Administrative Decisions Tribunal New South Wales

• Medium Neutral Citation: Council of the Law Society of NSW v Chau [2011] NSWADT 271
• Hearing dates: 21 September 2011
• Decision date: 21 September 2011
• Jurisdiction: Legal Services Division
• Before: M Riordan (Judicial Member); S Hale (Judicial Member); C Bennett (Non Judicial Member)

Decision

1.The Solicitor has engaged in Professional Misconduct.

2.The Solicitor is reprimanded.

3.The Solicitor is to pay a fine of $3,000 within six (6) months of 21 September 2011.

4.The solicitor is to pay the Applicant's costs, as agreed or assessed.

• Catchwords: Solicitor - disciplinary application - professional misconduct - falsely purporting to witness deponent's signature to an Affidavit - Instrument of Consent - Approval with amendments.
• Legislation Cited: Legal Profession Act 2004
• Cases Cited: Allinson v General Council of Medical Education and Registration, [1894] QBD 750 at 768; Fraser v The Law Society, [1992] NSWLST 6; Council of the Law Society of NSW v Ly, [2011] NSWADT 210; Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534; Norbis v Norbis [1986] HCA 17; (1986) 161 CLR 513
• Texts Cited: Report of Committee on Costs in Criminal Cases (NZ), (1966), par.30
• Category: Principal judgment
• Parties: Council of the Law Society of New South Wales (Applicant); Michael Chau (Respondent)
• Representation: Counsel; P Griffin (Respondent); Council of the Law Society of NSW (Applicant); Office of the Legal Services Commissioner (Respondent)
• File Number(s): 112002

REASONS FOR DECISION

1 In this case the Law Society of New South Wales (the Law Society) filed an Application for Original Decision on 10 February 2011, alleging that the Respondent, Michael Chau (the Solicitor") had been guilty of professional misconduct while practising as a solicitor.

2 The Law Society sought orders that the Solicitor be reprimanded and that he pay both a fine and its costs of the Application, together with such further and other Order as the Tribunal deemed appropriate.

3 The Application claimed that the relevant conduct of the Solicitor amounted to professional misconduct on the following grounds:

(1) He falsely purported to witness Thanh Dot Tong's signature to an affidavit dated 2 December 2007;

(2) His signature appears as witness to the signature of Thanh Dot Tong on an Affidavit sworn/affirmed on 2 December 2007; and

(3) He was not present when the deponent swore/affirmed the affidavit on 2 December 2007.

4 In his Reply, the Solicitor admitted the conduct described in the particulars to the Application and the Law Society's claim that his conduct constituted professional misconduct.

5 On 28 August 2011 the parties filed an Instrument of Consent under section 564 of the Act. It was signed by the Applicant, the Solicitor and the Legal Services Commissioner, although the date of execution by the Legal Services Commissioner was not indicated in the Instrument. In our view, the absence of the date of execution does not vitiate it.

6 The Instrument This contained a statement of agreed facts (as per the particulars in the Application) and indicated that the parties had consented to the following orders:

"(1) Michael Chau is to pay a fine of $ .00 within months from the date of approval of this instrument;

(2) Michael Chau be publicly reprimanded;

(3) For a period of three years from the date of approval of this instrument the following conditions be imposed on any practising certificate held by Michael Chau:

(a) He to only hold a restricted practising certificate and any application by him to be granted an unrestricted practising certificate to be conditional upon him satisfying all standard requirements and remaining in the employ of such practitioner as may be approved from time to time by the Council of the Law Society of New South Wales, for a continuous period of three (3) years;

(b) He undertaking at least one course each year in the areas of ethics and trust accounts, and any such other course as the Council of the Law Society so directs, for a period of three (3) years;

(4) Michael Chau is to pay the costs of the council of the Law Society of New South Wales in these proceedings as agreed or assessed."

7 After the evidence had been tendered and submissions completed, the Tribunal adjourned briefly and then delivered an Ex-Tempore decision. We indicated that we would publish our reasons in due course.

Ex-Tempore Decision

8 The Tribunal's decision was in the following terms:

"1. The Tribunal accepts the agreed facts and finds that the Respondent is guilty of professional misconduct, having been satisfied to the required standard.

2. The Tribunal orders:

1. The Respondent is to pay a fine of $3,000 within six (6) months of today.

2. The Respondent is to be publicly reprimanded.

3. For a period of three (3) years from the date of issue of any further practising certificate to the Respondent the following conditions shall be imposed thereon:

a. He is to only hold a restricted practising certificate and any application by him to be granted an unrestricted practising certificate to be conditional upon him satisfying all standard requirements and remaining in the employ of such practitioner as may be approved from time to time by the Council of the Law Society of New South Wales, for a continuous period of three (3) years;

b. He is to undertake at least one course each year in the areas of ethics and trust accounts, and any such other course as the Council of the Law Society so directs, for a period of three (3) years;

4. Michael Chau is to pay the costs of the council of the Law Society of New South Wales in these proceedings as agreed or assessed.

Statement of Reasons for Decision

9 Regardless of the concession from the Solicitor that his conduct amounts to professional misconduct, the Tribunal must be comfortably satisfied that this is the case and this involves the consideration of the non-exclusive definition of "professional misconduct" in the Act and the significant volume of case law on this issue.

10 The common law concept of professional misconduct was clearly stated in Allinson v General Council of Medical Education and Registration, [1894] QBD 750 at 768, in which Lopes LJ approached the definition of the term "infamous conduct" as follows terms:

"Then I come to the question of 'infamous conduct in a professional respect,' and, in my opinion, if there was any evidence on which the council could reasonably have come to the conclusion to which they did come, their decision is final. If, on the other hand, there was no evidence upon which they could reasonably arrive at that conclusion, then their decision can be reviewed by this Court. It is important to consider what is meant by 'infamous conduct in a professional respect.' The Master of the Rolls has adopted a definition which, with his assistance and that of my brother Davey, I prepared. I will read it again: 'If it is shown 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.'"

11 There is no doubt that the solicitor's conduct is serious and that the obligation to properly witness Affidavits is fundamental to the efficient administration of justice as members of the Judiciary, fellow legal practitioners and other persons involved in the litigation process must be able to have confidence that the evidence contained in an Affidavit is a true and accurate record of the witness' evidence. In our view, his failure to properly witness the affidavit not only calls into question the Solicitor's honesty and ethics, but also contributes to the erosion of the public's confidence in the honesty and reliability of the legal profession as a whole.

12 For these reasons, we have determined that his conduct is of the type that would reasonably be regarded as disgraceful or dishonourable by his professional brethren of good repute and competency and that it constitutes professional misconduct at common law.

13 Before considering whether we should make orders in accordance with the Instrument of Consent, it was necessary to refer to evidence in the Solicitor's case.

14 The Solicitor was admitted to practice on 1 November 1991. He gave evidence that on 30 June 2010 he advised the Applicant that he had closed his legal practice, which was then known as "Metrop Lawyers" and that there was no work in progress. We note that in correspondence to the Applicant, the Solicitor indicated that he decided to close his practice and to not renew his practising certificate as a result of these matters.

15 In his Affidavit the Solicitor stated that he had commenced employment with Strathfield Council as the Manager, Community Services on 3 September 2010. However, on 18 January 2011 he was directed to go on leave as the Independent Commission Against Corruption ("ICAC") advised Strathfield Council that it had decided to conduct a public hearing in relation to an allegation that he solicited a payment for his own benefit.

16 The Solicitor also referred to the Report issued by ICAC on 12 May 2011, entitled "Investigation into the Solicitation of a Corrupt Payment by a Strathfield Municipal Council Officer", and stated:

"The Commissioner was satisfied that:

(i) between 28 August 2010 and 2 September 2010, I falsely represented to Armstrong that I had been authorised by the Council to act on its behalf for the purpose of promoting the adoption of the PICS technology by the Council, when I had not been so authorised;

(ii) during the same period, I made various statements to Armstrong with the intention of causing him to believe that I was acting in a way that was favourable to Armstrong, Tenix Solutions and VMS in relation to the Council's consideration of their business proposal;

(iii) I engaged in this conduct with the intention of soliciting a payment of money from Armstrong on account of such favourable action; and

(iv) on 3 September 2010, I solicited a payment of $10,000 from Armstrong, which I intended to use for my own benefit."

17 The Solicitor also stated that the Commissioner found that he had engaged in corrupt conduct and recommended that consideration be given to obtaining advice from the Director of Public Prosecutions ("DPP") with respect to his prosecution for an offence of soliciting a corrupt payment under Section 249B(I) of the Crimes Act 1900 and taking action against him as a public official with a view to dismissing, dispensing with or otherwise terminating his services. He received notice from Strathfield Council requiring that he "show cause" as to why his employment should not be terminated.

18 We note that the Solicitor's evidence was that he met with representatives of Strathfield Council on 19 May 2011 and that he was advised that a decision was imminent as to whether or not his employment would be terminated. However, as at the date of the hearing he had not yet been notified of a decision regarding his employment by the Council. He also did not know whether the DPP had decided to take any action against him, although he had been advised by ICAC that it had referred the papers to the DPP.

19 In the meantime, the Solicitor stated that he remained on paid leave from the Council, but he had lost the use of an all-expenses-paid motor vehicle and a mobile phone.

The matters raised by the Solicitor arising from his employment with Strathfield Council and particularly the investigations and findings made by ICAC are not part of the Applicant's case and it was not necessary for us to make any findings in relation to those matters. In any event, we note that those matters have not yet been finalised and it would not be appropriate for us to make any findings on those matters, although they are relevant to the issue of the penalty to be imposed.

20 By way of an explanation for his misconduct, we note that in his Statutory Declaration dated 28 July 2009, the Solicitor stated:

"19. The Complainant was most reluctant to agree to be a witness for Tanya Nguyen and indicated a high degree of trepidation in doing so. He partly agreed because of the good relationship established during the work done by my firm on his behalf.

20. I was concerned that if I demanded that the Complainant return to my office to re-execute his affidavit he would refuse and may decline to give evidence in court."

This, of course, does not excuse the conduct.

21 Further, in his letter to the Applicant dated 19 October 2010 the Solicitor accepted that he had acted improperly and said that he accepted that his conduct warranted a reprimand. However, he made lengthy submissions to the effect that a fine should not also be imposed upon him, namely:

"(a) I have not derived any financial benefit from my misconduct.

(b) It was not premeditated but arose when Tong failed to respond to calls to return to the office.

(c) I have closed my legal practice and have no present intention of recommencing practice as a solicitor.

(d) I am employed by Strathfield Council and receive a net income of $66,731. Nearly half of this amount is consumed by mortgage payments. I have current outstanding debts, e.g. credit card and legal fees, of $10,000. The balance of my income goes to recurrent expenditure. I have no savings except for superannuation.

In all the circumstances I submit that I should not be fined."

22 We favourably regard the fact that the Solicitor recognises that he acted improperly, although we note that in his Affidavit and oral evidence he did not actually express contrition for his conduct. There was no evidence before us that he undertook any courses aimed at increasing his knowledge of legal ethics or professional practice. However, this could possibly be explained on the basis that he closed his legal practice in 2010 and did not apply for a 2011 Practising Certificate and in any event, the orders that we have made require that he undertake further educational courses as a condition of issue of a further practising certificate.

23 On behalf of the Solicitor, Mr Griffin submitted that it was open to the Tribunal to not impose a fine on the Solicitor, as the power conferred under Section 562(4)(a) of the Act is discretionary where there is a finding of professional misconduct and in any event, the fine cannot exceed $75,000.

24 Mr Griffin submitted that the general principle expressed by the Court of Appeal requires consideration to be given to the protection of the Community and he argued that the community is currently protected as the Solicitor does not hold a current practising certificate. He also stated that the imposition of a fine should be aimed at ensuring that the decision has a deterrent effect; and that it will encourage members of the legal profession to maintain high standards; and encourage the public's confidence in the legal profession.

25 We note that the Court of Appeal considered the imposition of a fine in the matter of Fraser v The Law Society, [1992] NSWLST6 (decision dated 7 August 1992). In that matter a solicitor had falsely certified that he had explained mortgage documents to mortgagors knowing that the certificate would be relied upon by the mortgagee. He compounded this misconduct by subsequently assuring the mortgagee's solicitor that he had signed the certificate and in effect that he had given the appropriate explanation. The Legal Profession Disciplinary Tribunal struck off Mr Fraser and Mr Fraser Appealed.

26 In the course of his reasons Justice Kirby stated:

"The duty of this court is to protect the public, to uphold the standards of the legal profession and to mark the approbation of the conduct of legal practitioners who engage in fraud of whatever kind. Such duty raises legal and social considerations somewhat different from fraud and insurance claims. Insured's come from all backgrounds. Solicitors enjoy special privileges and submit to special duties as a consequence, however fraud clearly manifests itself in a number of different ways. The fraud to which the appellant admitted in this case was potentially serious but in the event it had serious consequences only for the appellant himself. I do not believe that fraud as such admitted or proved requires in every case without more the removal of the name of a solicitor from the roll. It is necessary to examine in each case the nature of the fraud involved. Many acts of fraud will indeed require removal from the roll. In other cases a less dramatic determination will be appropriate."

His Honour also stated:

"As a result of the foregoing analysis I have concluded that the proved and admitted behaviour of the appellant was professional misconduct but I do not believe that it requires the removal of his name from the roll. He should be afforded another chance. It is inconceivable that he would ever err in the same way again. I take into account in coming to this conclusion the appellant's age, his experience as a solicitor today, the attitude of helpfulness which he appears to display to his clients and the good opinion expressed of him by a fellow practitioner and a Member of Parliament in statements placed before the Court. It is also impossible to ignore the fact that by operation of the Tribunal's order the appellant has been disqualified from practice as a solicitor for more than seven months."

27 Justice Handley expressed the following view:

"I am satisfied from this review of the earlier decisions that if this Court were now to allow this appeal it would not be departing from prior authority and would not be sanctioning any lowering of the standards which its predecessors had required from the solicitors of this Court. In my opinion however the Tribunal acted correctly on the material before it in striking the appellant from the rolls. A solicitor who commits fraud without knowing that he has done so in my opinion is not a fit and proper person to remain on the roll. That situation has now changed.

I believe that this Court would now be justified in concluding that this appellant will never again give a false certificate. So far as the evidence reveals and there is nothing to suggest otherwise this was an isolated departure from proper professional standards. The appellant is still young with limited experience and as a result of these proceedings he will be both a sadder and a wiser man. He has now been off the roll of solicitors for over seven months. In my opinion therefore the requirements of this disciplinary and protective jurisdiction will be fully met if this Court were to make the orders proposed by President Kirby."

28 Further, we note that Justice Cripps held:

"The strength of the Society's case against Mr Fraser is that it not only did he furnish a certificate which he knew to be false and which he knew was intended to be relied upon by the mortgagee but that he did not take the opportunity to disabuse Mr Morton when he could have done so.

There can be no question of that conduct amounted to professional misconduct. Furthermore the circumstances that he did not charge for the certificate is I think irrelevant. I've come to the conclusion that the appellant recognises the extent and gravity of his conduct and that it fell far short of the standards required to be observed by practising solicitors. In formulating the order I place on record that I paid no regard to any claim of personal hardship and I note that it has not been put that Mr Fraser's conduct was a result the pressure of work. The essential function of the Court is not to decide an appropriate punishment, it is to determine what order should be made bearing in mind the evident purpose of the legislative provisions, that is to protect members of the public by not exposing them to persons who are unfit to practise as solicitors and to promote and maintain public confidence in the legal system.

Section 163 of the Legal Profession Act provides that if the Tribunal is satisfied that a legal practitioner is guilty of professional misconduct it may order the practitioner's practising certificate to be cancelled or suspended order the practitioner's name be removed from the roll of solicitors, order that the practitioner pay a fine, or a combination of any of those things. Notwithstanding that a fine is ordinarily seen in the nature of a punishment it must be assumed that the imposition of a fine is regarded by the legislature as an appropriate means whereby public confidence in the legal system can be maintained.

I do not think Mr Fraser is unfit to practise by reason of his proved misconduct. In my opinion the imposition of a fine will meet the demands of justice in this case."

29 Applying the statements of Principle in Fraser to the current matter, we are satisfied that although the Solicitor's conduct was serious, it does not require the removal of his name from the roll of legal practitioners.

30 We further note that the decision in Fraser was discussed and applied by the Tribunal in the recent matter of The Council of the Law Society of NSW v Ly [2011] NSWADT 210. In that matter, the Tribunal considered a matter in which the Solicitor falsely witnessed a person's signature on a number of documents including mortgage documents and falsely certified having sighted that person's original forms of identification. We have been guided and assisted by the Tribunal's decision in that matter.

31 In this matter, both the Applicant and the Legal Services Commissioner, who are charged with administering the Legal Profession Act, did not seek to have the Solicitor's name removed from the roll. Rather, they consented to the implementation of less severe orders and we have decided to afford their decisions considerable weight.

32 The evidence before us indicates that the matters before us represent a one-off occurrence rather than a pattern of behaviour on the Solicitor's part. We are also satisfied from his acceptance that his conduct constitutes professional misconduct and his co-operation with the authorities that he is unlikely to engage in any further conduct of a like nature. In other words, we do not regard him as being permanently unfit to practice.

33 We also find that these matters and their consequences have had significant financial repercussions for the Solicitor.

34 In all of the circumstances, we felt it appropriate to order that the Solicitor should be publicly reprimanded, and we so ordered.

35 Further, while we accepted that the imposition of a fine is discretionary, in view of our educative role and our wish to discourage other legal practitioners from engaging in similar conduct, we decided that a fine of $3,000 was appropriate, to be paid within a period of six (6) months from 21 September 2011.

36 However, we did not regard the proposed Order 3 of the Instrument of Consent as appropriate, as on a strict reading it seeks to implement a regime under which the outlined restrictions would be imposed on any further practising certificate issued to the Solicitor, but only if the certificate was issued to the Solicitor within a period of three (3) years from the date of approval of the Instrument. However, those restrictions would not be mandatory if the Solicitor did not apply for a further practising certificate until after that three (3) year period had expired.

37 Accordingly, the Tribunal determined that it was appropriate to order that the restrictions outlined in Order 3 of the Instrument of Consent should be applied to any further practising certificate issued to the Solicitor, regardless of when it is issued.

38 In relation to the issue of costs, Mr Boyd advised that the Applicant's costs are approximately $3,000. He relied upon the decision of the High Court of Australia in the matter of Latoudis v Casey (1990) 170 CLR 534 (decision 20 December 1990) and argued that the Court held that a costs order should be made if it is just and reasonable to do so.

39 In Casey the High Court considered what, if any, criteria were to be applied by a Court of summary jurisdiction in exercising a statutory jurisdiction to award costs in criminal proceedings that were terminated in favour of the defendant. Mason CJ stated:

"10. In referring to the approaches that have been taken in various States and Territories to the award of costs to a successful defendant, I have not taken the trouble to set out the relevant statutory provisions. That is because, with the exception of Tasmania, the courts have been given a general statutory discretion which has not been constrained, even by prescription of relevant considerations or criteria. Thus, as in Puddy v. Borg, the courts have been correct to emphasize the unconfined nature of the discretion. But it does not follow that any attempt to formulate a principle or a guideline according to which the discretion should be exercised would constitute a fetter upon the discretion not intended by the legislature. Indeed, a refusal to formulate a principle or guideline can only lead to exercises of discretion which are seen to be inconsistent, a result which would not have been contemplated by the legislature with any degree of equanimity. I venture to repeat the comments made by Deane J. and myself in Norbis v. Norbis [1986] HCA 17 ; (1986) 161 CLR 513 , at p 519:

"The point of preserving the width of the discretion

which Parliament has created is that it maximizes the

possibility of doing justice in every case. But the need

for consistency in judicial adjudication, which is the

antithesis of arbitrary and capricious decision-making,

provides an important countervailing consideration

supporting the giving of guidance by appellate courts,

whether in the form of principles or guidelines."

11. By conferring on courts of summary jurisdiction a power to award costs when proceedings terminate in favour of the defendant, the legislature must be taken to have intended to abrogate the traditional rule that costs are not awarded against the Crown. Yet in Victoria and Queensland, the emphasis given by the courts to the unfettered nature of the discretion to award or withhold costs has resulted in practice in costs not being generally awarded against a police officer who is an informant, a result which could scarcely have been intended by the legislature when it enacted s.97(b) of the Act. Once that proposition is accepted, as in my view it must be, there is no sound basis for drawing a distinction in relation to the award of costs against an unsuccessful informant between summary proceedings instituted by a police or other public officer and those instituted by a private citizen. In the case of proceedings commenced by a private prosecutor which terminate in favour of the defendant, the private prosecutor should in ordinary circumstances be ordered to pay the costs, even if he or she initiates the proceedings for a public rather than a private purpose.

12. In ordinary circumstances it would not be just or reasonable to deprive a defendant who has secured the dismissal of a criminal charge brought against him or her of an order for costs. To burden a successful defendant with the entire payment of the costs of defending the proceedings is in effect to expose the defendant to a financial burden which may be substantial, perhaps crippling, by reason of the bringing of a criminal charge which, in the event, should not have been brought. It is inequitable that the defendant should be expected to bear the financial burden of exculpating himself or herself, though the circumstances of a particular case may be such as to make it just and reasonable to refuse an order for costs or to make a qualified order for costs. As the Report of Committee on Costs in Criminal Cases (N.Z.), (1966), par.30, stated:

"Because we cannot wholly prevent placing innocent persons in jeopardy that does not mean that we should not as far as is practicable mitigate the consequences."

40 In the absence of any extraordinary circumstances, we have determined that having succeeded in its Application, it would not be just or reasonable to deprive the Applicant of its costs and we ordered that the Solicitor should pay the Applicant's costs as agreed or assessed.

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Decision last updated: 17 November 2011