Administrative Decisions Tribunal New South Wales

• Medium Neutral Citation: Council of the New South Wales Bar Association v Miller (No 2) [2012] NSWADT 129
• Hearing dates: On the papers
• Decision date: 04 July 2012
• Jurisdiction: Legal Services Division
• Before: M Chesterman, Deputy President; L Robberds QC, Judicial Member; C Bennett, Non-judicial Member

Decision

1. The name of the Respondent is to be removed from the local Roll.

2. The Respondent is to pay the Applicant's costs of and incidental to these proceedings.

• Catchwords: Disciplinary application - barrister - findings of professional misconduct and unsatisfactory professional conduct - whether removal of name from Roll is warranted - costs
• Legislation Cited: Administrative Decisions Tribunal Act 1997; Duties Act 1997; Legal Profession Act 1987; Legal Profession Act 2004
• Cases Cited: Allinson v General Council of Medical Education and Registration [I894] 1 QB 750; Bar Association of NSW v Miller (No 2) [2011] NSWADT 148; Briginshaw v Briginshaw (1938) 60 CLR 336; Council of the Law Society of New South Wales v Rook [2011] NSWADT 191; Council of the Law Society of NSW v Treanor [2009] NSWADT 115; Council of the New South Wales Bar Association v Miller [2011] NSWADT 297; Council of the New South Wales Bar Association v Sahade [2007] NSWCA 145; Johns v Law Society of New South Wales [1982] 2 NSWLR 1; Kennedy v The Council of the Incorporated Law Institute of New South Wales (1939) 13 ALJ 563; Law Society of New South Wales v Harvey [1976] 2 NSWLR 154; Law Society of New South Wales v Moulton [1981] 2 NSWLR 736; Prothonotary of the Supreme Court of New South Wales v P [2003] NSWCA 320; A Solicitor v Council of the Law Society of New South Wales (2004) 216 CLR 253; [2004] HCA 1
• Category: Consequential orders
• Parties: Council of the New South Wales Bar Association (Applicant); James Mathew Miller (Respondent)
• Representation: Counsel; K Williams (Applicant); Eakin McCaffery Cox (Applicant); No appearance (Respondent)
• File Number(s): 112004, 112008

DECISION

Our first decision in these proceedings

1 This decision concerns the consequential orders to be made by us following our findings of professional misconduct and unsatisfactory professional conduct in two Disciplinary Applications filed by the Council of the New South Wales Bar Association ('the Bar Association') against the Respondent, James Mathew Miller.

2 The earlier of these Applications (file number 112004 - 'the First Application') was filed by the Bar Association on 23 February 2011. The later Application (file number 112008 - 'the Second Application') was filed on 4 April 2011. In both of them, the orders sought against the Respondent included one or more orders under section 562(2) or (4) of the Legal Profession Act 2004 ('the LP Act') and an order for costs.

3 The Respondent did not appear in the proceedings and he did not file a Reply or any evidence.

4 At a joint hearing of both Applications on 18 and 19 August 2011, we received evidence to the effect that he had been appropriately notified of all relevant aspects of the proceedings and we acceded to an application by the Bar Association for leave to proceed in his absence. We then admitted evidence tendered by the Association in support of the matters alleged in its two Disciplinary Applications and heard submissions from its counsel, Ms Williams.

5 In a decision dated 14 December 2011 (Council of the New South Wales Bar Association v Miller [2011] NSWADT 297 - hereafter 'our first decision'), we set out our reasons for granting leave to the Bar Association to proceed ex parte and for concluding that the Respondent had been guilty of professional misconduct and unsatisfactory professional conduct by virtue of the matters alleged in the two Applications.

6 The Respondent is an Australian Lawyer within the meaning of the LP Act. He was admitted to the Supreme Court Roll of Legal Practitioners (as it then was) on 14 December 2001 and obtained a barrister's practising certificate on 15 February 2002. He held a current local practising certificate until it was suspended with effect from midnight on 6 April 2009. It was subsequently cancelled with effect from midnight on 1 May 2009.

7 The First Application. In this Application, the Bar Association put forward two Grounds. All of the conduct of the Respondent described in it occurred during the period when he held a barrister's practising certificate.

8 Ground 1 alleged that during the period between September 2006 and October 2008 the Respondent sought, accepted and failed to repay on request an unsecured loan of $150,000 ('the Loan') from a person ('the Client') for whom he was then acting in court proceedings.

9 In relation to this Ground, we made a finding of professional misconduct, both at common law and under the statutory definition contained in section 497(1)(b) of the LP Act. The following extracts from our first decision (at [96 - 99], [101] and [106]) explain our principal reasons for these conclusions:-

96 We are satisfied that the Respondent's behaviour in requesting and accepting the Loan was conduct that 'would reasonably be regarded as disgraceful or dishonourable' by his 'professional brethren of good repute and competency' (Allinson v General Council of Medical Education and Registration [I894] 1 QB 750 at 763) and that was 'indicative of a failure either to understand or to practise the precepts of honesty or fair dealing in relation to... his clients...': Kennedy v The Council of the Incorporated Law Institute of New South Wales (1939) 13 ALJ 563 per Rich J at 92. This conclusion follows, we believe, from the Court of Appeal's strong disapproval of broadly similar breaches of fundamental duties of good faith towards clients by the respondent solicitor in Law Society of New South Wales v Moulton [1981] 2 NSWLR 736 and from the general principles stated by the Court both in that case and in Law Society of New South Wales v Harvey [1976] 2 NSWLR 154.

97 In Harvey the Court of Appeal took account of the fact that most of the clients concerned were inexperienced in matters of investment and some of them completely lacked any understanding of these matters. In some of the loan transactions dealt with in Moulton, the respondent was acting as an executor holding funds on trust for infant beneficiaries. In the present case, the Client was not, it may be assumed, 'vulnerable' in either of these ways. But the Respondent's assertion that he might be struck off if his request for the Loan was not granted, thereby leaving the Client without a barrister to continue representing him in the Supreme Court proceedings, put pressure on the Client to accede to this request. In that specific manner, the Client may be considered to have been 'vulnerable'.

98 Furthermore, we have found (see [75 - 77] above) that the Respondent must have known that by saying he was 'in a desperate situation' because he had 'a tax bill due', he conveyed a misleading impression as to his ability to repay, by virtue of the scale of his undisclosed liabilities for income tax. This statement left it open for the Client to infer that if he made the Loan, the Respondent's financial problems would be solved. A reading of the passage from Hutley JA's judgment in Moulton listing the steps that the respondent solicitor would have had to take to comply with his fiduciary duties (see [89] above) clearly demonstrates that the half-truth conveyed by the Respondent amounted to wholly inadequate disclosure of his financial situation. His Honour included the following two steps in his list:-

(c) as he stressed the fact that his personal covenant was important to the security of the borrower, make a full disclosure of his own personal financial position;

(d) because he was married and his own financial position might at any time be radically altered by any matrimonial dispute which could involve the property of both members of the family, make a full disclosure of his wife's financial position;

99 In the present case, it may be observed, the 'personal covenant' of the Respondent was not merely 'important'. It was all that was offered to the Client.

101 As to Ms Williams' submissions regarding the Respondent's email of 15 October 2008, we agree that... his allegations that the Client had 'repeatedly stated' that the Loan need not be repaid to any extent and that any repayment by him would therefore be 'voluntary' constituted an attempt to 'water down and escape from' his legal obligation to repay part of it. We reach this conclusion because we are satisfied that at the time when the Respondent made these allegations he must have known that they were untrue...

106 Our decision under [section 497(1)(b) of the LP Act] is predicated on our opinion that the Respondent's conduct in relation to the Loan was conduct that, to quote from the provision, 'would justify a finding' that he is 'not a fit and proper person to engage in legal practice'. For reasons given by Basten JA in Council of the New South Wales Bar Association v Sahade [2007] NSWCA 145 at [53 - 75] (referring to the predecessor of this provision in the Legal Profession Act 1987, section 127(1)(b)), this does not mean that we have found the Respondent at the present time to be not 'fit and proper' to engage in legal practice. As his Honour explained, the purpose of this phrase in section 127(1)(b) was to describe past conduct of a legal practitioner that would constitute professional misconduct, not to frame a criterion to be applied to the current situation of a practitioner against whom disciplinary proceedings had been instituted.

10 Ground 2 of the First Application alleged that during the months of May and June 2008 the Respondent negligently failed to provide advice, and provided negligent advice, in relation to stamp duty payable by the Client on a property transaction in which the Client was involved. He seriously misled the Client by stating that the transaction would be liable to only nominal duty, whereas in fact a substantial sum was payable under section 30 of the Duties Act 1997. In addition, he failed to advise the Client as to how the transaction might be differently structured so as to minimise stamp duty or indeed to support a claim for exemption from duty. In consequence of this negligence, the Client agreed to settle litigation on terms that he would or might not have accepted if he had known that a substantial amount of stamp duty was payable.

11 In relation to this Ground, we held that the relevant conduct of the Respondent fell 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' and therefore amounted to unsatisfactory professional conduct. In explaining our decision, it is sufficient here to supplement what we have already said by repeating paragraphs [133] to [135] of our first decision:-

133 In our opinion, the Bar Association's claim that the Respondent engaged in unsatisfactory professional conduct is clearly made out, for the reasons elaborated by Ms Williams. We endorse those reasons and would add only two brief observations.

134 The first relates to the behaviour of the Respondent at the conference between him, the Solicitor and the Client on 28 May 2008. At this point, the Settlement Offer had been accepted in principle by Mr Harrod, but negotiations about details were still in train. It would still have been open to the Client to seek to vary the terms of the settlement on the ground that it had adverse stamp duty implications to which he had not previously given consideration. Furthermore, this question of stamp duty had been expressly put on the agenda by Mr Harrod's stipulation that the Client must indemnify him against any duty payable by him on the Property Transfer or the Share Transfers.

135 The Respondent failed, at this important juncture, to give close and careful consideration to section 30. Although the mode of assessment of duty that this relatively brief section sets out in subsection (3) is not expressed very clearly, the section as a whole does not convey the impression, even on a casual reading, that a transferee can easily make out a claim to be liable only for the nominal duty of $10 mentioned in subsection (4). It would not have been unduly difficult for the Respondent to deduce that the Property Transfer was highly unlikely to have been assessed for nominal duty only under section 30.

12 In our first decision at [137], we rejected a submission by Ms Williams that the Respondent's conduct alleged in Ground 2 of the First Application should be characterised as professional misconduct under section 497(1)(a) of the LP Act because it involved 'a substantial or consistent failure to reach or maintain a reasonable standard of competence and diligence'. We took the view that the Respondent's failure in this regard related to one matter only and stemmed from only one erroneous opinion that he formed, and was therefore neither 'substantial' nor 'consistent'.

13 The Second Application. This Application contained two Parts. In each Part, the conduct alleged against the Respondent was failure, without reasonable excuse, to comply with a Notice served on him by the Bar Association pursuant to section 660 of the LP Act, requiring him to provide specified information and produce specified documents.

14 Section 676 of this Act states in subsection (3) that 'an Australian lawyer who is subject to... a requirement under section 660 (Requirements in relation to complaint investigations)... must not, without reasonable excuse, fail to comply with the requirement'. Subsection (4) states: 'An Australian lawyer who contravenes subsection... (3) is guilty of professional misconduct.'

15 The First Notice (to which Part A referred) was served on 5 February 2009 and required compliance no later than 20 February 2009. These dates fell within the period when the Respondent held a barrister's practising certificate. The Second Notice (to which Part B referred) was served on 10 May 2010 and required compliance by him within 14 days after this date. These dates are later than the date when his practising certificate was cancelled. He was still, however, an 'Australian lawyer' within the definition of this term in section 5 of the LP Act.

16 In our first decision at [166], we held that the only matter alleged at any time by the Respondent that might constitute a 'reasonable excuse' for his non-compliance was that he did not possess any of the documents (relating to his handling of the Client's affairs) that the Second Notice required him to produce. We observed, however, that he did not put forward this excuse until October 2010, some four months after the time for compliance had expired and that it did not, in any event, constitute an excuse for failing to provide the information required under this Notice.

17 At [167], we expressed the opinion that the Respondent had had ample opportunity to explain his reasons for non-compliance. We added that it had not been sufficient for him, in the course of correspondence with the Bar Association, to refer in general terms to medical conditions affecting him without articulating how they adversely affected his ability to comply or providing medical certificates or doctors' reports to substantiate his claims.

18 We accordingly held, at [168 - 169], that the Respondent's failures to comply with the two Notices specified in the Second Application amounted in each instance to professional misconduct under section 676(4) of the LP Act.

The course of proceedings since our first decision

19 In our first decision, delivered on 14 December 2011, we stated at [171] that a further hearing was required for the purpose of determining what order or orders should be made under section 562 of the LP Act 2004 and the Bar Association's application for costs should be determined. We set the case down for further directions on 22 December 2011.

20 In an affidavit sworn on 13 March 2012 and filed on that day, Ms Rosemary McDougal, who is the solicitor for the Bar Association in these proceedings, testified that on 19 December 2011 she sent an email message to the Respondent at an address previously used by her in communicating with him. She forwarded a copy of our first decision and confirmed the date and time of the directions hearing. She sought and obtained a 'delivery receipt' for this message, but did not receive a reply.

21 The Respondent did not appear at the directions hearing on 22 December 2011. The directions given were to the following effect: (a) on or before 16 March 2012, the Bar Association was to file and serve its submissions relating to the consequential orders to be made by the Tribunal; (b) on or before 13 April 2012, the Respondent was to file and serve his evidence and/or submissions relating to this matter; (c) the matter was to be determined 'on the papers', with leave granted to either party to apply for a hearing; and (d) the Tribunal might itself decide that the matter should be listed for a hearing.

22 Ms McDougal stated in her affidavit of 13 March 2012 that on 22 December 2011, following the directions hearing, she sent a further email message to the Respondent advising him of the content of these directions. Once again, she sought and obtained a 'delivery receipt', but did not receive a reply.

23 In the same affidavit, Ms McDougal testified also that on 17 January 2012 she sent an email message to the Respondent relating to a decision of the Tribunal handed down on 20 June 2011 and involving the same parties as the present case. In this decision (Bar Association of NSW v Miller (No 2) [2011] NSWADT 148), the Tribunal, having previously made a disciplinary finding against him, ordered, inter alia, that he should pay both a fine of $10,000 and the Association's costs. In her message, Ms McDougal made demands on him for these payments to be made, indicating that the Association's party/party costs in the proceedings amounted to $59,592.64. Once again, she sought and obtained a 'delivery receipt', but did not receive a reply.

24 On 13 March 2012, the Bar Association filed its submissions relating to consequential orders. They were prepared by its counsel, Ms Williams. Attached to them was a copy of an extract from the National Personal Insolvency Index indicating that the Respondent had been made bankrupt on 19 December 2008 (this was noted in our first decision at [69]) and that on account of objections by his trustee in bankruptcy he was not due to be discharged until 11 March 2017.

25 In a further affidavit sworn on 24 April 2012 and filed two days later, Ms McDougal testified that on 13 March 2012 she sent an email message to the Respondent, in which she intended to forward to him by way of service a copy of the Association's submissions and a copy of her affidavit of 13 March 2012.

26 Later on the same day, however, the Respondent sent her an email message pointing out that no documents had been attached to her message. She then sent a reply, attaching the submissions and the affidavit (with annexures in each case) and pointing out that he was required to file and serve his evidence and/or submissions on or before 13 April 2012. A short time later, she sent a further message, asking him to confirm that he had received these two documents. He replied soon after, stating simply 'Confirmed...'

27 The Respondent has not filed any evidence or submissions in accordance with the directions given on 22 December 2011.

28 In view of the testimony contained in Ms McDougal's two affidavits, we are satisfied that the Respondent has received adequate notice of the procedure laid down in those directions for determining the questions of consequential orders and costs. He has also been supplied with copies of the further evidence and the submissions filed by the Bar Association.

29 In addition, we find that the Respondent has had an adequate opportunity to file material responding to the Bar Association's evidence and submissions and/or to apply for the matters remaining in this case to be dealt with at a further hearing. Accordingly, even though he has not availed himself of this opportunity, it is appropriate for us now to determine these matters.

30 We are satisfied also that a hearing is not required and that we may make our determination 'on the papers', pursuant to section 76 of the Administrative Decisions Tribunal Act 1997.

Consequential orders

31 Apart from a costs order, the only order that Ms Williams sought in her submissions on behalf of the Bar Association is an order under section 562(2)(a) of the LP Act that the name of the Respondent be removed from the local Roll.

32 She formulated the test to be applied as follows: as at the time when the question of penalty falls to be determined, the Respondent must be shown not to be a fit and proper person to be a legal practitioner of the Supreme Court on whose roll his name presently appears. The authorities on which she relied included the judgment of the High Court in A Solicitor v Council of the Law Society of New South Wales (2004) 216 CLR 253; [2004] HCA 1 at [14 - 15] and [21].

33 She maintained that the Respondent's conduct described in Ground 1 of the First Application - i.e., seeking and accepting from the Client, then failing to repay, the unsecured Loan of $150,000 - was enough itself to warrant removal of his name from the Roll. In so arguing, she referred to a number of the features of this conduct that we outlined in the passages from our first decision that are reproduced above at [7].

34 She then quoted the whole of paragraph [106] of our first decision, in which we found that at the time of the Respondent's behaviour in relation to the Loan he was not a 'fit and proper person to engage in legal practice'. Her ensuing submission was that we should now make the further finding that he was 'permanently unfit to practise and should not remain a member of the legal profession'. In this context, she relied on the fact that in two decisions on which we placed emphasis in concluding that this behaviour was professional misconduct - Law Society of New South Wales v Harvey [1976] 2 NSWLR 154 and Law Society of New South Wales v Moulton [1981] 2 NSWLR 736 - the respondent solicitor was struck off.

35 Ms Williams submitted finally with regard to Ground 1 of the First Application that because the Respondent had not tendered evidence or made submissions with a view to showing that he was now a fit and proper person to engage in legal practice despite his earlier conduct, 'the Tribunal could not be satisfied that "his past proved unfitness has changed to fitness"'. The quoted phrase appears in the judgment of Moffitt P in Johns v Law Society of New South Wales [1982] 2 NSWLR 1 at 9-10 and, as Ms Williams pointed out, was repeated by the Tribunal in Council of the Law Society of New South Wales v Rook [2011] NSWADT 191 at [24].

36 In our opinion, these contentions by Ms Williams are well founded, subject to one observation. Her formulation of the test to be applied - whether the Tribunal could be 'satisfied that the Respondent's "past proved unfitness has changed to fitness"' - may suggest that the Respondent bore the onus of establishing this. But at most, he was subject to an evidentiary onus, which he failed to discharge because he did not tender any evidence at all on the issue. If we are to order removal of his name from the Roll, the finding that we must make is that on the balance of probabilities his 'past proved unfitness' has not 'changed to fitness'. In reaching our conclusion on this question, we must have due regard to his decision not to tender evidence, to the evidence adduced by the Bar Association and to the principles stemming from Briginshaw v Briginshaw (1938) 60 CLR 336.

37 We are satisfied on these matters. The Respondent's conduct in relation to the Loan, embracing specific acts over a period of more than two years, was 'disgraceful' and 'dishonourable' to a degree that left us in no doubt that it amounted to professional misconduct, both at common law and under a statutory criterion raising the question whether he was 'fit and proper' to engage in legal practice. Because he tendered no evidence and made no submissions that might show him no longer to be unfit for practice, we find now that, by virtue only of the matters stated in Ground 1 of the First Application, the 'probability' now (to quote from the judgment of Young CJ in Eq in Prothonotary of the Supreme Court of New South Wales v P [2003] NSWCA 320 at [17(2)]) is that he is 'permanently unfit to practise'. It follows that his name must be removed from the Roll.

38 Ms Williams submitted in addition that the Respondent's professional misconduct in failing, without reasonable excuse, to comply with two separate Notices served on him under section 660 of the LP Act provided 'further justification' for an order in these terms. She pointed out that in earlier Tribunal proceedings (see Bar Association of NSW v Miller [2010] NSWADT 300 and Bar Association of NSW v Miller (No 2) [2011] NSWADT 148) he had been found guilty of professional misconduct on the ground of failing to comply with a Notice under section 660 and had been reprimanded, fined the sum of $10,000 and ordered to pay the Bar Association's costs. As indicated above at [23], this fine and order for costs remain unpaid.

39 In support of this submission, Ms Williams cited a number of Tribunal decisions - for example, Council of the Law Society of NSW v Treanor [2009] NSWADT 115 - establishing that multiple failures to comply with a Notice under section 660 (or its predecessor, section 152 of the Legal Profession Act 1987) constitute very serious breaches of a lawyer's professional obligations and may warrant an order suspending a barrister's or solicitor's practising certificate until compliance occurs.

40 We agree with Ms Williams that the Respondent's professional misconduct in failing to comply with the two Notices under section 660 provides further justification for an order removing his name from the Roll. We do not have to determine whether this misconduct, considered in isolation, would warrant such an order.

41 Our finding that the Respondent engaged in unsatisfactory professional conduct as alleged in Ground 2 of the First Application would, to a lesser degree, provide confirmation that this order must be made.

42 A further submission by Ms Williams was that the conduct of the Respondent described in the two Disciplinary Applications, 'considered as a whole', warrants an order removing his name from the Roll. We agree with this, since we have held that his professional misconduct in relation to the Loan was sufficient in itself to provide the basis for such an order.

Costs

43 Under section 566(1) of the LP Act, the Tribunal is required to order that a respondent in disciplinary proceedings who has been found guilty of professional misconduct must pay the costs of the applicant unless 'exceptional circumstances' exist.

44 We agree with a submission by Ms Williams that neither the Respondent's bankruptcy nor the deferral of his discharge on account of objections by his trustee (see [24] above) constitutes 'exceptional circumstances' within this provision. As she submitted, an order for costs should be made and the Bar Association should be free to take such steps as it may be advised to recover its costs.

Our orders

45 For the foregoing reasons, our orders are as follows:-

1. The name of the Respondent is to be removed from the local Roll.

2. The Respondent is to pay the Applicant's costs of and incidental to these proceedings.

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Decision last updated: 04 July 2012