Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Council of the Law Society of NSW v Herat [2016] NSWCATOD 116 Hearing dates: 21 June 2016 Date of orders: 02 September 2016 Decision date: 02 September 2016 Jurisdiction: Occupational Division Before: Cowdroy ADCJ, Principal Member D Fairlie, Senior Member M Bolt, General Member Decision: (1) That the solicitor be found guilty of professional misconduct for failing to comply with the three notices (the notices) issued to him on 1 December 2014, 21 May 2015 and 21 August 2015 pursuant to section 660 of the Legal Profession Act 2004 without reasonable excuse, and for failing to comply with the requirements of notification prescribed by s67 of such act: (2) That the solicitor be reprimanded for the failures referred to in order 1 above: (3) That in respect of the three notices, because the solicitor has responded to each notice to the satisfaction of the Law Society, such response is treated by the Tribunal as sufficient compliance and no further requirement or fine is to be imposed; (4) That the solicitor pay the costs of the Law Society of these proceedings. Catchwords: FINDING OF professional misconduct against solicitor – failure to respond to notices issued pursuant to section 660 of the Legal Profession Act 2004 – failing to comply with the requirements of s67 - consequential orders Legislation Cited: Legal Profession Act 2004 Civil and Administrative Tribunal Act 2013 Civil and Administrative Tribunal Act 2013 No 2 Cases Cited: NSW Bar Association v Howen (No2) [2003] NSWA DT235; Council of the Law Society of New South Wales v Truong (No2) [2015] NSW CA TOD 79 Law Society of New South Wales v Moulton [1981] 2 NSW LR 736 Category: Principal judgment Parties: Council of the Law Society of New South Wales (Applicant) Bruce Duleep Herat (Respondent) Representation: Solicitors: Council of the Law Society of New South Wales (Applicant in person) Bruce Duleep Herat (Respondent in person) File Number(s): 1520243 REASONS FOR DECISION 1. By Application For Disciplinary Findings And Orders the Council of the Law Society of New South Wales (the Council) seeks orders against the respondent, Bruce Duleep Herat, (the solicitor) namely: 1. The solicitor be reprimanded; 2. The solicitor be fined; 3. That no practising certificate be issued to the solicitor (and any practising certificate held by the solicitor be suspended) until such time as he has complied with the 3 notices issued to him on 1 December 2014, 12 May 2015 and 21 August 2015 issued pursuant to section 660 of the Legal Profession Act 2004 ("the act") 4. The solicitor pay the costs of the Society as agreed or assessed; 5. For any further or other order as to the Tribunal deems fit. Facts 1. There four matters which have given rise to these proceedings against the solicitor. It is convenient to deal with each matter separately. Notice dated 1 December 2014 1. On 4 August 2014 the applicant received a complaint that the solicitor had failed to pay an amount of $660 to a legal practice which specialises in court agency appearances on behalf of solicitors. It was alleged the solicitor instructed the complainant to appear on three court appearances namely on 9 March 2012, 23rd of March 2012 and second of July 2012. Despite attempts to obtain payment, no payment was forthcoming. 2. On 1 December 2014 a notice dated 5 November 2014 was served on the solicitor pursuant to section 660 of the act. On 23 December 2014 the solicitor responded seeking an extension of time due to personal issues. The solicitor sought an additional three weeks in which to respond. 3. On the same day the applicant responded stating that the terms of the legislation did not permit any extension. In response the solicitor provided the reasons for his inability to respond, namely the fact that due to traumatic incidents, namely that his son had been a hostage in the Lindt cafe siege, that his brother had been murdered, that his business partner had defrauded him, and that his marriage had failed, he was unable to respond. The applicant responded inviting information in respect of any "reasonable excuse" which the solicitor may have had so that consideration could be provided to it by the applicant under section 676(3) of the act which, in summary, provides that a respondent to such a notice was obliged to respond unless there was "reasonable excuse" for not doing so. Bankruptcy of Solicitor 1. The solicitor, on his own petition was declared bankrupt on 21 November 2014. 2. Section 67 of the act relevantly provides that the holder of a local practising certificate must provide written notice to the Council that an event has happened, within seven days after the event happening (see (2) (a)); and within 28 days after the happening of the event, to provide a written statement explaining why, despite the show cause event, the person considers himself or herself to be a fit and proper person to hold a local practising certificate. Significantly, (3) provides: "A contravention of subsection (2) is professional misconduct." 1. Section 4 of the act relevantly provides: "... presentation (as a debtor) of a Declaration to the Official Receiver Under Section 54 A of the Bankruptcy Act 1966 of the Commonwealth of his or her Intention to present a debtor's petition or his or her presentation (as a debtor) of such a petition under section 55 of that Act..." Is a show cause event. 1. The solicitor did not provide written notice or a statement in respect of the presentation of his debtor's petition as required by section 67 (2). Notice dated 12 May 2015 1. On the 15 December 2014 the applicant received a complaint from a former client of the solicitor that he had failed to repay to the client the sum of $880.00. On the 12 May 2015 a notice was issued to the Solicitor in respect of his failure to make such repayment (the second notice). Thereafter the Solicitor paid such amount. Notice dated 21 August 2015 1. On 26 May 2015 the applicant received a complaint that a firm which provided building inspection reports had not been paid by the solicitor. On 12 August 2015 a notice was issued pursuant to section 660 of the act in respect of allegations that the solicitor had failed to pay outstanding fees to a building consultant in the amount of $1813; that the solicitor had breached section 255 of the act; that the solicitor had misappropriated trust monies. 2. The amount owing was paid by the solicitor on or about 16 June 2015. Solicitor's response 1. The solicitor does not challenge any of the factual allegations against him. The solicitor readily admits that he has breached the provisions of section 660 of the act is referred to in the first notice; breached the requirements of section 67 of the act as alleged and has failed to comply with the notices However the solicitor submits that there are extenuating circumstances which should be taken into consideration. 2. This Tribunal has jurisdiction conferred upon it By the Civil and Administrative Tribunal Act 2013 and by any other legislation. These proceedings were commenced in the Tribunal under Part 4.8 of the act and were assigned to the Occupational Division of this Tribunal. 3. As there is no contest concerning the facts relating to the matters that have led to the issue of the three notices, and the breach of section 67 of the act, the Tribunal has given consideration to the circumstances referred to by the solicitor by way of explanation for his conduct. Whilst there is no medical evidence which suggests that the solicitor was mentally impaired by virtue of the events which he has described, the Tribunal accepts that the loss of a very close member of his family in tragic circumstances, and other family misfortunes, may have resulted in the solicitor being severely disturbed. The Tribunal is also prepared to accept that the default by his business partner which led the solicitor into financial hardship to meet the debts of the business exacerbated his condition. 4. The solicitor has been in legal practice since 20 December 1988, and whilst there some transgressions of a professional nature from 2009, none have any bearing on the matters now before the Tribunal. The Tribunal accepts that the financial difficulties experienced by the solicitor which occurred following the loss of his family member resulted in his bankruptcy which in turn led to the breakdown of his matrimonial situation. The Tribunal acknowledges the impact of these events as providing an explanation, but not an excuse, for the conduct complained of. 5. The Tribunal notes that each of the complaints from the public were withdrawn after the solicitor made the requisite payments or attended to his instructions. Essentially the remaining matter relates to his failure to notify the applicant under section 67 of the act of the presentation of his debtor's petition and also his failure, in respect of each complaint, to communicate with the applicant as required by section 660 of the act. As has been found, such failures constitute professional misconduct: see NSW Bar Association v Howen (No2) [2003] NSWA DT235; Council of the Law Society of New South Wales v Truong (No2) [2015] NSW CA TOD 79. The fact that the defects have been remedied by the solicitor which led to the issue of a notice is not an excuse: the obligation remained on the solicitor to comply with the notice, and such obligation was statutory and mandatory: see Law Society of New South Wales v Moulton [1981] 2 NSW LR 736 at 740-741. 6. As a legal practitioner, the solicitor was bound, by statute, to comply with the requirements of the act. He had many warnings but failed to comply with those warnings, and such conduct is explicable on the basis of the facts made known by the solicitor. The Tribunal is satisfied that the matters raised by the solicitor in amelioration constitute an explanation for his failure to comply with the notices, and his failure to comply with the obligation under s67 of the act. However, such conduct constitutes professional misconduct and the Tribunal considers that a reprimand is warranted. 7. At the date of the hearing, the solicitor had not yet complied with any of the three notices. He indicated his willingness to do so within 21 days of this hearing. The Tribunal has now received advice that the solicitor has complied with each notice. 8. On this basis, the Tribunal considers that no fine is warranted, and his current status an undischarged bankrupt where an amount of $300,000 is owing to creditors would render the imposition of any fine impractical. The solicitor informs the Tribunal that his conduct has not resulted from any antagonism towards the regulator, but solely due to his mental state following the accumulation of the various family issues. The Tribunal accepts such explanation. 9. The solicitor must pay the costs of the applicant pursuant to Schedule 5, cl 23 (1) of the Civil and Administrative Tribunal Act (No 2). The Tribunal notes the provisions of s 303 of the Uniform Law which renders it mandatory for the Tribunal to make orders requiring a lawyer whom it is found guilty of unsatisfactory professional conduct or professional misconduct to pay costs, unless "exceptional circumstances" exist. The Tribunal does not find that there are "exceptional circumstances" as referred to in cl 23 (1) which should deflect the application of the normal rule. 10. It should be observed that the solicitor's practising certificate was suspended from 18 April 2015 by virtue of S 70(1) (b) of the act, and he currently has no practising certificate, but wishes to resume his practice when he is discharged from bankruptcy. His right is prevented because of a debt owing to the Deputy Commissioner of Taxation. Orders 1. The Tribunal orders: 1. That the solicitor be found guilty of professional misconduct for failing to comply with the three notices issued to him on 1 December 2014, 21 May 2015 and 21 August 2015 pursuant to section 660 of the Legal Profession Act 2004 without reasonable excuse, and for failing to comply with the requirements of notification prescribed by s67 of such act: 2. That the solicitor be reprimanded for the failures referred to in order 1 above: 3. That in respect of the three notices, because the solicitor has responded to each notice to the satisfaction of the Law Society, such response is treated by the Tribunal as sufficient compliance and no further requirement or fine is to be imposed; 4. That the solicitor pay the costs of the Law Society of these proceedings. 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: 02 September 2016