Administrative Decisions Tribunal New South Wales

• Medium Neutral Citation: The Council of the Law Society of New South Wales v White [2011] NSWADT 10
• Hearing dates: 26 November 2010
• Decision date: 19 January 2011
• Jurisdiction: Legal Services Division
• Before: M Riordan, Judicial Member; G Mullane, Judicial Member; C Bennett, Non-judicial Member

Decision

1. The name of Geoffrey Allan White be removed from the roll of legal practitioners.
2. Geoffrey Allan White shall pay the applicant's costs of these proceedings, as agreed or assessed.

• Catchwords: Solicitor - Professional Misconduct
• Legislation Cited: Legal Profession Act 1987; Legal Profession Act 2004; Revised Professional Conduct and Practice Rules 1995
• Cases Cited: Allinson v General Council of Medical Education and Registration [1894] 1 KB 750; Coe v NSW Bar Association [2000] NSWCA 13; Council of the New South Wales Bar Association v Butland [2009] NSWADT 177; Law Society of New South Wales v Foreman (1994) 34 NSWLR 408; New South Wales Bar Association v Hamman [1999] NSWCA 404; New South Wales Bar Association v. Meakes [2006] NSWCA 340; Wentworth v New South Wales Bar Association (1992) 176 CLR 239
• Category: Principal judgment
• Parties: The Council of the Law Society of New South Wales (Applicant); Geoffrey Allan White (Respondent)
• Representation: S Barnes (Applicant); A Foord (Applicant); No appearance (Respondent)
• File Number(s): 102015

1               In this matter, the Applicant, the Council of the Law Society of New South Wales ("the Society"), made an Application against the Respondent, Geoffrey Allan White ("the Solicitor") alleging that he was a Legal Practitioner within the meaning of the Legal Profession Act 2004 ("the 2004 Act") and that while practising as such he was guilty of professional misconduct and unsatisfactory professional conduct on multiple grounds.

2               The Society sought the following orders:

a. That the Solicitor's name be removed from the Roll.

b. That the Solicitor pay the costs of the Society.

c. Such further orders as the Tribunal sees fit.

 

3               The Application set out the multiple grounds, supported by particulars, for a finding of professional misconduct against the Solicitor, namely that:

"A. In relation to his client Joan Bligh and her great-granddaughter Kehani Metcalfe, the Respondent:

1. Misappropriated the sum of $45,000.00 being trust money;

2. Wilfully breached section 61 of the Legal Profession Act 1987; and

3. Wilfully breached section 62 of the Legal Profession Act 1987.

 

B. In relation to his client 336-338 Kent Street Pty Ltd ('Kent Street'), the Respondent:

1. Misappropriated the sum of $180,000.00 being trust money;

2. Wilfully breached section 61 of the Legal Profession Act 1987;

3. Wilfully breached section 62 of the Legal Profession Act 1987; and

4. Breached Rule 12 of the Revised Professional Conduct and Practice Rules 1995 by borrowing from the client.

 

C. In relation to his client Mark Coleman, the Respondent:

1. Misappropriated the sum of $49,000.00 being trust money;

2. Wilfully breached section 61 of the Legal Profession Act 1987; and

3. Wilfully breached section 62 of the Legal Profession Act 1987.

 

D. In relation to his client, the Estate of the late Madge Kenny, the Respondent:

1. Misappropriated the sum of $20,938.95 being trust money;

2. Wilfully breached section 61 of the Legal Profession Act 1987; and

3. Wilfully breached section 62 of the Legal Profession Act 1987.

 

E. In relation to his client Narval Matthaei, the Respondent:

1. Misappropriated the sum of $126,666.67 being trust money;

2. Wilfully breached section 61 of the Legal Profession Act 1987; and

3. Wilfully breached section 62 of the Legal Profession Act 1987.

 

F. In relation to his client Elizabeth Street Apartments, the Respondent:

1. Misappropriated sums of $17,137.16; $34,683.40 and $40,000.00 being trust money;

2. Wilfully breached section 61 of the Legal Profession Act 1987;

3. Wilfully breached section 62 of the Legal Profession Act 1987;

4. Misappropriated sums of $50,000.00; $54,699.52; $2340.00; $30,000.00; $30,000.00; $45,000.00 and $45,000.00;

5. Wilfully breached section 61 of the Legal Profession Act 1987; and

6. Wilfully breached section 62 of the Legal Profession Act 1987.

 

G. In relation to his clients generally the Respondent:

1. Misappropriated a sum of $226,256.37 being trust money;

2. Wilfully breached section 61 of the Legal Profession Act 1987;

3. Wilfully breached section 62 of the Legal Profession Act 1987; and

4. Caused a deficiency in his trust account.

 

H. In relation to his client the Estate of the Late William Robert Smith, the Respondent:

1. Misappropriated the sum of $126,667.67 being trust money;

2. Wilfully breached section 61 of the Legal Profession Act 1987;

3. Wilfully breached section 62 of the Legal Profession Act 1987;

4. Misappropriated the sum of $53,666.63 being trust money;

5. Misappropriated the sum of $203,507.97 being trust money;

6. Wilfully breached section 61 of the Legal Profession Act 1987;

7. Wilfully breached section 62 of the Legal Profession Act 1987;

8. Misappropriated the sum of $276,795.51 being trust money;

9. Wilfully breached section 61 of the Legal Profession Act 1987; and

10. Wilfully breached section 62 of the Legal Profession Act 1987.

 

I. In relation to his client Jeremy Miller, the Respondent:

1. Misappropriated a sum of $350,000.00 being trust money; and

2. Wilfully breached section 61 of the Legal Profession Act 1987.

 

J. In relation to his client Mark Coleman, the Respondent:

1. Caused a deficiency in his trust account.

 

K. In relation to his client Michael Kenny, the Respondent:

1. Misappropriated a sum of $30,000.00 being trust money; and

2. Wilfully breached section 61 of the Legal Profession Act 1987.

 

L. In relation to his client Gabriss Pty Limited, the Respondent:

1. Misappropriated the sum of $42,000.00, being trust money;

2. Wilfully breached section 61 of the Legal Profession Act 1987;

3. Wilfully breached section 62 of the Legal Profession Act 1987; and

4. Caused a deficiency in his trust account.

 

M. In relation to his client Kenneth Harris, the Respondent:

1. Wilfully breached section 62 of the Legal Profession Act 1987.

 

N. In relation to his client Pegasus Ventures Pty Limited, the Respondent:

1. Wilfully breached section 61 of the Legal Profession Act 1987; and

2. Wilfully breached section 62 of the Legal Profession Act 1987.

 

O. In relation to his client Peter Bowen-Jones, the Respondent:

1. Breached Rule 12 of the Revised Professional Conduct and Practice Rules 1995 by borrowing from the client; and

2. Failed to account to the client.

 

P. In relation to his client Robert Doyon, the Respondent:

1. Failed to account to the client.

 

Q. In relation to his client James Webb, the Respondent:

1. Wilfully breached section 61 of the Legal Profession Act 1987."

 

4               On 26 November 2010, after hearing submissions on behalf of the Society, the Tribunal delivered an Ex Tempore Decision in the following terms:

"This matter was commenced by an Application for Original Decision that was filed on 16 June 2010.

 

The Application is particularised in detail commencing with Particular A and continuing up to and including particular Q, comprising 99 paragraphs in all, alleging that the Respondent, Geoffrey Allan White, is guilty of professional misconduct based on those particulars.

 

There have been two (2) Replies filed by the Respondent to date, but he has not filed any affidavit evidence in support of either Reply.

 

The Law Society relies on Affidavit evidence from Raymond John Collins, none of which has been objected to for obvious reasons, there being no appearance by the Respondent. Those Affidavits have been admitted into evidence without dispute.

 

In the Amended Reply to an Application filed 26 August 2010, the Respondent states:

 

"For the purpose of these proceedings only the Respondent does not contest grounds A to Q set out in the Application."

 

That being the case it is not necessary for the Tribunal to hear any evidence establishing the grounds of the complaints and based on that Admission and there being no contest on the evidence, the Tribunal is comfortably satisfied that particulars A to Q of the Application have been established.

 

As a consequence the Tribunal finds that the Respondent is guilty of professional misconduct evidenced by particulars A to Q of the Application.

 

There is of course no explanation offered for the Respondent's conduct and in the absence of any explanation we find that we are comfortably satisfied that the Applicant is permanently unfit to practice as an Australian Legal Practitioner. Accordingly we order that the name of Geoffrey Allan White be removed from the Roll of Legal Practitioners.

 

The only contest to the application raised in the Amended Reply appears to be that the Respondent does not feel he should have to pay the Applicant's costs of these proceedings. He has set out alleged ''Extraordinary Circumstances" in paragraph 4 of his Amended Reply.

 

It is the Tribunal’s view that the Respondent's argument in relation to the issue of costs is misconceived and is based on a mistaken belief that the Tribunal does not need to be satisfied that the grounds of an Application have been established and that he is permanently unfit to practice before making an order that his name be removed from the Roll.

 

In our view there are no extraordinary circumstances to countermand the making of the usual costs order in proceedings such as these. Accordingly the Tribunal orders that Geoffrey Allan White pay the Law Society's costs as agreed or assessed. "

 

5               As the Tribunal determined that a protective order was appropriate, it has decided to publish more detailed reasons for its Ex Tempore Decision, as follows.

6               Section 61 of the Legal Profession Act 1987 ("the 1987 Act") provides:

"(1) A solicitor who, in the course of practising as a solicitor in this State, receives money on behalf of another person:

 

(a) must pay the money, within the time prescribed by the regulations, into a general trust account in New South Wales at an approved financial institution and must hold the money in accordance with the regulations relating to trust money, or

 

(b) if the person on whose behalf the money is received directs that it be paid or delivered to a third party free of the solicitor's control, must ensure that the money is paid or delivered:

(i) before the end of the next working day or, if that is not practicable, as soon as practicable after the next working day, or

 

(ii) no later than the day allowed by the solicitor's authority or instructions (if that day is later than the day allowed under subparagraph (i), or

 

(c) if the person on whose behalf the money is received directs that it be paid otherwise than into a general trust account or to a third party, must pay the money as directed and (if the money is to be held under the direct or indirect control of the solicitor) must hold the money in accordance with the regulations relating to controlled money.

 

(2) In any of those three cases, the solicitor must hold the money exclusively for, and must disburse the money in accordance with the directions of, the person on whose behalf it is held."

 

7               Section 62 of the 1987 Act provides:

"(1) A solicitor shall keep:

 

(a) in the case of trust money (within the meaning of section 61) accounting records, or

 

(b) in the case of money other than trust money such accounting records or other records (if any) as may be required by the regulations, that disclose at all times the true position in relation to money received by the solicitor on behalf of another person.

 

(2) The accounting records referred to in subsection (I) shall be kept in a manner that enables them to be conveniently and properly audited.

 

(3) Without limiting the generality of subsection (2), the accounting records referred to in subsection (I) shall, if the regulations so require, be kept in such manner as the regulations prescribe.

 

(4) A willful contravention of subsection (1), (2) or (3) is professional misconduct."

 

8               Rule 12 of the Revised Professional Conduct and Practice Rules 1995 ("The Solicitors’ Rules") provides:

"12.1 A practitioner must not borrow any money, nor assist an associate to borrow any money from a person —

 

12.1.1 who is currently a client of the practitioner, or the practitioner's firm;

 

12.1.2 for whom the practitioner or practitioner's firm has provided legal services, and who has indicated continuing reliance upon the advice of the practitioner, or practitioner's firm in relation to the investment of money; or

 

12.1.3 who has sought from the practitioner, or the practitioner's firm, advice in respect of the investment of any money, or the management of the person's financial affairs.

 

12.2 This Clause does not prevent a practitioner, or an associate of a practitioner borrowing from a client, which is a corporation or institution described in the Schedule to this Rule, or which may be declared by the Council of the Law Society to be exempt from this Rule.

 

12.3 A practitioner must not maintain a private finance company and invite, directly or indirectly, the deposit of money with the company on the basis of a representation that -

 

12.3.1              the money is repayable at call, or on short notice, if that is not assured when the money is deposited; or

 

12.3.2              that the deposit of the money is, or will be, secured, unless the money is specifically secured by an instrument identifying the lender, the amount deposited, and the security.

 

12.4 A practitioner must not borrow any money, or permit or assist an associate to borrow any money, from a private finance company which is operated or controlled by the practitioner or the associate of the practitioner.

 

12.5 A practitioner must not cause or permit a private finance company to pay to any depositors of money to the company a rate of interest on their deposits which is less than the rate charged by the company to borrowers.

            

The Schedule

            

1. A banker duly authorised to carry on banking business.

 

2. An insurance company duly authorised to carry on insurance business.

 

3. A company registered under the Life Insurance Act 1945 of the Commonwealth.

 

4. A building society registered under the Co-operation Act 1923 or listed in the Second Schedule to that Act.

 

5. A building society governed by the Financial Institutions Code 1992.

 

6. A credit union governed by the Financial Institutions Code 1992.

 

7. A trustee company mentioned in the First Part of the Third Schedule to the Trustee Companies Act 1964.

 

8. The Public Trustee.

 

9. A non-bank financial institution which is governed by the Financial Corporations Act 1974 of the Commonwealth or the Financial Institutions Code 1992.

 

10. A company the securities in which are listed on a member exchange of the Australian Associated Stock Exchanges or a foreign company the securities of which are quoted for trading on a stock exchange or in a market for the public trading in securities.

 

11. A government, governmental body, agency, department, authority or instrumentality, whether foreign, federal, state or local.

 

12. A company having the majority of its issued share capital to which voting rights attach owned by any government, governmental body, agency, authority or instrumentality, whether foreign, federal, state or local.

 

13. A company related to any of the companies referred to above or a company in which any entity of a type described above has a substantial shareholding as defined in Section 708(i) of the Corporations Law.

 

14. A member of the immediate family of the practitioner or a corporation, partnership, syndicate, joint venture or trust in which, or in the shares in which, the whole of the beneficial interest is presently vested in one or more members of the immediate family."

 

9               Section 496 of the 2004 Act provides:

"For the purposes of this Act:

 

"unsatisfactory professional conduct" includes conduct of an Australian legal practitioner occurring in connection with the practice of law that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent Australian legal practitioner".

10           Section 497 of the 2004 Act provides:

"(1) For the purposes of this Act: "professional misconduct" includes:

 

(a) unsatisfactory professional conduct of an Australian legal practitioner, where the conduct involves a substantial or consistent failure to reach or maintain a reasonable standard of competence and diligence, and

 

(b) conduct of an Australian legal practitioner whether occurring in connection with the practice of law or occurring otherwise than in connection with the practice of law that would, if established, justify a finding that the practitioner is not a fit and proper person to engage in legal practice.

 

(2) For finding that an Australian legal practitioner is not a fit and proper person to engage in legal practice as mentioned in subsection (1), regard may be had to the matters that would be considered under section 25 or 42 if the practitioner were an applicant for admission to the legal profession under this Act or for the grant or renewal of a local practising certificate and any other relevant matters."

 

11           The Solicitor's date of birth is not in evidence. However, he was admitted as a Solicitor in New South Wales on 11 May 1979. At all material times the Respondent was the sole principal of the firm known as 'White and Downey' which had its office in Balmain. He operated a Trust Account and an Office Account. Relevantly he also operated a bank account with the St George Bank ('the Undisclosed Account') held in the name of his wife.

12           On 21 July 2003 the Society refused to issue a Practising Certificate to the Solicitor for the year ending 30 June 2004 owing to his failure to lodge an Accountant's Report and it resolved to appoint a Manager to his practice. On 1 August 2003 the Supreme Court of New South Wales appointed a Receiver of the Solicitor's trust property and on 21 August 2003 the Society terminated the Manager's appointment.

13           The Application was particularised in detail. However, in his Amended Reply, the Solicitor stated (at paragraph 3):

"For the purposes of these proceedings only, the Respondent does not contest the grounds A-Q set out in the Application".

 

For this reason, the Tribunal does not intend to cite the Particulars of the Application in these Reasons.

14           The Solicitor did not appear at the Hearing of the matter. Rather, he sent a letter to the Tribunal in the following terms:

"I refer to your letter of 20 October 2010 and advise that I have no objection to the constitution of the Tribunal as therein advised.

 

Without intending any disrespect to the Tribunal, I will not be able to attend at the hearing of this matter on 26 November 2010 due to work commitments."

 

The Evidence

15           The Society relied upon Affidavits sworn by Raymond John Collins sworn 15 June 2010 and 1 November 2010, respectively, each of which was tendered with Exhibit Notes attached. This evidence was admitted into evidence on behalf of the Society.

16           The Solicitor did not file any Affidavit evidence and his Amended Reply indicated that he did not oppose the Tribunal making a protective order, but that he opposed the Tribunal making a costs order against him, for the following reasons (see paragraph 4):

"The Respondent relies upon the following material facts and circumstances:-

 

(a) The Respondent opposes Order 2 sought in the application on the grounds that, pursuant to Section 566 of the Legal Profession Act 2004 (NSW) ("the Act"), exceptional circumstances exist.

 

(b) The Respondent submits that exceptional circumstances exist pursuant to the Act for the following reasons:-

 

(i) The Respondent's stated position since the Applicant first foreshadowed these proceedings in March 2008 has been that he had no objection to his name being removed from the Roll of Legal Practitioners;

 

(ii) Since March 2008 the Respondent's position has always been that he did not wish to contest the alleged facts forming the basis of the Applicant's application. The Respondent's position was adopted in order to minimise costs and simplify any application which may be brought;

 

(iii) Notwithstanding those concessions, the Applicant has continued to amass costs in what should have been a simple application involving minimal preparation just to enliven the Tribunal's jurisdiction;

 

(iv) The Respondent became bankrupt on 24 April 2006 and was discharged from bankruptcy on 23 May 2009;

 

(v) The Respondent has worked as a subcontractor delivering telephone directories since December 2003 to 18 June 2010 and has, since this date, been seeking an alternative occupation as a bus operator with State Transit Authority. As at the date of this reply, the Respondent is unemployed and has minimal savings.

 

(c) Annexed hereto are copies of relevant correspondence between the Respondent and the Applicant.

 

(d) In the circumstances, the Respondent submits that there should be no order as to costs. Alternatively, if any such order is made, the costs order should reflect the fact that the Respondent has never sought to contest the order that he be removed from the Roll of Legal Practitioners. Accordingly, the Applicant's costs should be limited to one or two days only."

 

Findings and Considerations Relevant to Penalty

17           The Tribunal is satisfied that the evidence in this matter clearly supported and established the particulars in the Application, which the Solicitor admitted to, although he purported to do so "for the purposes of these proceedings only". Accordingly, we are satisfied that all of the Complaints particularised in the Application have been made out.

18           The Tribunal is also satisfied that the Solicitor was given ample opportunity to place any evidence that he wished to rely upon before it and indeed he was legally represented during the Society's investigation of the multiple complaints.

19           In New South Wales Bar Association v. Meakes [2006] NSWCA 340 ("Meakes"), Tobias JA said:

"Yet these were the very matters which were wholly within the knowledge of the respondent and which he was [sic] did not offer to answer in the witness box. On the contrary, he chose the safety of the well of the Tribunal. Notwithstanding the advice of his then senior counsel, the respondent's refusal to enter the witness box and provide evidence with respect to the matters referred to should have been the subject of harsh criticism by the Tribunal. Moreover, if that evidence had otherwise been relevant to the issue, his refusal to provide it would have significantly detracted from the weight to be attached to the tendered character references. In these circumstances, the only inference one can draw from the respondent's refusal to give sworn testimony in this matter was that his evidence would not have assisted his case in resisting a finding of professional misconduct.

 

The Tribunal should not have been required to speculate as to the basis upon which the respondent charged the fees he did. As an experienced barrister with an unblemished record, one would have expected him, as Meagher JA expressed it in Coe, to have mounted the witness box and explained the mysteries surrounding charges which had been found to be grossly excessive. In my opinion the failure of the respondent to give sworn evidence was inexcusable."

 

20           Further, in Coe v NSW Bar Association [2000] NSWCA 13 ("Coe"), Meagher JA (at [21]), with the agreement of Priestley JA, repeated with approval the following observations made by the Tribunal in that case and which are apposite to the present case:

"In the circumstances where a prima facie [case] against a legal practitioner has been presented and where the practitioner wishes the Tribunal to accept an explanation as to how the conduct came about it is inappropriate and irregular for the legal practitioner to attempt to do so through submission from the Bar table. If he wishes the Tribunal to accept some explanation as to how the conduct came to take place then in our view he has an obligation to meet the situation by explanation on oath."

21           In the absence of Affidavit evidence from the Solicitor in these proceedings, the only means of informing the Tribunal of his intentions at the time that the conduct (the subject matter of the grounds in the Application) occurred was by way of sworn oral evidence from the Solicitor. However, unlike the scenario in Meakes and Coe, the Solicitor chose not to attend the hearing. The Tribunal concurs with the views expressed by Tobias JA in Meakes in this regard.

22           The conduct that is the subject of these proceedings occurred between approximately 1995 and 2003, during which the 1987 Act was in force. However, as the current Application was filed after the commencement of the 2004 Act, the Savings and Transitional provisions of the 2004 Act apply.

23           Clause 17 of Schedule 9 of the 2004 Act provides that these proceedings are to be dealt with under the 2004 Act, save that the Tribunal may not make any determination or order of the disciplinary nature against the Solicitor that would be more onerous than could have been made under the 1987 Act. This does not concern the Tribunal as it was empowered to make the orders sought in the Application under both the 1987 and 2004 Acts.

24           Mr Barnes submitted that the evidence, which includes two (2) reports from Mr Watson as Receiver of the Solicitor's trust property, indicates that Mr Watson found it necessary to have the Solicitor, the Solicitor's wife and the Solicitor's daughter formally examined in the Supreme Court. In the Tribunal's view, this augers against a finding that the Solicitor co-operated with the Receiver during his investigation of his financial affairs.

25           Mr Barnes also submitted that the evidence indicates that the Solicitor engaged in a deliberate and persistent course of conduct between 1995 and 2003 which involved the misappropriation of significant amounts of trust monies he then applied for his own benefit and that of his immediate family. Further, in an effort to make good earlier misappropriations, he engaged in conduct that could be described as "robbing Peter to pay Paul", in which transactions were nearly always misdescribed on the relevant Trust ledgers. The benefit derived by the Solicitor and his family included the acquisition of real property and even the payment of the Solicitor's taxation liabilities.

26           The Tribunal is comfortably satisfied that all grounds of complaint particularised in the Application have been made out and that the Solicitor is guilty of Professional Misconduct as follows:

a  Multiple counts of misappropriation of trust monies (totalling $2,079,358.85);

b  Sixteen (16) counts of Wilfully breaching Section 61 of the Legal Profession Act 1987;

c  Fourteen (14) counts of Wilfully breaching Section 62 of the Legal Profession Act 1987;

d  Two (2) counts of breaching Rule 12 of the Revised Professional Conduct and Practice Rules 1995 by borrowing from his client;

e  Three (3) counts of causing a deficiency in his trust account; and

f  Two (2) counts of failing to account to his client.

27           The Tribunal is further satisfied that the Solicitor's conduct satisfies the test in Allinson v General Council of Medical Education and Registration [1894] 1 KB 750, namely:

"If it is shewn that a medical man, in the pursuit of his profession, has done something with regard to it which would be reasonably regarded as disgraceful or dishonourable by his professional brethren of good repute and competency, then it is open to the General Medical Council to say that he has been guilty of 'infamous conduct' in a professional respect."

28           The role of the Tribunal in making orders under s 562 of the 2004 Act is primarily to protect the public (see: Wentworth v New South Wales Bar Association (1992) 176 CLR 239 at 250-1). However, its orders can also be used to mark the community's disapproval of lapses from the high standard legitimately expected of legal practitioners and they also act as a general deterrent to other practitioners and therefore assist in maintaining proper standards within the legal profession (see: Law Society of New South Wales v Foreman (1994) 34 NSWLR 408 at 441 and New South Wales Bar Association v Hamman [1999] NSWCA 404 at [21]).

29           In view of the seriousness of the Solicitor's conduct, the Tribunal determined to remove his name from the Roll of Legal Practitioners pursuant to s 562(2)(a) of the 2004 Act, on the basis that he is clearly not a fit and proper person to be held out as a Legal Practitioner to the public (see: Foreman at 444 and see generally at 440 - 446).

30           In relation to the issue of costs of the Application and more particularly the Solicitor's "contest" to the making of an order for costs against him, the Tribunal notes that while the Amended Reply indicates that the Solicitor adopted his "position" of not wishing to contest the facts alleged in the Application "in order to minimise costs and simplify any Application which may be brought", he did not sign a Statement of Agreed Facts and/or Instrument of Consent, although a proposed Statement and Instrument were prepared by the Society and served upon him and are in evidence.

31           It is also apparent that the Solicitor believed that all that was required for the Society to secure the making of a protective order was for it to file an Application "just to enliven the Tribunal's jurisdiction". However, his belief is not soundly based.

32           The Tribunal's role in this regard was considered by the Tribunal in Council of the New South Wales Bar Association v Butland [2009] NSWADT 177, although in that matter the parties tendered a signed Instrument of Consent and invited the Tribunal to make orders by Consent under s 564(1) and s 154(1) of the 2004 Act. The Tribunal held:

“29 Section 564(1) and (10) of the Legal Profession Act make it plain that the Tribunal has a discretion whether or not to make orders consented to in an instrument of consent under that section. The Tribunal does not act, nor should it be seen, as merely a "rubber stamp " - see the comments of the Federal Court in a similar context in Australian Communications and Media Authority v WE.NET.AU Pty Ltd [2008] FCA 1530 at [8J. Nonetheless, the consents of the parties and the Legal Services Commissioner are matters that deserve significant weight.

 

30. These circumstances are similar to, and some guidance can be derived from, cases where Courts exercising regulatory or disciplinary powers are presented with joint submissions by the parties (often including the relevant regulator) as to the appropriate civil penalties and consent orders which they request the Court to make. These often occur in matters under the civil penalty regimes such as those established by the Trade Practices Act 1974 (Cth) or the Corporations Act 2001 (Cth) and involving, respectively, the Australian Competition and Consumer Commission or the Australian Securities and Investments Commission.

 

31. Barrett J set out the Supreme Court's approach to consent orders in regulatory matters (including orders in relation to disqualification from management) under the Corporations Act and related legislation in Australian Securities and Investments Commission v Elm Financial Services Pty Ltd (2005) 55 ACSR 411; [2005] NSWSC1020, as follows:-

 

"9 The parties have, in each case, agreed the duration of the disqualification. That, however, does not absolve the court of its duty to consider the appropriateness of the penalty in the light of the agreed facts and the surrounding circumstances. This is made clear by the decisions of the Full Federal Court in NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission [1996] FCA 1134; (1996) 71 FCR 285 and, more recently, Minister for Industry Tourism and Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72; [2004] ATPR 41-993 (and see, in the present statutory context, Australian Securities and Investments Commission v Vizard (2005) 54 ACSR 395). In the Mobil Oil case (at [51]) the following propositions were seen as emerging from the reasoning in NW Frozen Foods:

 

"(i) It is the responsibility of the Court to determine the appropriate penalty to be imposed under s 76 of the TP Act in respect of a contravention of the TP Act.

 

(ii) Determining the quantum of a penalty is not an exact science. Within a permissible range, the courts have acknowledged that a particular figure cannot necessarily be said to be more appropriate than another.

 

(iii) There is a public interest in promoting settlement of litigation, particularly where it is likely to be lengthy. Accordingly, when the regulator and contravenor have reached agreement, they may present to the Court a statement of facts and opinions as to the effect of those facts, together with joint submissions as to the appropriate penalty to be imposed.

 

(iv) The view of the regulator, as a specialist body, is a relevant, but not determinative consideration on the question of penalty. In particular, the views of the regulator on matters within its expertise (such as the ACCC's views as to the deterrent effect of a proposed penalty in a given market) will usually be given greater weight than its views on more i(subjective " matters.

 

(v) In determining whether the proposed penalty is appropriate, the Court examines all the circumstances of the case. Where the parties have put forward an agreed statement of facts, the Court may act on that statement if it is appropriate to do so.

 

(vi) Where the parties have jointly proposed a penalty, it will not be useful to investigate whether the Court would have arrived at that precise figure in the absence of agreement. The question is whether that figure is, in the Court's view, appropriate in the circumstances of the case. In answering that question, the Court will not reject the agreed figure simply because it would have been disposed to select some other figure. It will be appropriate if within the permissible range."

 

10 There has been some criticism of this approach as involving "platitudes": see per Weinberg J in Australian Prudential Regulation Authority v Derstepanian [2005] FCA 1121. And in Vizard (above), the court imposed a higher penalty than that agreed by the partiers and sought by the regulator.

 

11 It is clear that the court is in no way constrained by the parties' agreement and that, having made the declaration of contravention, it must exercise its discretion as to penalty. In the present case, the factual background does not, to my mind, indicate that the respective periods of disqualification proposed by the parties are inadequate.

 

32. This approach was subsequently adopted by Brereton J in Australian Securities and Investments Commission v Maxwell (2006) 59 ACSR 373, [2006] NSWSC1052.

 

33. If the necessary adjustments to these principles are made to take into account, the express statutory regime under s.564 of the Legal Profession Act and the particular nature of the disciplinary powers being exercised by the Tribunal, we believe they provide useful guidance as to the exercise of the Tribunal's discretion in cases such as the present."

 

33           For these reasons, the Tribunal finds that the Society's actions in filing and prosecuting the Application, which necessarily involved costs associated with preparation of the Application for hearing, are justified. We find that there are not exceptional circumstances that support the Solicitor’s Application and we order that he pay the Society's costs of the Application, as agreed or assessed.

Decision last updated: 01 August 2011