct, as defined in s 497 of the Act and at common law. We consider that her conduct in misappropriating controlled monies and practising without an appropriate Practising Certificate and professional indemnity insurance would reasonably be regarded as disgraceful or dishonourable by professional colleagues of good repute and competency. Orders as to Penalty 1. We accept that the Tribunal's role is protective and educative rather than punitive. On that basis, we are satisfied that the Solicitor's conduct requires a reprimand. 2. In relation to the issue of a Practising Certificate (including renewal), we are concerned about the absence of any current medical evidence regarding the solicitor's current medical conditions. In particular, we note that Dr Phillips' medico-legal report is approximately 9 months old and that there is no evidence before us from her treating psychiatrist or endocrinologist. As a result, it is difficult to be satisfied that the difficulties that beset her are now behind her and that she is currently fit to resume the practice of law. 3. For these reasons, we are satisfied that it is appropriate to make an order than no Practising Certificate (including renewal) be issued to the Solicitor until she has produced a report from a psychiatrist to the Society that confirms that she is fit to practise and if so, on what basis. That psychiatrist is to be nominated by the Solicitor and agreed to by the Society and must not be related to the Solicitor by marriage, family or other pre-existing association or connection. The Solicitor is to bear the costs of the report. 4. In addition, we are satisfied that it is appropriate to order that for a period of 2 years after the solicitor is issued with a Practising Certificate, she is: 1. To be issued with a Practising Certificate entitling her to practise only as an employed solicitor; 2. To be supervised by a law practice (including any unrestricted principal(s) charged with supervising her) not connected with her by marriage, family or other pre-existing association or connection; 3. To notify her employer of the conditions imposed on her Practising Certificate; and 4. Each 6 months after the grant or renewal of a Practising Certificate, she is to provide to the Society a further report from the psychiatrist that confirms that she remains fit to practise and on what, if any, basis. She is to bear the cost of these reports. 1. Taking into consideration the nature of the misconduct, which includes misappropriation of monies, the penalty imposed by the Tribunal may appear to be very lenient. However, as is recognised by the Society, medical issues seem have contributed to the events leading to such conduct, and the facts are highly unusual. These factors have weighed heavily in the Tribunal's determination. For these reasons, this decision does not establish any precedent in respect of penalty for misappropriation misconduct generally. Costs 1. The Society seeks an order for costs against the Solicitor. However, the Solicitor disputes the making of that order. 2. We note that s 60 of the Civil and Administrative Decisions Tribunal Act 2013 (No 2) ("the CAT Act") provides (relevantly): 60 Costs (1) Each party to proceedings in the Tribunal is to pay the party's own costs. The Tribunal may award costs in relation to proceedings before it only if it is satisfied that there are special circumstances warranting an award of costs. … (5) In this section: costs include: (a) the costs of, or incidental to, proceedings in the Tribunal, and (b) the costs of, or incidental to, the proceedings giving rise to the application or appeal, as well as the costs of or incidental to the application or appeal. 1. However, Sch 5, cl 23 of the CAT Act provides: 23 Costs consequent of adverse conduct findings (1) Despite section 60 of this Act, the Tribunal must make orders requiring a respondent lawyer whom it has found to have engaged in unsatisfactory professional conduct or professional misconduct to pay costs (including costs of the Commissioner, a Council and the complainant), unless the Tribunal is satisfied that exceptional circumstances exist. (2) The Tribunal may make orders requiring a respondent lawyer whom it has not found to have engaged in unsatisfactory professional conduct or professional misconduct to pay costs (including costs of the Commissioner, a Council and the complainant), if satisfied that: (a) the sole or principal reason why the proceedings were commenced in the Tribunal was a failure of the lawyer to co-operate with the Commissioner or a Council, or (b) the lawyer has contravened an order of the Tribunal made in the course of the proceedings concerned, or (c) there is some other reason warranting the making of an order in the particular circumstances. (3) The Tribunal may make orders requiring payment of a respondent lawyer's costs from the Public Purpose Fund (within the meaning of the Legal Profession Uniform Law Application Act 2014), but may do so only if satisfied that the lawyer did not engage in unsatisfactory professional conduct or professional misconduct and the Tribunal considers that special circumstances warrant the making of the orders. The Tribunal is to have regard to the length and complexity of the proceedings when making a determination under this sub-clause. (4) The Tribunal may make orders requiring a respondent lawyer in respect of whom proceedings are pending before the Tribunal to pay costs on an interlocutory or interim basis. (5) The Tribunal may make orders requiring a person to pay costs (including, as appropriate, the costs of the Commissioner, a Council, the complainant and the respondent lawyer against whom the complaint was made), if satisfied that: (a) the person, whether before or during the proceedings, failed to produce or delayed in producing any document required or requested to be produced, and (b) the failure or delay contributed to delay in commencing, conducting or concluding the proceedings in such a way as to warrant the making of the orders. (6) The Tribunal may fix the amount of costs itself or order that the amount of costs be assessed by a costs assessor under the legal costs legislation (as defined in section 3A of the Legal Profession Uniform Law Application Act 2014). (7) An order for costs may specify the terms on which costs must be paid. 1. The Society argued that evidence of impairment as a result of a mental health issue is not "exceptional circumstances" for the purposes of sch 5, cl 23 (1) of the CAT Act and that while evidence of financial impecuniosity may constitute "exceptional circumstances" the solicitor has not filed any evidence of this. 2. The Solicitor submitted that R V Kelly (Edward) [2000] 1 QB 198 at 208 is authority for the proposition that exceptional circumstances means "circumstances which are out of the ordinary, or unusual, or special, or uncommon." This was accepted by the Administrative Decisions Tribunal in Council of the Law Society of New South Wales v Hinde [2011] NSWADT 20 at [33]. The Solicitor argued that there are three circumstances each of which, or in combination, satisfy the criteria for a finding of "exceptional circumstances", namely: 1. She has not had a practising certificate for almost 2 years, in circumstances where it is common ground that for over a year she should, subject to conditions, have had a certificate. As a result, she has been unable to earn an income by pursuing her chosen career; 2. There does not appear to have ever been a dispute (or any real dispute) about any fact. The conduct in question was the result of two errors that are explained by her "condition", which at the time was being treated in an inappropriate manner. That is her responsibility, but she was not "at culpable fault" for this and the orders proposed by the Society implicitly recognise this fact; and 3. The areas of disagreement over the orders are narrow, and in respect of which it should be held that she is correct. 1. We are not satisfied that the Solicitor has established the existence of "exceptional circumstances" in this matter. As we have determined that she is guilty of professional misconduct, we are satisfied that it is appropriate to order the Solicitor to pay the Society's costs as agreed or assessed. Orders 1. The Tribunal orders that: 1. The Solicitor be reprimanded. 2. No Practising Certificate (including renewal) should be issued to the Solicitor until she has produced to the Society a report from a psychiatrist confirming that she is fit to practise and if so, whether the Solicitor is fit to practise on her own account or only under supervision as an employed solicitor. The psychiatrist is to be nominated by the Solicitor and agreed to by the Society and must not be related to the Solicitor by marriage, family or other pre-existing association or connection. The costs of the report are to be borne by the Solicitor. 3. For a period of 2 years after the solicitor is issued with a Practising Certificate (following compliance with order 2 above), the Solicitor is: 1. To be issued with a Practising Certificate entitling her to practise only as an employed solicitor. 2. To be supervised by a law practice (including any unrestricted principal(s) charged with supervising her) not connected with her by marriage, family or other pre-existing association or connection. 3. To notify her employer of the conditions imposed on her Practising Certificate. 4. To provide to the Society each 6 months a further report from the psychiatrist that confirms that she remains fit to practise and on what, if any, basis. The cost of these reports are to be borne by the Solicitor. 1. The Solicitor is to pay the Society's costs as agreed or assessed. I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar 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 August 2016