Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Council of the Law Society of NSW v Petrovich [2019] NSWCATOD 44 Hearing dates: 25 February 2019 Date of orders: 28 March 2019 Decision date: 28 March 2019 Jurisdiction: Occupational Division Before: S Westgarth, Deputy President J Pheils, Senior Member B Thomson, General Member Decision: (1) The solicitor be reprimanded; and (2) The solicitor pay the costs of the applicant as agreed or assessed Catchwords: Instrument of consent – professional misconduct – reprimand Legislation Cited: Legal Profession Uniform Law Application Act 2014 Legal Profession Uniform Law (NSW) No 16a Cases Cited: A Solicitor v The Council of the Law Society of New South Wales [2004] 216 CLR 253 Allinson v General Council of Medical Education and Registration [1894] 1 QB 750 Council of the Law Society of NSW v Powell [2019] NSWCATOD 24 Council of the Law Society of NSW v Yang [2017] NSWCATOD 44 Law Society of New South Wales v Thompson [2018] NSWCATOD 57 Law Society of NSW v Autore [2017] NSWCATOD 168 Texts Cited: Nil Category: Principal judgment Parties: Council of the Law Society of New South Wales (Applicant) Vic Petrovich (Respondent) Representation: Counsel: P Muston SC and Ms Ambikapathy (Respondent) Solicitors: Council of the Law Society of NSW (Applicant) File Number(s): 2018/00234669 Publication restriction: Unrestricted REASONS FOR DECISION The Application 1. On 31 July 2018, the applicant (the Law Society) filed an application in the Tribunal naming the solicitor as the respondent. In summary, the application alleged that the solicitor has been guilty of professional misconduct by reason of his failure to ensure compliance with certain undertakings. The Law Society seeks orders to the effect that the solicitor be reprimanded and pay the costs of the Law Society as agreed or assessed. 2. On 31 January 2019 the parties filed an Instrument of Consent (signed by or on behalf of both parties) pursuant to s 144 of the Legal Profession Uniform Law Application Act 2014 (Uniform Law Act). That document contained an agreed statement of facts. The facts alleged against the solicitor are best recorded by setting out the whole of the Instrument of Consent which we do below: CONSENT The NSW Civil and Administrative Tribunal, having found that the conduct of the Respondent particularised in the Agreed Statement of Facts below amounts to professional misconduct, makes by consent, orders that the Respondent: 1. be reprimanded; and 2. pay the costs of the Applicant as agreed or assessed. AGREED STATEMENT OF FACTS DEFINITIONS Common Law Claim means Mr Z Livaja's Common Law (Work Injury Damages) Claim in the District Court of New South Wales against the Workers Compensation Nominal Insurer (case no. XXXX/XXXXX). Law Practice means the incorporated legal practice known as Petrovich Law Group Pty Ltd trading as NSW Compensation Lawyers (ACN XXX XXX XXX), located at Level X, X XXX Street, Liverpool, NSW, 2170. MBCS means the law firm known as Martin Bell & Co Solicitors. Mr A Livaja means Mr Adrijano Livaja. Mr Mohammed means Mr Shaira Mohammed. Mr Z Livaja means Mr Zoran Livaja. Respondent means Mr Vic Petrovich. Third Party Claim means Mr A Livaja's claim against Mr Mohammed for damages as a result of injuries Mr A Livaja received in a motor vehicle accident on 5 September 2009. Trust Account means the Law Practice's National Australia Bank account styled "NSW Compensation Lawyers Trust Account" (BSB XXXXXX, Account No. XXXXXXXX). Workers Compensation Claim means Mr Z Livaja's workers compensation claim in the Workers Compensation Commission against Dee Why Enterprises Pty Ltd relating to a claim for benefits as a result of injuries Mr Z Livaja received at work on 3 June 2002. FACTS 1. Since 1 July 2006, the Respondent has been a Principal of the Law Practice. 2. During the period: (a) 11 December 2009 to around 28 August 2012, MBCS were the solicitors with carriage of the Workers Compensation Claim; (b) 17 January 2011 to around 28 August 2012, MBCS were the solicitors with carriage of the Common Law Claim; and (c) 11 December 2009 to 5 November 2012, MBCS were the solicitors with carriage of the Third Party Claim. 3. On or around 28 August 2012, the Law Practice accepted instructions from: (a) Mr Z Livaja to act in relation to the Workers Compensation Claim and the Common Law Claim; and (b) Mr A Livaja to act in relation to the Third Party Claim. Ground 1: Failure to ensure compliance, by the Law Practice, with 23 October 2012 undertaking to advise MBCS "once settlement or judgment [had] occurred" in the Workers Compensation Claim and Common Law Claim 4. By letter dated 23 October 2012, the Respondent gave an undertaking to MBCS that the Law Practice would take over carriage of the Workers Compensation Claim and the Common Law Claim in the following terms: "… we do undertake to pay your reasonable costs and disbursements upon the successful conclusion of our client's respective claims and particularly undertake the following: … 4. To advise you once settlement or judgment had occurred". 5. On 19 April 2013, MBCS sent its files for the Workers Compensation Claim and the Common Law Claim to the Respondent. Workers Compensation Claim 6. On 17 April 2014, the Workers Compensation Commission issued a Certificate of Determination – Consent Orders in relation to the Workers Compensation Claim. The Certificate stated "Question of costs reserved". 7. On 3 July 2014, the Workers Compensation Commission issued a Certificate of Determination – Consent Orders requiring Dee Why Enterprises Pty Ltd to pay Mr Z Livaja's legal costs incurred in relation to the resolution of the Workers Compensation Claim as agreed or assessed. 8. By letters dated 31 July 2014 and 12 November 2014, MBCS requested that the Law Practice provide a status update on the Workers Compensation Claim. 9. By letter dated 14 November 2014, the Law Practice indicated to MBCS, for the first time, that the Workers Compensation Claim had been settled. Common Law Claim 10. On 19 November 2015, the parties to the Common Law Claim agreed to settle that claim. 11. By letter dated 11 December 2015, MBCS requested that the Law Practice provide an update in relation to the Common Law Claim. 12. On 18 January 2016, the solicitors for the Workers Compensation Nominal Insurer received a copy of a Consent Judgment in the Common Law Claim, which had been signed by a solicitor from the Law Practice. 13. On 20 January 2016, the District Court of New South Wales issued a Consent Judgment in relation to the Common Law Claim. 14. By letter dated 18 February 2016, MBCS requested that the Law Practice provide a status update in relation to the Common Law Claim. 15. By letter dated 3 March 2016, the Law Practice notified MBCS, for the first time, that the Common Law Claim had been settled. 16. By letter dated 8 March 2016, MBCS requested that the Law Practice provide details of the settlement of the Common Law Claim. 17. By letter dated 13 April 2016, the Law Practice provided MBCS, for the first time, with details of the settlement of the Common Law Claim. 18. In the circumstances referred to in paragraphs 4 to 17 above, the Respondent has failed to ensure compliance, by the Law Practice, with his 23 October 2012 undertaking to MBCS that the Law Practice would advise MBCS "once settlement or judgment [had] occurred" in relation to the Workers Compensation Claim and the Common Law Claim. Ground 2: Failure to ensure compliance, by the Law Practice, with 23 October 2012 undertaking to "protect [MBCS's] interests in cost [sic]" in relation to the Common Law Claim 19. By letter dated 23 October 2012, the Respondent gave an undertaking to MBCS that the Law Practice would take over carriage of the Workers Compensation Claim and the Common Law Claim in the following terms: "… we do undertake to pay your reasonable costs and disbursements upon the successful conclusion of our client's respective claims and particularly undertake the following: … 2. To protect your interest in cost [sic]." 20. Under the cover of a letter dated 5 October 2012, MBCS sent the Law Practice a tax invoice, dated 5 October 2012, issued by MBCS to Mr Z Livaja in relation to the Common Law Claim. 21. On 4 April 2013, MBCS received from the Law Practice $17,671.99 by way of part payment on account of the disbursements that MBCS incurred in relation to the Common Law Claim. 22. On 19 April 2013, MBCS sent its files for the Common Law Claim to the Respondent. 23. By letter dated 21 May 2015, MBCS sent the Law Practice an amended memorandum of costs and disbursements, dated 21 May 2016, in relation to the Common Law Claim. The memorandum of costs and disbursements relevantly provided that MBCS had incurred professional fees and disbursements in relation to the Common Law Claim in the sum of $47,085.99 (including GST). 24. On 20 January 2016, the District Court of New South Wales issued a Consent Judgment in relation to the Common Law Claim. 25. In or around February 2016, pursuant to the Consent Judgment, the Workers Compensation Nominal Insurer provided the Law Practice with a cheque in the sum of $122,690.81. 26. On 26 February 2016, the Law Practice transferred $122,690.81 into the Trust Account. After the transfer, the balance in the Trust account was $122,690.81. 27. On 1 March 2016, the Law Practice distributed the Common Law Claim settlement proceeds as follows. Amount Payee Stated reason for payment $15,000 Robert J Taylor Barrister's fees $663 Dr Pukanic Outstanding treatment Dr Pukanic $132 Plaza Physiotherapy O/S Treatment Plaza Physio $5,278.20 Dr Dragutinovich O/s Treatment Dr Dragutinovich $50,000 Law Practice Invoice # 6532 Trust to Office Transfer $51,617.61 Mr Z Livaja Settlement monies 28. As at 1 March 2016, the balance in the Trust Account from the settlement monies received in the Common Law Claim was $0.00. 29. As at 2 March 2016, the Law Practice had not paid MBCS any monies for MBCS's professional fees incurred in relation to the Common Law Claim. 30. By letters dated 27 April 2016, 9 May 2016 and 16 May 2016, MBCS requested that the Law Practice pay MBCS's outstanding costs in relation to the Common Law Claim. 31. In the circumstances referred to in paragraphs 19 to 30 above, the Respondent has failed to ensure compliance, by the Law Practice, with his 23 October 2012 undertaking to MBCS that the Law Practice would "protect [MBCS's] interests in cost [sic]" in relation to the Common Law Claim. Ground 3: Failure to ensure compliance, by the Law Practice, with 29 November 2012 undertaking to "protect [MBCS's] interests and costs" in relation to the Third Party Claim 32. By letter dated 29 November 2012, the Respondent gave an undertaking to MBCS that the Law Practice would take over carriage, from MBCS, of the Third Party Claim in the following terms: "We, therefore, provide the following undertakings in addition: … 2. To protect your interests and costs." 33. Under the cover of a letter dated 14 January 2013, MBCS sent its files for the Third Party Claim to the Respondent. 34. On 20 August 2014, in District Court proceedings in relation to the Third Party Claim, Curtis DCJ delivered judgment in favour of Mr A Livaja and ordering Mr Mohammed to pay Mr A Livaja $146,540.47. 35. On 23 September 2014, settlement monies in the Third Party Claim in the amount of $127,795.11 were deposited into the Trust Account. After the transfer, the balance in the Trust Account was $127,795.11. 36. On 15 October 2014, MBCS and the Law Practice agreed that the Law Practice would pay MBCS $12,898 (including GST) on account of MBCS's professional fees and disbursements incurred in relation to the Third Party Claim. 37. On the following dates, the Law Practice distributed the Third Party Claim settlement proceeds as follows. Date Amount Payee Stated reason for payment 11/12/14 $62,029.01 Mr A Livaja Settlement monies A Livaja 11/12/14 $2,330 M Pukanic Pty Ltd Outstanding Treatment Dr Pukanic 11/12/14 $841.31 Commonwealth of Australia DSS Rehabilitation 11/12/14 $1,793.50 Jacobs Physiotherapy Outstasnding (sic) treatment Jacobs Physio 11/12/14 $750 City X-Ray Outstanding trestment (sic) City X-Ray 12/12/14 $49,711.29 Mr A Livaja Balance Settlement money 12/12/14 $340 Dr Ann Stephenson Outstanding Treatment 38. As at 12 December 2014, the balance in the Trust Account from the settlement monies received in the Third Party Claim was $10,000. 39. As at 13 December 2014, the Law Practice had not paid MBCS any monies for MBCS's professional fees incurred in relation to the Third Party Claim. 40. In the circumstances referred to in paragraphs 32 to 39 above, the Respondent has failed to ensure compliance, by the Law Practice, with his 29 November 2012 undertaking to MBCS that the Law Practice would "protect [MBCS's] interests and costs" in relation to the Third Party Claim. Ground 4: Failure to comply with 29 November 2012 undertaking to "pay [MBCS's] reasonable costs with priority" once the Law Practice obtained "a settlement or judgment" in relation to the Third Party Claim 41. By letter dated 29 November 2012, the Respondent gave an undertaking to MBCS that the Law Practice would take over carriage, from MBCS, of the Third Party Claim in the following terms: "We, therefore, provide the following undertakings in addition: … 3. Once we obtain a settlement of judgment to pay your reasonable costs with priority …". 42. Under the cover of a letter dated 14 January 2013, MBCS sent its files for the Third Party Claim to the Respondent. 43. On 20 August 2014, in District Court proceedings in relation to the Third Party Claim, Curtis DCJ delivered judgment in favour of Mr A Livaja and ordering Mr Mohammed to pay Mr A Livaja $146,540.47. 44. On 23 September 2014, settlement monies in the Third Party Claim in the amount of $127,795.11 were deposited into the Trust Account. 45. On 15 October 2014, MBCS and the Law Practice agreed that the Law Practice would pay MBCS $12,898 (including GST) on account of MBCS's professional fees and disbursements incurred in relation to the Third Party Claim. 46. By letter dated 25 November 2014, MBCS requested that the Law Practice notify MBCS when it would pay MBCS on account of the fees and disbursements that MBCS incurred in relation to the Third Party Claim. 47. By letter dated 27 January 2015, MBCS notified the Law Practice that MBCS was yet to receive from the Law Practice a reply regarding when the Law Practice would pay MBCS on account of the fees and disbursements that MBCS incurred in relation to the Third Party Claim. 48. By letter dated 11 February 2015, MBCS requested that the Law Practice notify MBCS when it would pay MBCS on account of the fees and disbursements that MBCS incurred in relation to the Third Party Claim. 49. By letter dated 24 March 2015, MBCS requested that the Law Practice reply to its 11 February 2015 letter. 50. By letter dated 20 July 2015, MBCS notified the Law Practice that MBCS was yet to receive from the Law Practice payment on account of MBCS's fees and disbursements in relation to the Third Party Claim. 51. On 28 August 2015, a Certificate of Determination of Costs was issued in relation to the Third Party Claim. The Certificate of Determination of Costs recorded a determination that $129,663.41 was a fair and reasonable amount of costs for Mr Mohammed to pay to Mr A Livaja. 52. On 27 October 2015, settlement proceeds for the Third Party Claim in the sum of $129,663.41 were deposited into the Trust Account. 53. By letter dated 2 October 2015, MBCS requested that the Law Practice pay MBCS $12,898 on account of its costs and disbursements incurred in relation to the Third Party Claim. 54. Under the cover of a letter dated 4 November 2015, the Law Practice provided MBCS with a cheque for $8,879.03 in part payment of MBCS's fees and disbursements incurred in relation to the Third Party Claim. 55. By letter dated 6 November 2015, MBCS requested that the Law Practice pay it an additional $4,018.97 on account of MBCS's fees and disbursements incurred in relation to the Third Party Claim. 56. During the period 9 November 2015 to 25 May 2016, MBCS and the Law Practice exchanged correspondence regarding MBCS's request that the Law Practice pay it an additional $4,018.97 on account of MBCS's fees and disbursements incurred in relation to the Third Party Claim. 57. Under the cover of a letter dated 30 May 2016, the Law Practice provided MBCS with a cheque for $4,018.97 in part payment of MBCS's fees and disbursements incurred in relation to the Third Party Claim. 58. In the circumstances referred to in paragraphs 41 to 57 above, the Respondent has failed to ensure compliance, by the Law Practice, with his 29 November 2012 undertaking to MBCS that the Law Practice would "pay [MBCS's] reasonable costs with priority" once the Law Practice obtained "a settlement or judgment" in relation to the Third Party Claim. The Evidence 1. The Law Society tendered the following evidence without objection: 1. Letter dated 11 January 2019 from the Legal Services Commissioner – Exhibit A; 2. Affidavit of A M Foord dated 26 July 2018 – Exhibit B; and 3. Affidavit of M H F Bell dated 1 August 2018 – Exhibit C. 1. The solicitor tendered the following evidence without objection: 1. The affidavit of the solicitor dated 17 December 2018 – Exhibit 1; and 2. References from B Loukas dated 17 December 2018, Dr Z Protulipoc dated 17 December 2018 and from R Taylor dated 21 December 2018 – collectively Exhibit 2. The Parties' Submissions 1. The Law Society submitted that the agreed statement of facts supported by the evidence contained in the exhibits should satisfy the Tribunal that the solicitor has been guilty of professional misconduct and that the orders set out earlier (namely an order for a reprimand and costs) are appropriate in the circumstances. Ground 1 1. Ground 1 concerned a failure to ensure compliance by the solicitor's law practice with an undertaking to advise MBSC (being the solicitors formerly representing the solicitor's client and from whom the solicitor had taken over the matter of representing the client). The assertion was that the solicitor failed to advise MBSC once settlement had occurred. In the case of the workers compensation claim, the solicitor did not comply with the undertaking until November 2014, notwithstanding that the claim was settled in April 2014. In the case of the common law claim, which was settled in January 2016, the solicitor did not comply with the undertaking until March 2016. 2. The solicitor's submissions state: 1. The solicitor acknowledges that there was an unacceptable delay in advising MBCS once settlement or judgment had occurred in both the workers compensation claim and the common law claim. These acknowledgments are contained in the solicitor's affidavit (Exhibit 1); 2. The solicitor states that he had delegated the day to day responsibility for the common law claim and the workers compensation claim to an employed solicitor and from the time of the delegation (around September 2013) the employed solicitor handled most of the day to day interactions with the client and with MBCS. The solicitor (i.e. the respondent) had limited involvement in the day to day conduct of the matter; and 3. Whilst the solicitor did not knowingly withhold information regarding the settlement or consciously breach the undertaking he had given to MBCS, he acknowledges and understands that at all times he remained responsible for all aspects of these matters as the supervising principal. The solicitor also acknowledges and understands that at all times he remained responsible for ensuring that the law practice complied with the undertakings given and that he failed adequately to do so. This is confirmed in his affidavit. Ground 2 1. Ground 2 concerns the undertaking given by the solicitor to MBCS that his law practice would pay the reasonable costs and disbursements of MBCS upon the successful conclusion of the client's claim and particularly undertake to protect MBCS's interests in costs. 2. The Law Society submitted that the solicitor having received the settlement monies into his trust account, he thereafter distributed the settlement monies to his firm and to others (including the client) but did not pay an amount to MBCS. 3. The solicitor's submissions may be summarised as follows: 1. As explained in his affidavit, the solicitor was of the view that the undertaking involved an acknowledgment by him that he, on behalf of his law practice, had assumed the responsibility of paying the reasonable costs of disbursements of MBCS in relation to the common law claim whether or not the law practice held funds in trust to cover those costs and disbursements. As such, the solicitor genuinely believed that so long as his law practice had sufficient funds to cover the costs claimed by MBCS, the requirement that the law practice protect MBCS's interest in costs was satisfied; 2. On or around 19 November 2015 the employed solicitor with the day to day conduct of the common law claim advised the solicitor (i.e. the respondent) of a settlement offer and that it was the view of the employed solicitor and counsel that the client would not accept the settlement being offered if any amount was deducted from the settlement sum for professional fees (other than disbursements). The solicitor accepted this view and agreed to waive his firm's professional fees in order to facilitate the settlement. His firm has not received any fees in relation to the common law claim; 3. The solicitor assumed that the employed solicitor with the day to day conduct of the common law claim would contact MBCS for the purposes of seeking a waiver from that firm in relation to outstanding professional fees. However, the solicitor did not follow up with the employed solicitor to ensure that he had done so, or to ascertain whether MBCS had given a waiver. The solicitor now knows that the employed solicitor did not contact MBCS and did not seek a waiver from that firm in relation to outstanding professional fees. These matters are also confirmed in Exhibit 1; 4. The payment of $50,000.00 (shown in the agreed statement of facts set out above) was for reimbursement of MBCS disbursments. The solicitor's firm has, at all times had sufficient funds to pay the fees claimed by MBCS. In these circumstances, it did not occur to the solicitor that these costs were not protected. The solicitor submitted that it was in this context and based upon his assumption that the employed solicitor with the day to day conduct of the matter would liaise with MBCS, that the solicitor authorised the release of the funds and did not retain any settlement funds to cover MBCS's claim for professional fees incurred in relation to the common law claim; 5. There exists a genuine dispute between the solicitor's law practice and MBCS as to the quantum of the costs MBCS is entitled to recover as professional fees in relation to the common law claim; and 6. The solicitor accepts that he has breached the undertaking to protect MBCS' interest in costs in relation to the common law claim by failing to ensure that his law practice withheld from the client sufficient of the settlement account to secure the payment of such professional fees as MBCS might ultimately be found to be entitled to recover in relation to the common law claim. Ground 3 1. Ground 3 concerns the failure to comply with the undertaking given on 29 November 2012 to protect MBCS's interests in costs in relation to the third party claim. 2. The Law Society submitted that as at 12 December 2014 the balance in the solicitor's trust account from the monies received in the third party claim was $10,000.00 and that that amount was insufficient to pay the costs of MBCS. In the circumstances, there was a failure to comply with the relevant undertakings. 3. The solicitor made the following submissions: 1. At the time he gave the undertaking, the solicitor believed he was acknowledging that he, on behalf of his law practice, had assumed the responsibility for paying the reasonable costs and disbursements of MBCS in relation to the third party claim whether or not the law practice held funds in trust to cover these costs and disbursements. As such, the solicitor genuinely believed that so long as the law practice had sufficient funds to cover the costs claimed by MBCS, the requirement that the law practice protect MBCS' interests in costs was satisfied; 2. The law practice had sufficient funds at all times to cover the costs claimed by MBCS in relation to the third party claim and the solicitor believed that the costs claimed by MBCS were protected at all times. In addition, the solicitor believed – and now accepts erroneously – that MBCS were only entitled to recover from the law practice so much of the claimed professional fees as were reasonable. It was in this context that he authorised the release of the settlements funds and only retained $10,000.00 of the settlement funds to cover the costs claimed by MBCS; 3. The costs claimed by the law practice (including the costs claimed by MBCS) were referred for assessment and an amount of $6,916.03 was the amount of costs assessed as payable to MBCS on a party party basis. The solicitor authorised the payment of that sum to MBCS. At that time, the solicitor genuinely, but erroneously, believed that MBCS was only entitled to that amount. The solicitor has subsequently authorised the payment of $4,018.97 being the outstanding proportion of the amount agreed to be paid by his firm to MBCS; 4. The solicitor accepts that he breached the undertaking to protect the interests and costs of MBCS in relation to the third party claim by failing to ensure that his law practice complied with this undertaking; and 5. The solicitor acknowledges and understands that at all times he remained responsible for all aspect of this matter as the supervising principal. He acknowledges and understands that at all times he remained responsible for ensuring that the law practice complied with the undertaking given in relation to the matter and that he failed adequately to do so. Ground 4 1. Ground 4 concerns the failure to comply with the 29 November 2012 undertaking to pay MBCS reasonable costs with priority once the law practice obtained a settlement in relation to the third party claim. The Law Society's submissions rely upon paragraphs 41 to 57 of the agreed facts as contained in the Instrument of Consent and the Law Society submitted that the solicitor failed to comply with the undertaking. 2. The solicitor's submissions are in substance the same as in respect of the submissions concerning Ground 3. 3. In addition, the solicitor makes the following submissions: 1. He acknowledges that he was personally responsible for ensuring that the law practice complied with each of the undertakings; 2. In the circumstances he acknowledges that he should have been more attuned to the difficulties the employed solicitors with the day to day carriage of the common law claim, the workers compensation claim and the third party claim were facing and should have provided a greater level of supervision of their handling of these claims including guiding and monitoring their interactions and correspondence with MBCS; 3. The solicitor acknowledges that it was his responsibility to provide an appropriate level of supervision to the solicitors and that he failed adequately to do so; 4. He accepts that on four separate occasions he failed to ensure compliance by his firm with the undertakings given to MBCS; and 5. He accepts that collectively these failures constitute professional misconduct and he consents to a finding of professional misconduct. 1. The solicitor finally made submissions (confirmed in Exhibit 1) to the effect that he has now implemented a formal process that must be followed where an undertaking is proposed to be given to another solicitor, another law practice, Court or other person by his law practice or by a solicitor of his practice. The process includes: 1. A principal of the law practice and the client being notified and approving any undertaking prior to it being given; 2. Procedures to draw attention to the solicitor with day to day responsibility for the matter (the responsible solicitor) and the supervising principal that undertakings have been given in the matter; 3. Correspondence regarding undertakings provided to a solicitor or law practice previously handling the matter being provided to the supervising principal for review and comment; and 4. Any difficulties a responsible solicitor is having in his or her dealings with a client and any issues which may affect compliance with an undertaking given by the law practice being brought to the attention of the principal of the law practice at the earliest opportunity. 1. The solicitor provided references, the authors of which have been set out above. Each referee has known the solicitor for many years and attest to his high standards of professionalism and integrity. All references express the view that the conduct the subject of this application is unlikely to occur again. Submissions concerning conduct and orders 1. The Law Society's submissions may be summarised as follows: 1. The conduct asserted and acknowledged by the solicitor constitutes professional misconduct in that it satisfies the test in the Allinson v General Council of Medical Education and Registration [1894] 1 QB 750, that is the solicitor's conduct would be regarded as disgraceful or dishonourable by professional colleagues of good repute and competency; 2. In addition, the conduct satisfies the description contained in s 297(1)(a) of the Legal Profession Uniform Law (NSW) No 16a (Uniform Law), in that the conduct involves a substantial failure to reach or maintain a reasonable standard of competence and diligence. That section states: 297 Professional misconduct (1) For the purposes of this Law, professional misconduct includes— (a) unsatisfactory professional conduct of a lawyer, where the conduct involves a substantial or consistent failure to reach or maintain a reasonable standard of competence and diligence; 1. The Law Society submitted that regard should be had to the following cases: 1. Council of the Law Society of NSW v Powell [2019] NSWCATOD 24. In that case, the Tribunal explained that undertakings given by legal practitioners must be honoured and that prima facie a breach will constitute a most serious matter [20]; 2. Law Society of New South Wales v Thompson [2018] NSWCATOD 57. In that case, the Tribunal said that it is an egregious wrong for any legal practitioner to fail to honour an undertaking and that failure to honour is professional misconduct [4]; 3. Law Society of NSW v Autore [2017] NSWCATOD 168. That case involved a failure to honour an undertaking and the solicitor was found to have been guilty of professional misconduct; and 4. Council of the Law Society of NSW v Yang [2017] NSWCATOD 44. That case also involved a failure to honour an undertaking and the solicitor was found guilty of professional misconduct. 1. In addition, the Law Society referred to the Solicitors Rules which contain the provisions requiring solicitors to honour undertakings. The Legal Profession Uniform Law Australian Solicitors' Conduct Rules 2015 provides: 6 Undertakings 6.1 A solicitor who has given an undertaking in the course of legal practice must honour that undertaking and ensure the timely and effective performance of the undertaking, unless released by the recipient or by a court of competent jurisdiction. 6.2 A solicitor must not seek from another solicitor, or that solicitor's employee, associate, or agent, undertakings in respect of a matter, that would require the co-operation of a third party who is not party to the undertaking. 1. The Law Society submitted that the appropriate orders which the Tribunal should make are those contained in the application, namely a reprimand and an order for costs. In support of a reprimand as the appropriate order to be made, the Law Society stated that the conduct of the solicitor was relatively isolated and concerned two related matters. In a sense, the conduct could be described as "one off". In addition, recognition should be given to the fact that steps have been taken to ensure that the conduct is not repeated. These steps include the introduction of procedures within the law practice and steps taken to educate employed staff. A further consideration in favour of only a reprimand is that the solicitor has at all times cooperated with the Law Society in relation to the matters the subject of this application. 2. Finally, the Law Society drew to the Tribunal's attention that the solicitor has had an unblemished record except for a prior offence concerning advertising. Solicitor's Submissions 1. The solicitor's counsel made submissions (in addition to those referred to earlier in these reasons) which can be summarised as follows: 1. With respect to Ground 1, there was compliance with the undertaking but compliance did not take place in a timely fashion. So far as Ground 2 is concerned, the period of non-compliance was only a matter of weeks; and 2. The failure to protect the other solicitor's costs is acknowledged. The explanation lies in the fact that the solicitor was not involved in the day to day aspects of the matters which had produced the complaints. However, with respect to Ground 4, payment in full has occurred. With respect to Ground 3, payment is full has not yet occurred but that arises because the solicitor and the other firm are still in dispute. However, breach of the undertaking is acknowledged. Decision 1. For the reasons which follow, we are satisfied that the Instrument of Consent: 1. Contains an appropriate statement of the relevant facts (which has been supported by the evidence tendered by the Law Society); 2. Contains an appropriate acknowledgment that the solicitor failed to ensure compliance with the undertaking referred to in the Instrument of Consent; and 3. Contains an appropriate agreement for consent orders to be made by which the solicitor is reprimanded and ordered to pay costs. 1. The authorities make clear that the failure to comply with undertakings is a serious matter capable of constituting professional misconduct. Given the facts agreed in this matter, we are satisfied that the solicitor's conduct constitutes professional misconduct and make such finding. 2. In our view, the proposed order that the solicitor be the subject of a reprimand is appropriate. In A Solicitor v The Council of the Law Society of New South Wales [2004] 216 CLR 253 Gleeson CJ said: ...[N]ot all cases of professional misconduct justify or require a conclusion that the name of a practitioner should be removed from the roll. Where an order for removal from the roll is contemplated, the ultimate issue is whether the practitioner is shown not to be a fit and proper person to be a legal practitioner of the Supreme Court upon whose roll the practitioner's name presently appears. 1. In our view, the solicitor's conduct does not warrant a finding that he is not a fit and proper person to retain his practising certificate. Nor does the conduct warrant an order such as a suspension or the imposition of practising conditions. The Instrument of Consent appropriately reflects orders which are commensurate with the circumstances and which adequately protect the public interest. In coming to these views we have had regard to the fact that the solicitor has cooperated with the Law Society in these proceedings, has acknowledge his failures and has taken steps to ensure non-compliance with undertakings in the future is most unlikely to occur. His record is relatively unblemished and his referees speak well of him. 2. Furthermore, we have had regard to the letter from the Legal Services Commissioner (Exhibit A) tendered by the Law Society. In that letter, the Commissioner states that he is of the view that the proposed orders reflect the Tribunal's disapproval of the solicitor's conduct. He also notes certain mitigating factors which are set out in the letter, namely: 1. The conduct occurred on four occasions and whilst not therefore an isolated departure from expected standards of competence and diligence, it was not a prolonged repetitive course of conduct; 2. The solicitor has unreservedly accepted responsibility for the fact that the conduct occurred due to a failure on his part to ensure compliance, including by providing an inadequate level of supervision to employed solicitors; 3. The solicitor has acknowledged that at all times he remained responsible; and 4. The solicitor has fully cooperated with the Law Society and has taken steps to ensure that clearly defined procedures and protocols are implemented to ensure compliance with undertakings in the future and has provided appropriate education in that regard to employed solicitors. The Commissioner also noted the fact that the solicitor has been in practice for approximately 27 years. 1. Although the Uniform Law does not require the agreement of the Commissioner, his views are of assistance as they come from the person with statutory responsibility for enforcing professional standards of the legal profession in NSW in conjunction with the Law Society. Accordingly, the Commissioner's views are persuasive. 2. The Instrument of Consent also seeks an order that the solicitor pay the costs of the Law Society. In our view, no other order would be appropriate given the provisions of cl 23 of Sch 5 of the Civil and Administrative Tribunal Act 2013 (NCAT Act) which provides that 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 unless the Tribunal is satisfied that exceptional circumstances exist. No exceptional circumstances were put to us and nor, based upon the evidence provided to us, do we think that such circumstances exist. Orders 1. Accordingly and consequent upon the finding that we have made that the solicitor has engaged in professional misconduct, we make the orders proposed in the Instrument of Consent as follows: 1. The solicitor be reprimanded; and 2. The solicitor pay the costs of the applicant 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: 28 March 2019