Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Council of the Law Society of New South Wales v Winter (No 2) [2019] NSWCATOD 57 Hearing dates: 15 February 2019 Date of orders: 18 April 2019 Decision date: 18 April 2019 Jurisdiction: Occupational Division Before: L Pearson, Principal Member P Moran, Senior Member E Hayes, General Member Decision: (1) The respondent is reprimanded. (2) The respondent is to pay, within 28 days, a fine in the sum of $10,000. (3) The respondent is to undergo education as follows: (a) the respondent must, at his own expense, undertake within 12 months of the orders made by the Tribunal an appropriate course in legal ethics (Course) as approved by the Director, Professional Standards of the Law Society of New South Wales (Director), and therein achieve a pass mark of not less than 50% (Pass Mark); (b) within seven (7) days of receipt of notification of the result of his participation in the Course, the respondent must provide to the Director, the original of such notification; (c) should the respondent fail to achieve the Pass Mark, he must complete any further course in legal ethics as approved by the Director until such time as he achieves the Pass Mark in any further nominated course; and (d) should the respondent fail to achieve the Pass mark within the time period prescribed in (a) above, any practising certificate then held by him shall be suspended (or if not holding a current practising certificate, no such certificate is to be issued to him) until such time as he achieves the Pass Mark; (4) The respondent is to pay the costs of the applicant as agreed or assessed. Catchwords: PROFESSIONS AND TRADES – Solicitor – Professional Disciplinary Proceedings – Findings of Professional Misconduct and Unsatisfactory Professional Conduct – Appropriate orders Legislation Cited: Civil and Administrative Tribunal Act 2013 Legal Profession Uniform Law (NSW) Cases Cited: A Solicitor v Council of the Law Society of New South Wales (2004) 216 CLR 253 Council of the Law Society of New South Wales v Winter [2019] NSWCATOD 2 Law Society of New South Wales v Walsh [1997] NSWCA 185 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 New South Wales (Applicant) Ronald William Winter (Respondent) Representation: Counsel: G Johnson (Applicant) R Withana (Respondent) Solicitors: Law Society of New South Wales (Applicant) Eakin McCaffery Cox Lawyers (Respondent) File Number(s): 2017/00384467 REASONS FOR DECISION 1. The Council of the Law Society of New South Wales (the Law Society) seeks disciplinary findings and orders under the Legal Profession Uniform Law (NSW) (Uniform Law) against the respondent Ronald William Winter (the Solicitor). 2. The Law Society's complaint was made in relation to the Solicitor's conduct during the period between December 2014 to March 2015 in the course of legal proceedings between Ronro Pty Ltd (Ronro), a company in which the Solicitor's wife was the sole shareholder and of which he had at times been a director, and Groz Investments Pty Ltd (Groz). 3. In summary, in September 2014 a costs determination was made in favour of Ronro. Between December 2014 and February 2015 the Solicitor exchanged emails with Mr Rohan Cains, sole director of Groz, to negotiate payment of the judgment debt. From January 2015 the Solicitor registered the costs determination as a judgment in the Local Court; filed a notice of motion in the Supreme Court to obtain the judgment debt from security for costs provided by Groz; and prepared consent orders and a Heads of Agreement document which were filed with the Supreme Court. 4. Ronro had been deregistered on 16 November 2014 for non-payment of annual fees. The Solicitor had been Ronro's sole director until February 2013 when he was automatically disqualified by reason of his bankruptcy. 5. In our reasons published on 2 January 2019 (Council of the Law Society of New South Wales v Winter [2019] NSWCATOD 2) we gave reasons for our findings that the Solicitor was guilty of: 1. unsatisfactory professional conduct on Ground 1, that he misled Mr Cains by purporting to act for Ronro when he knew, or ought to have known, that Ronro had ceased to exist as a legal entity, and did not validly instruct him to act for it; 2. professional misconduct on Ground 2(a), that he misled Mr Cains by holding himself out as a director of Ronro when he was automatically disqualified from being a director of Ronro by reason of his being an undischarged bankrupt; and of unsatisfactory professional misconduct on Ground 2(b), that he misled Mr Cains by holding himself out as a director of Ronro when he knew, or ought to have known, that Ronro had ceased to exist as a legal entity; 3. unsatisfactory professional conduct on Ground 3, that he misled the Court by purporting to act for Ronro when he knew, or ought to have known, that Ronro had ceased to exist as a legal entity, and did not validly instruct him to act for it; and 4. professional misconduct, when the conduct between December 2014 to March 2015, being the representations as to his authority to act on behalf of Ronro together with the failure to take steps to ensure that Ronro continued to exist as a legal entity, in circumstances where the Solicitor was on notice that there was a real risk that it may not, was considered cumulatively. 1. In accordance with the directions made on 2 January 2019, the parties provided submissions as to the consequential orders to be made. The Solicitor provided two affidavits, sworn on 21 January 2019 and 29 January 2019, and gave brief oral evidence. The Solicitor relied on three affidavits sworn by Hugh Stowe on 23 January 2019, Bruce Coode sworn on 25 January 2019, and Neil Williamson sworn on 23 January 2019. Submissions on consequential orders Law Society's submissions 1. The Law Society submits that having regard to the findings by the Tribunal culminating in conclusions of professional misconduct, removal of the Solicitor's name from the Roll is the appropriate consequential order. That is necessary in the present case primarily for the protection of the public, not just from the prospect of future transgressions of the Solicitor but from similar defaults by other practitioners. 2. The Law Society submits that the Solicitor's conduct demonstrates his unfitness to remain on the Roll, based on the Tribunal's findings that: 1. the Solicitor's conduct in communicating to Mr Cains that he was a director of Ronro was deliberate and not inadvertent and that the Solicitor knew the representations he made were false; 2. the Solicitor as an experienced legal practitioner who had previously been appointed as a director and managed the administrative work of Ronro, knew the significance of the term "director"; 3. the Solicitor's conduct consisted of ongoing and persistent failures to meet the required standard of professional competence and diligence; 4. the Solicitor ought to have known that Ronro could not and did not validly instruct him to act in the conduct of the litigation with Groz. 1. The Law Society submits that the Tribunal should be satisfied that the unfitness demonstrated by the proven conduct is a present unfitness that is probably permanent or at least indefinite, and so justifies an order removing the Solicitor's name from the Roll. The nature of the conduct in question constituting professional misconduct is essentially dishonest, leading to a conclusion of unfitness that is probably permanent. The Solicitor's name should be removed from the Roll because it is the only appropriate sanction to be ordered having regard to the seriousness of the findings made against him. 2. In oral submissions, the Law Society submits that if the Tribunal is not minded to recommend removal of the Solicitor's name from the Roll, an alternative sanction is a reprimand and a fine of an amount sufficient to reflect the seriousness of the matters. The Solicitor's submissions 1. The Solicitor submits that the protection of the public and profession does not warrant his removal from the Roll. The appropriate protective order in the circumstances of this case is a reprimand to denote significant admonition of the Solicitor's conduct so as to satisfy the necessary general and specific deterrence aims of protective orders in the disciplinary jurisdiction and to ensure that the integrity of the profession is upheld publicly. 2. The Solicitor submits that he is a fit and proper person to remain in practice and it would be appropriate for him to be reprimanded having regard to his conduct the subject of the Tribunal's findings; his appreciation and understanding of or insight concerning the wrongfulness of his conduct and contrition; his good character; and disciplinary history. 3. In oral submissions, the Solicitor submits that the appropriate order is a reprimand, and that a fine is not required in the context of the public process of the hearing, and the financial penalty he will incur by payment of the Law Society's costs. 4. Following discussion with the Tribunal panel, and on the basis that if the Tribunal did not conclude that removal from the Roll was the appropriate sanction, the Law Society, in consultation with the Solicitor's representatives, provided wording for a condition to require the Solicitor to undertake further education in ethics. Discussion and findings 1. The orders that can be made by the Tribunal under s 302 of the Uniform Law include an order recommending that the Solicitor's name be removed from the Roll (s 302(1)(f)); an order that a specified condition be imposed on his practising certificate (s 302(1)(g)); or an order imposing a fine of a specified amount not exceeding $100,000 (s 302(1)(l)). The Tribunal can also make an order reprimanding the Solicitor (s 299(1)(b); s 302(1)). 2. The approach to be adopted in determining an appropriate order in the circumstances of this case is that held in Law Society of New South Wales v Walsh [1997] NSWCA 185. As discussed by Beazley JA, these disciplinary proceedings are concerned with the protection of the public. That is not confined to the protection of the public against further misconduct by the practitioner, but extends to protecting the public from similar defaults by other practitioners. Any penalty imposed should contain an element of general deterrence, publicly marking the seriousness of what the practitioner has done, and ensuring that the high standards demanded of the profession are maintained. A relevant factor is whether the practitioner understands the error of their ways, and whether the conduct in question is an isolated departure from proper professional standards. 3. Consideration of whether the Solicitor is fit and proper to remain on the Roll is to be determined as at the time of the hearing, and the proper inquiry is as to present fitness to practise. Not every finding of professional misconduct justifies or requires a conclusion that removal from the Roll is the appropriate order: A Solicitor v Council of the Law Society of New South Wales (2004) 216 CLR 253. 4. We first consider the nature of the conduct in respect of which the Solicitor was found guilty of unsatisfactory professional conduct and professional misconduct. That conduct was serious, in particular the making of false and misleading statements to a self-represented litigant in holding himself out as a director of Ronro. We concluded that that conduct was deliberate and not inadvertent. In other respects, we found that the Solicitor's conduct was recklessly careless: in taking steps to enforce the costs judgment at a time when he ought to have known that Ronro's registration was in jeopardy, and where he ought to have known he did not have valid instructions to act on behalf of Ronro. That conduct misled both Mr Cains, and the Court. While we did not find that the Solicitor had actual knowledge as to the deregistration of Ronro, in circumstances where he ought to have known that there was at least a real prospect that Ronro's registration was in jeopardy, we found that his failure to take the reasonable steps expected of an experienced lawyer was conduct well short of the expected standard of competence and diligence. 5. We next consider the Solicitor's insight and remorse as to his conduct. In his affidavit of 21 January 2019, the Solicitor gives evidence that: 1. He acknowledges and accepts the reasoning and findings of the Tribunal, and accepts that: 1. He should have investigated the status of Ronro and his failure to do so was reckless and careless, and regrets his failure to investigate the status of Ronro; 2. It was wrong to refer to himself as a director of Ronro, and that action was foolish and ill-considered; 3. He should carefully have considered whether Ronro could provide valid instructions and accepts that he should have known that it could not, and he regrets that he did not pause to make that consideration; 4. His conduct fell short of the standard of competence and diligence expected of a lawyer of 30 years standing with experience in company law, and deeply regrets that; 5. He regrets making the statements to Mr Cains and that in doing so he misled Mr Cains; 6. His failure to make enquiry as to Ronro's status was recklessly careless, and he would not now take any step based on instructions from a corporate client without first searching the client's status; and 7. He did not have valid instructions from his client and as a result misled the Court, and he is devastated that he acted in a way against his own principles and the principles and standards of the legal profession. 1. The Solicitor states that having examined the reasons which may have led to his actions he concludes that his relationship with the client Ronro was too close, which led to a loss of objectivity and a lack of objective professionalism. He has resolved that he will never accept instructions from any person or entity with which he, or any close relative, has any interest so as to ensure that any possible loss of objectivity that might arise could not cloud his professional judgment. He regrets it has taken the public scrutiny of disciplinary proceedings to arrive at this understanding. He has been publicly embarrassed by his actions and the publication of the decision. That has led to a significant mark on his previously high reputation among friends and colleagues in the profession and outside the profession, including Mr Cains with whom he previously had a good business relationship. The conduct is inconsistent with the accepted standards of the legal profession and also not in accordance with his own standards or expectations. He has nobody to blame but himself. He is sorry his actions could diminish the reputation of lawyers or the law, and is remorseful for his lack of professionalism and lack of insight in acting the way he did. He has been in practice since 11 July 1980 and has never had any other disciplinary complaints or findings made against him. 2. In his affidavit of 29 January 2019 the Solicitor accepts the finding that cumulatively his conduct constituted professional misconduct, and deeply regrets that his conduct has been found to have fallen so short of the high standards expected of legal professionals and which he has endeavoured to uphold during his legal career. 3. The Solicitor was not cross-examined on this evidence, and we accept it as evidence of his recognition and acknowledgement of the seriousness of the conduct, and of remorse for it. The Law Society notes that this expression of remorse was not made at an earlier stage of the proceedings. The Tribunal accepts that the findings made against him have been the source of regret for the Solicitor, and that he intends to modify his practice so he can maintain objectivity and avoid any repetition of his conduct. 4. The Solicitor has provided three character references, all from experienced legal practitioners. Mr Williamson and Mr Coode, both solicitors, state that they have known the Solicitor for many years, and that they regard him as diligent and ethical. Mr Stowe, a barrister, states that he has been briefed by the Solicitor since 2016, and he regards him as a competent and diligent practitioner. All state that they have read the Tribunal's reasons of 2 January 2019, and the Solicitor's affidavit of 21 January 2019. They each confirm the opinion that the conduct is not consistent with their perception of the Solicitor; the Solicitor's remorse; and that notwithstanding the findings, he continues to be regarded by them as a professional, diligent and competent practitioner. 5. In considering the weight to be given to these character references, we note the decision of the Court of Appeal in Re Melvey; ex parte Law Society of New South Wales (1966) 85 WN (Pt1) NSW 289 referring 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. Each of the three referees has read the earlier decision in these proceedings and has attested in their affidavits to the good character of the Solicitor in their capacity as a legal practitioner. Accordingly the qualifications adverted to in Melvey do not apply. We consider these references should be given considerable weight. 2. There is no dispute that the Solicitor has been in practice since 1980, the holder of an unrestricted practising certificate since 1981, and has not been the subject of a disciplinary complaint or had any professional disciplinary findings made against him before this complaint. It is not disputed that he notified the Law Society of his bankruptcy as required, and that he was allowed to continue practice with an unrestricted practising certificate subject to conditions during the period of bankruptcy. 3. The Solicitor submits that that background supports the proposition that the conduct was out of character and isolated. The Law Society submits that as a senior practitioner there may be limited capacity for the Solicitor to remedy or rectify any character defects than might be the case for a more junior practitioner. We agree with the Law Society that the community perception of what can be expected of a senior practitioner is relevant. Having found that during the period December 2014 to March 2015 there were ongoing and persistent failures by the Solicitor to meet the required standard of professional competence and diligence, we also agree with the Law Society that it is relevant that the conduct was not a single lapse. On balance, we agree with the submission of the Solicitor that the conduct was out of character. Having regard to the character references, and to the Solicitor's expressions of remorse, we are satisfied that it is conduct that is not likely to be repeated. 4. Having regard to all those factors, we conclude that while the Solicitor's misconduct was serious, he has demonstrated insight into what occurred, and why it occurred. We are persuaded that it is most unlikely that he would engage in conduct of this kind in the future in the practice of law, rather, that he would take positive steps to ensure to the best of his ability that such significant departures from the high standards expected of an experienced legal practitioner would not be repeated. 5. In all the circumstances we are not persuaded that any protective order is required to the effect that we should recommend that the Solicitor should be removed from the Roll. We are of the view that the appropriate order is to impose a reprimand and a fine and a requirement that the Solicitor undertake further professional development in ethics. A reprimand and a fine demonstrate that the Solicitor is sanctioned for failing to meet expected professional standards. We acknowledge that a finding of professional misconduct, which is a serious matter, will of itself prove a deterrent to the Solicitor and, importantly, other legal practitioners. A requirement for further training in ethics will assist in assuring the public that they can 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. As to the amount of a fine, given the seriousness of the conduct and the findings we have made as to professional misconduct, we are of the view that a fine should be more than a nominal amount. In discussion during the hearing on penalty the Law Society submitted that while the amount is a matter for the Tribunal, fines in the order of $10,000 have been imposed in similar matters. We regard a fine of that amount as providing an appropriate indication both to the profession and to the public of the seriousness of what occurred and to ensure the maintenance of the high standards of the profession. Costs 1. Clause 23 of Sch 5 to the NCAT Act 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 satisfied that exceptional circumstances exist. 2. The Law Society seeks its costs. The Solicitor accepts that there are no exceptional circumstances in this case to warrant displacing that rule, and a costs order is made. Application for compensation 1. As noted in the earlier reasons, the complainant against the Solicitor, Mr Cains, seeks compensation under Part 5.5 of the Uniform Law, and has made an application to the Tribunal on 7 February 2019 for compensation in the amount of $30,000 plus interest. 2. Proceedings 2019/00043584 are to be listed for directions at 10.30am Wednesday 1 May 2019. Orders 1. Consequent upon the findings of unsatisfactory professional conduct and professional misconduct which we have made we make the following orders: 1. the respondent is reprimanded; 2. the respondent is to pay, within 28 days, a fine in the sum of $10,000; 3. the respondent is to undergo education as follows: 1. the respondent must, at his own expense, undertake within 12 months of the orders made by the Tribunal an appropriate course in legal ethics (Course) as approved by the Director, Professional Standards of the Law Society of New South Wales (Director), and therein achieve a pass mark of not less than 50% (Pass Mark); 2. within seven (7) days of receipt of notification of the result of his participation in the Course, the respondent must provide to the Director, the original of such notification; 3. should the respondent fail to achieve the Pass Mark, he must complete any further course in legal ethics as approved by the Director until such time as he achieves the Pass Mark in any further nominated course; and 4. should the respondent fail to achieve the Pass mark within the time period prescribed in (a) above, any practising certificate then held by him shall be suspended (or if not holding a current practising certificate, no such certificate is to be issued to him) until such time as he achieves the Pass Mark; 1. the respondent is to 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: 18 April 2019