Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Council of the Law Society of NSW v Clarke (No2) [2018] NSWCATOD 132 Hearing dates: 3 August 2018 Date of orders: 14 August 2018 Decision date: 14 August 2018 Jurisdiction: Occupational Division Before: The Hon F Marks, Principal Member L M Pearson, Principal Member (Legal) E Hayes, General Member Decision: 1 The respondent is reprimanded 2 The respondent is to pay a fine of $8000 3 The respondent is to pay the costs of the applicant in the substantive proceedings in an amount as assessed in default of agreement Catchwords: Legal practitioner – stage 2 hearing consequent upon finding of professional misconduct-breach of undertakings given in the course of applying for certificates of ownership of motor vehicles – false and misleading conduct given to another legal practitioner in the course of a telephone call – whether permanently unfit to remain on roll of solicitors- held appropriate protective order was reprimand and fine-costs order made. Legislation Cited: Legal Profession Act 2004 Cases Cited: Council of the Law Society of NSW v Clarke [2018] NSWCATOD 65 Law Society of New South Wales v Walsh [1997] NSWCA 185 New South Wales Bar Association v Cummins [2001] NSWCA 284 Re Melvey; ex parte Law Society of New South Wales (1966) 85 WN (Pt1) NSW 289 Category: Principal judgment Parties: Council of the Law Society of NSW (applicant) Daniel Christopher Clarke (respondent) Representation: Counsel: G Johnson (applicant) K Lindeman (respondent) Solicitors: Law Society of NSW (applicant) TA Williams (respondent) File Number(s): 2017/00048401 Reasons for decision Background 1. In Council of the Law Society of NSW v Clarke [2018] NSWCATOD 65 we found the respondent solicitor Daniel Christopher Clarke guilty of professional misconduct. The proceedings were stood over to a Stage 2 hearing for the purpose of determining the appropriate protective orders if any that should be made consequent upon findings of professional misconduct. These Reasons constitute our reasons for the determination of the protective orders which are hereby made. 2. The factual background to these proceedings is fully set out in the prior decision and it is not necessary that we describe it in any detail. For present purposes we summarise the findings of professional misconduct as being based on the following factual matters; 1. between approximately 29 April, 2010 and approximately 8 September, 2010 the respondent solicitor applied for a number of certificates of ownership of motor vehicles from the NSW Roads and Traffic Authority (RTA) and in doing so undertook that the information provided would be used solely for purposes related to commencing legal proceedings in respect of a motor traffic accident. That undertaking was false. 2. on 27 October 2010 the applicant had a telephone discussion with Emma Bayley, a solicitor working for the RTA, in relation to a request for a certificate made by the Solicitor concerning a particular motor vehicle. During the course of that discussion the Solicitor made inter alia, statements for which he had no basis, which were incorrect, and which had the effect of misleading her. 1. The respondent had resisted the proceedings instituted against him, substantially on two bases. The first related to the meaning of the undertakings referred to in [2](1) above which he had given. Through senior counsel retained on his behalf it was submitted that the undertakings should be given a meaning which, if accepted, would have mitigated any falsity. We rejected that argument, and in doing so stated at [37]; We are comfortably satisfied to the requisite standard that ground one has been established by reason of the approach to construction of the undertaking which we have preferred, albeit that there are mitigating circumstances surrounding the giving of the undertaking. These include the fact that Identisearch had arguably misled the practice of Webb Lawyers prior to the respondent becoming involved with that practice, Webb Lawyers itself having failed to appropriately satisfy itself about the veracity of prior undertakings given to the RTA, and the possibility that employed solicitors had failed to inform the respondent of the nature and extent of the Identisearch business. Although the respondent conceded that he made no attempt to undertake his own enquiries concerning Identisearch before giving the undertakings, some allowance must be made for the fact that he had initially only recently taken over the law practice, and that the Identisearch matters were, on the evidence, an insignificant part of the practice. 1. We also made the following findings; Ground 3 42 This ground asserts that the respondent made a false and misleading representation. Once the undertaking is construed in the manner which we have set out above, it follows that it contained a false and misleading representation in that the respondent had no intention of using the information in his legal practice for the stated purpose. Furthermore, the respondent was not in a position to assert that the information would be so used by Identisearch, other than by reference to a vague understanding that that company represented motor vehicle insurers. 43 We are comfortably satisfied that this ground has been made out. …… Ground 4 44 This ground relies on the provisions of Rule 33 of [the Revised Professional Conduct and Practice Rules]…. 45 There can be no doubt that the undertakings given by the respondent to the RTA were given in the course of providing legal services to Identisearch, and that they constituted an undertaking in circumstances where it might reasonably be expected that the RTA would rely on it. That officers of the RTA in fact relied on the undertaking having been provided was confirmed in the evidence of Mr Ramsey. By this Rule the respondent was bound to honour the obligation strictly in accordance with its terms. Once the undertakings are to be construed in the manner which we have previously concluded, in circumstances where the respondent did not at any stage contemplate that his firm would be commencing legal proceedings, and that the information would be referred on to Identisearch without any specific knowledge that the information would be so used, it follows that the respondent could not honour them as contemplated by the Rule. 1. The second basis upon which the respondent resisted the proceedings was that he had no recollection of any conversation with Ms Bayley, and, as a matter of fact, neither did she. However, Ms Bayley had made contemporaneous notes of the conversation with the respondent which we accepted as summarising accurately the conversation. On this basis we found that the respondent had made certain misrepresentations, which constituted misconduct. 2. We concluded that the conduct of the respondent constituted professional misconduct, for the reasons set out in the earlier decision. The relevant evidentiary material 1. For the purpose of this Stage 2 hearing, the respondent filed an affidavit and tendered certain character references. Before discussing this evidence it is appropriate that we refer to evidence given by the respondent in the earlier proceedings both in affidavit form and orally. 2. The respondent had acquired the practice of Mr Webb on 1 April, 2010. Mr Webb remained as a consultant and two of his former employees became employed by the respondent. The work performed for Identisearch was a small part of the practice acquired from Mr Webb and was essentially handled by those employees. The involvement of the respondent consisted of signing undertakings to the RTA for the purpose of obtaining the relevant certificates. In his earlier affidavit the respondent said that he made enquiries of the employed solicitors concerning the circumstances of the undertaking and relied on what he was told by them. We accept that the respondent gave consideration to the form of the undertaking, and took the trouble to make a minor alteration to it. He said that at that stage he was aware of the importance of providing an undertaking as part of his legal practice and the importance of ensuring that the undertaking was complied with. As it transpired, an impression previously given to Mr Webb and adopted by his employed solicitors was that the certificates were to be obtained in connection with enquiries associated with motor vehicle accidents. The respondent proceeded on the basis of this impression, although he conceded that he did not approach Identisearch directly to check that this impression was correct. As is known, as set out in our earlier decision, Identisearch did not seek information contained in the certificates for the purpose of initiating proceedings in connection with a motor vehicle accident, but for the purpose of debt recovery. 3. There is no such explanation by way of mitigation concerning the information conveyed by the respondent to Ms Bayley. 4. In the course of his later affidavit prepared for the purpose of these proceedings, the respondent said that the proceedings had "been a salutary experience for me." He accepted that his conduct fell seriously short of the standard expected of him as a solicitor. He said that he regretted not taking appropriate steps to ensure the accuracy of his undertakings to the RTA and the possibility of the misuse of information which had inappropriately been made available to Identisearch. Furthermore, he accepted that the representations that he had made to Ms Bayley were untruthful and "fell far short of the standards required of me as a solicitor." 5. Subsequent to these events the respondent said that he had taken much greater care in giving undertakings as a solicitor and in making representations to colleagues "including in ad hoc phone calls." He put in place a process which ensured that no undertakings would be given by the firm without being approved by two solicitors, both of whom were required to sign that they had examined the risks associated with the undertakings. In the circumstances he rarely gave undertakings during the course of his practice. 6. The respondent said that he had now closed his law practice and had no intention to return to practice as the principal of a law firm in New South Wales. However he wished to maintain his practising certificate to enable him to continue to volunteer at a legal Centre which he had helped to establish and for which he has provided voluntary assistance since. That centre is known as the Youth and Enterprise Legal Centre. In addition to this voluntary work, the respondent has over many years undertaken a wide range of general community work as well as being involved in business activities. His work has been publicly recognised by government and the business community. 7. The respondent said that the complaints which form the genesis of these proceedings were initiated around five years ago following investigations being conducted by the applicant. He has suffered stress during this period caused by constant worry about whether he would be removed from the roll of solicitors. Furthermore, he has expended a large amount in legal fees in defending these proceedings. 8. A number of character references were provided in support of the respondent. Mr Nicolas Kirby is a barrister who has known the respondent for about seven years has been briefed by him and has had a close working relationship with him. Mr Kirby described the respondent as "an honest, capable and highly intelligent lawyer" who always dealt "honourably, ethically and honestly" in his dealings with Mr Kirby, clients, opponents and the Courts. He described the conduct of the respondent as portrayed in our earlier decision as being out of character and not according with his own experience of the respondent. Similar expressions of support were contained in affidavits provided by solicitors Melissa Saadat and Romina Dein. The competing positions of the parties and the relevant principles 1. The orders which may be made by this Tribunal consequent upon a finding of professional misconduct are set out in section 562 of the Legal Profession Act 2004 the relevant portion of which is in the following terms; 562 DETERMINATIONS OF TRIBUNAL (1) Orders generally If, after it has completed a hearing under this Part in relation to a complaint against an Australian legal practitioner, the Tribunal is satisfied that the practitioner has engaged in unsatisfactory professional conduct or professional misconduct, the Tribunal may make such orders as it thinks fit, including any one or more of the orders specified in this section. (2) Orders requiring official implementation in this jurisdiction The Tribunal may make the following orders under this subsection: (a) an order that the name of the practitioner be removed from the local roll, (b) an order that the practitioner's local practising certificate be suspended for a specified period or cancelled, (c) an order that a local practising certificate not be issued to the practitioner before the end of a specified period, (d) an order that: (i) specified conditions be imposed on the practitioner's practising certificate issued or to be issued under this Act, and (ii) the conditions be imposed for a specified period, and (iii) specifies the time (if any) after which the practitioner may apply to the Tribunal for the conditions to be amended or removed, (e) an order reprimanding the practitioner, (f) an order that the name of the practitioner be removed from the roll of public notaries maintained under the Public Notaries Act 1997. 1. The applicant sought an order that the respondent's name be removed from the local roll. The relevant principles which apply in considering whether to remove a practitioner from the roll are well-established. Significantly, such a step is protective in nature, in the sense that it protects the public from the conduct of the practitioner, it creates a deterrent to the practitioner in the event that he or she is entitled to practice at some future stage, it creates a deterrent to other practitioners with respect to conduct of this kind and it enhances the reputation and integrity of the profession in the eyes of the public. (See, for example, the judgement of Beazley JA (as her Honour then was) in Law Society of New South Wales v Walsh [1997] NSWCA 185 at [40]). 2. However, the removal of the name of a practitioner from the roll should only occur if we are persuaded that the respondent is probably permanently unfit to practise law. (See, for example the judgement of Spigelman CJ in New South Wales Bar Association v Cummins [2001] NSWCA 284 at [26]). We comprehend, that "permanently" means "indefinitely." Because of the view that we take concerning the disposition of these proceedings it is not necessary that we consider this matter in any detail. 3. In determining whether someone is unfit to practise law permanently, in the sense of indefinitely, an appropriate starting point is a consideration of the professional misconduct of which the respondent has been found guilty, and any other matter relevant to his or her fitness to practice law. We have earlier described the conduct in some detail. It is axiomatic that the respondent's misconduct was serious, because we have had occasion to characterise it as professional misconduct as that expression is defined in the Legal Profession Act 2004. In essence, the respondent conducted himself in a manner which did not exhibit the requisite care and concern relating to the truthfulness of the undertakings which he had given to the RTA. As we have pointed out, however, there are mitigating circumstances surrounding the giving of these undertakings. Furthermore, once the respondent was aware of the seriousness of what had occurred, he took prompt steps to ensure that there would be no repetition. The same mitigating circumstances do not apply to the respondent's misconduct in his dealings with Ms Bayley. We note, however, that this was a single instance. Apart from these matters, which are obviously inherently serious, there is no other relevant conduct of the respondent which we need take into account in considering what is the appropriate protective order to be made. 4. In determining whether the respondent remains unfit to practise law indefinitely we need to assess the risk to the public that he may again engage in behaviour of this kind. In some cases, such an assessment can more properly be made with the assistance of professional expert opinion by someone practising in the behavioural sciences, whether given by a psychologist or psychiatrist. Expert evidence of this kind provides assistance in circumstances where there might arguably be some recognised medical or psychological condition or some aberrant or abnormal behavioural condition or personality defect which could explain the reason for the behaviour which led to a finding of professional misconduct. Whilst readily conceding a lack of relevant scientific knowledge, it is our impression that there is nothing about the respondent and the circumstances of these proceedings which would justify recourse to expert professional opinion of this kind. 5. Accordingly, it seems to us that an appropriate starting point is a consideration of the respondent's own insight into his misconduct including his comprehension and understanding about what occurred and why. The burden of demonstrating that he possesses relevant insight, comprehension and understanding and that he would henceforth conduct himself in a changed fashion falls upon the respondent. 6. We note that the respondent relies upon three character references provided by legal practitioners. We are mindful that the Court of Appeal in Re Melvey; ex parte Law Society of New South Wales (1966) 85 WN (Pt1) NSW 289 had occasion to refer to the worth and weight to be attributed to evidentiary material which attests to the character and antecedents of a legal practitioner. At 298, the Court (Herron CJ, Sugerman and McLelland JJA) said; A matter which we ought to weigh up on the question of penalty is the character and antecedents of the respondent. He has filed over 100 affidavits which bear on this issue. Thirty of these deponents were barristers or solicitors. The rest were from clients, citizens of repute, professional men and police officers. The trend of these affidavits, speaking generally, is that the respondent was a hard-working man, full of human sympathy and goodwill, and one who did not spare himself in his clients' interests and who was respected and liked by all. This body of evidence is weighty and has caused us to pause and consider at length its effect. One of our chief difficulties is to determine how far each of the deponents knew the significance of the methods which the respondent was employing. We feel that few of the deponents other than those legally qualified were aware of the standards of honour and honourable conduct expected from a solicitor. It is one thing to speak well of a man whom a deponent has met in social or business circles; it is another to speak of him as to his professional dealings with trust funds. We do not think that the lay deponents knew or understood the significance of the dealings by the respondent with his clients' monies, and less still that they understand the real nature of the charges of his professional misconduct. 1. We note that each of these three referees has read the earlier decision in these proceedings and has attested in their affidavits to the good character of the respondent in their capacity as a legal practitioner. Accordingly the qualifications adverted to in Melvey do not apply. 2. Our impression based on the evidence given in these proceedings is that although the respondent misconducted himself in the serious manner which we have described, he has total insight into what occurred, and has engaged in a process of rationalisation as to why it occurred. We are persuaded that it is most unlikely that the respondent would engage in conduct of this kind in the future in the practice of law. Rather, it is our impression that the respondent if he engaged further in the practice of law would take positive steps to ensure to the best of his ability that he would not give any undertaking unless there was a proper basis for doing so and that he would not seek to mislead anyone, whether a client, a fellow practitioner, a Court or otherwise. 3. We asked counsel for the applicant for the basis upon which it was asserted that the respondent might again engage in conduct of this kind, in order to justify a conclusion that he was unfit to practise on an indefinite basis. The response focused on the seriousness of the misconduct which it was said would permit an inference being drawn that it was likely to continue. This assertion was made also in the context of the need to deter the respondent in the future, the need to deter other legal practitioners from engaging in the same or similar misconduct, and the need to enhance the confidence of the community in the integrity of the legal profession. As counsel for the applicant properly conceded, the assessment which must be undertaken to determine this issue involves the exercise of a value judgement having regard to the relevant principles and to all of the relevant factual circumstances. Put shortly, it is a matter of impression. As we have already set out, our impression is contrary to that suggested by the applicant. 4. In all the circumstances we are not persuaded that any protective order is warranted to the effect that the applicant should be removed from the roll of solicitors. Counsel for the respondent advised us that in no case involving a breach of undertaking simpliciter had a solicitor been removed from the roll of solicitors. Whilst this might be a useful tool for testing the conclusion to which we have come, each case must be considered on its own merits and dealt with accordingly. 5. We are also not persuaded that suspension or any protective order other than the imposition of a reprimand and a fine is appropriate. We are mindful that a finding of professional misconduct, which is a serious matter, will of itself prove a deterrent to the respondent and, importantly, other legal practitioners. The public also should be confident that legal practitioners who do not conduct themselves in an appropriate manner will be dealt with appropriately under the relevant legislation which regulates the conduct of the legal profession. 6. We intend imposing a reprimand and a fine in the sum of $8000 as reflecting appropriate protective orders in these proceedings. Costs 1. The applicant sought a costs order in its favour which was not opposed. This is a costs jurisdiction and there is no reason why an appropriate cost order should not be made. We shall do so accordingly. 2. We note that the question of costs of the application by the respondent for a permanent stay of these proceedings, determined in Council of the Law Society of NSW v Clarke [2017] NSWCATOD 142, remains outstanding. The costs order made below relates to the stages 1 and 2 hearings in the substantive proceedings. Orders 1. Consequent upon the finding of professional misconduct which we have made we make the following orders; 1. the respondent is reprimanded 2. the respondent is to pay a fine in the sum of $8000 3. the respondent is to pay the costs of the applicant in the substantive proceedings in an amount as assessed in default of agreement. ********** 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 Amendments 14 August 2018 - Date of Orders amended from system error. Now 14 August 2018. 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: 14 August 2018