Civil and Administrative Tribunal New South Wales

• Medium Neutral Citation: Council of the Law Society of NSW v Webber [2014] NSWCATOD 105
• Hearing dates: 25/07/2014
• Decision date: 24 September 2014
• Jurisdiction: Occupational Division
• Before: M Riordan, Senior Member; D Fairlie, Senior Member; E Hayes, General Member

Decision

1. The Solicitor is guilty of unsatisfactory professional conduct.

2. The Solicitor is reprimanded.

3. The Solicitor is to pay the Law Society's costs, as agreed or assessed.

• Catchwords: Disciplinary application - solicitor - unsatisfactory professional conduct - breach of Section 275 of the Legal Profession Act (NSW) 2004
• Legislation Cited: Legal Profession Act (NSW) 2004
• Cases Cited: Legal Services Commissioner v Canals [2008] VCAT 576; Xu v Council of the Law Society of NSW [2009] NSWCA 430
• Category: Principal judgment
• Parties: The Council of the Law Society of NSW (Applicant); Helen Christina Webber (Respondent)
• Representation: Counsel; P Coleman SC (Respondent); C Groenewegen (Applicant)
• File Number(s): 14200129

reasons for decision

Introduction

1 On 12 March 2014, the Council of the Law Society of New South Wales ('the Law Society') filed in the Administrative Decisions Tribunal an Application claiming that the Respondent, Helen Christina Webber ('the Solicitor') was guilty of unsatisfactory professional misconduct.

2 The orders sought in the Application were as follows:-

(1) The Solicitor be reprimanded

(2) The Solicitor be fined

(3) The Solicitor pay the costs of the Law Society; and

(4) Any other orders as the Tribunal deems appropriate.

3 The Application alleged a single ground, namely that the Solicitor is guilty of professional misconduct because she breached Section 275 of the Legal Profession Act 2004 NSW.

The Particulars

4 The Application particularised the Ground as follows:

LEGAL PROFESSION ACT 2004 - SECT 275

Final examination of trust records

(1) This section applies if a law practice:

(a) ceases to be authorized to receive trust money, or

(b) ceases to engage in legal practice in this jurisdiction.

(2) The law practice must appoint an external examiner to examine the practice's trust records:

(a) in respect of the period since an external examination was last conducted, and

(b) in respect of each period thereafter, comprising a completed period of 12 months or any remaining partly completed period, during which the practice continued to hold trust money.

Maximum penalty: 50 penalty units.

(3) The law practice must lodge with the Law Society:

(a) a report of each examination under subsection (2) within 60 days after the end of the period to which the examination relates, and

(b) a statutory declaration in the prescribed form within 60 days of ceasing to hold trust money.

Maximum penalty: 20 penalty units.

(4) The law practice must ensure that, within 12 months after the law practice ceases to be authorized to receive trust money or ceases to engage in legal practice in this jurisdiction:

(a) any general trust account maintained by the law practice in this jurisdiction is closed, and

(b) trust money held in any such account is dealt with as required by this Act and the regulations (such as by being disbursed in accordance with a direction given by the person on whose behalf it was received).

(5) If an Australian legal practitioner dies, the practitioner's legal personal representative must comply with this section as if the representative were the practitioner.

(6) Nothing in this section affects any other requirements under this Part.

1. Helen Christina Webber ['the Solicitor]:

a. was born on 16 October 1957 and is currently 56 years of age;

b. was admitted to the roll of the Supreme Court of NSW on 10 June 1983; and

c. from 17 June 1991 to 1 January 2011, was the principal of the law practice known as Helen Webber Solicitors situated at Suite A, Lvl 2, 217 Clarence Street SYDNEY NSW 2000 ['the Law Practice'].

2. The Law Practice operated a trust account 858 062-105 Account No 1006-9572.

3. On or about 5 August 2010 the Solicitor commenced employment with Legal Aid NSW.

4. From the time she commenced employment at Legal Aid NSW until about October 2010 the Solicitor completed conveyances, contacted previous clients and transferred current files of the Law Practice to other solicitors.

5. After 31 December 2010 the Law Practice no longer traded.

6. On 1 January 2011 the Solicitor, as an employee of Legal Aid NSW, held an Unrestricted Government practising certificate.

7. In breach of s 275 of the Act, the Solicitor failed to finalize the trust records and close the trust account by close of business on 31 December 2011.

8. Throughout March, April, June and July of 2012 Mr John Michalski, Trust Account Investigator for the Law Society of NSW contacted the Solicitor by telephone and email with a view to ascertaining the progress of her task of finalising the trust records and closing the trust account of the Law Practice.

9. On 7 August 2012 Mr Michalski issued the Solicitor with a Notice pursuant to s 659 of the Act requiring production of trust records from 1 April 2011 to the date of the Notice.

10. On 21 August 2012 the Solicitor produced the records as requested.

11. By covering letter of the same date the Solicitor stated:

'I wish to finalize my Trust Account so that I bring my practice to an end. I have not done so to date because I do not know what to do about various ledgers and I do not want to do the wrong thing. I would prefer to work with

you to do what is necessary to close the Trust Account and I can assure you of my co-operation if you can assist me with direction on how to proceed.'

12. As at 26 August 2012 the Law Practice held $26,986.58 in trust for 64 trust ledger accounts, comprising $10,986.58 in the trust bank account and $16,000.00 in statutory deposit.

13. On 20 September 2012 the applicant appointed Mr John Ernest Mitchell as Supervisor of the Law Practice.

14. In order to assist the Solicitor with her task of finalising the trust records and closing the trust account of the Law Practice, the Supervisor or his assistant, Mr Terry Copes, Administration Manager External Interventions, for the Law Society:

a. Contacted the Solicitor by telephone at various times and by emails on 25 September 2012, 8 October 2012, 10 December 2012, 4 March 2013, 18 July 2013 and 30 August 2013;

b. Arranged to meet with the Solicitor on or before 30 November 2012;

c. Made themselves available at various times to be selected and nominated by the Solicitor;

d. Agreed to and did in October 2012 put in place a plan for the Solicitor to achieve finalization of the trust records and closure of the trust account.

15. The Solicitor failed to:

a. Meet any of the time frames agreed by her;

b. Select and nominate alternate meeting times offered by the Supervisor or his assistant;

c. Assist the Supervisor by identifying the beneficial owner of the funds held in the trust account;

d. Implement the plan devised by the Supervisor for the purpose of finalising the trust records and closing the trust account;

e. Respond to the emails of 10 December 2012 and 4 March 2013.

16. With no progress made in finalising the trust records the appointment of the Supervisor lapsed in 20 September 2013.

17. On 12 December 2013 the Council appointed Mr Richard Savage as Supervisor of the Law Practice.

5 On 12 March 2014, the Law Society filed an affidavit sworn on 7 March 2014 by its solicitor in these proceedings, Anne-Marie Foord. Annexed to it was a quantity of documentary material. It also filed an affidavit sworn by Mr John Ernest Mitchell, Chief Trust Account Investigator and Supervisor employed by the Law Society, on 4 March 2014. Annexed to it was a quantity of documentary material.

6 On 14 April 2014, the Solicitor filed a Reply. In it, she admitted all "Grounds" of the Application with the exception of Grounds 6 and 15(e), which she stated that she was unable to admit or deny. However, we note that the Application raised a single Ground and that the references to "Grounds" in the Reply are actually references to the Particulars set out in the Application.

7 In reply to paragraph 6 of the Particulars, the Solicitor stated that she neither admitted nor denied this, but that she understood that she held an unrestricted practising certificate for the period from 1 July 2010 until 30 June 2011 and she did not obtain an Unrestricted Government practising certificate until 1 July 2011. In reply to paragraph 15(e), she stated that that she could not admit or deny this "(as email records not currently available.)"

8 On 16 June 2014 the Solicitor filed an affidavit that she swore on 18 June 2014.

9 The hearing took place before us on 25 July 2014. Ms Groenewegen appeared for the Law Society and Mr Coleman of counsel for the Solicitor. The filed evidence was admitted without objection and no witnesses were required for cross-examination. At the completion of submissions from Ms Groenewegen and Mr Coleman we reserved our decision.

10 As all paragraphs of the particulars with the exception of paragraphs 6 and 15(e) are admitted by the Solicitor, we will firstly consider the evidence relating to those paragraphs.

The Evidence

11 We note that paragraph 6 of the particulars alleged that on 1 January 2011, the Solicitor, as an employee of Legal Aid NSW, held an Unrestricted Government practising certificate.

12 However, the evidence before us indicates that she applied for that certificate on 13 May 2011 (see: page 50 of Ms Foord's affidavit), and she previously applied for an unrestricted principal's certificate in March 2010. Therefore, we are satisfied with paragraph 6 of the particulars has not been established.

13 Paragraph 15(e) of the Application alleged that the Solicitor failed respond to emails that were sent to her by Mr J Mitchell on 10 December 2012 and 4 March 2013.

14 Copies of these emails are annexed to Mr Mitchell's affidavit and that there is no record of any response from the Solicitor. We are therefore satisfied that paragraph 15(e) of the Application has been established.

15 Otherwise, we are satisfied that the evidence before us establishes the matters set out in the remaining paragraphs of the particulars.

The Law Society's Submissions

16 On behalf of the Law Society, Ms Groenewegen submitted that based on the evidence regarding the date when the Law Practice closed, the Trust Account should have been closed by 31 December 2011. However, she noted that the Solicitor had provided conflicting evidence to the Law Society as to when the Law Practice closed. For example:

(1) In her email to Mr Mitchell dated 30 June 2011, she stated that she had not operated her practice since 30 September 2010;

(2) in her email dated 19/08/2011, she stated that she had not operated her practice since 1 July 2011 and that she wished to officially close her practice and requested assistance from the Law Society in order to do so;

(3) On 7 August 2012, she informed Mr Michalski that she did not close her practice until November 2011; and

(4) In her letter to the Law Society dated 30/10/2013, she stated that she did not close her practice until she became a permanent employee of the Legal Aid Commission, which meant that the practice remained open until 31/12/2010.

17 Ms Groenewegen stated that if the law practice closed in September 2010, the trust account should have been closed by September 2011; However, if it closed on 1 July 2011, then the trust account should have been closed by 1 July 2012; However, if it did not close until November 2011, it should have been closed by November 2012; and if it did not close until 31/12/2010, it should have been closed by 31/12/2011.

18 Ms Groenewegen stated that Mr Mitchell formed the opinion that the Law Practice ceased operating on 31 December 2010 and that the Trust Account should have been closed by 31/12/2011 and she noted that he documented the attempts that he made to have the Solicitor apply herself to the finalisation of the account. She referred to the Notice under Section 659 of the 2004 Act that was issued to the Solicitor by Mr Michalski on 7 August 2012, which was more than 2 years later, which required her to produce certain documents.

19 The earliest evidence of the Solicitor making any effort to deal with the matter was her letter dated 21 August 2012 in response to the Section 659 Notice. She indicated that she had some issues in winding up some of the matters and asked whether the Law Society was prepared to provide her with assistance. As a result, the Law Society appointed Mr Mitchell as the Supervisor of the Law Practice for the period from 20 September 2012 until 20 September 2013.

20 On 8 October 2013, Mr Mitchell sent the Solicitor an email to which he annexed a 6-page plan of action in regard to each of the ledgers (for which the Solicitor requested assistance) and he requested that she issue the requested letters prior to 15 November 2012 so that these could be considered at their meeting that was scheduled on/before 30/11/2012.

21 However, the Solicitor failed to arrange a meeting with Mr Mitchell on/before 30/11/2012 and she failed to respond to all attempts made by Mr Mitchell to have her deal with the matters. On 20/11/2013, Mr Mitchell issued a report, in which he stated (relevantly):

28. The role of Supervisor of a law practice is reliant on the co-operation of the legal practitioner in providing access to the records and explanation as to the beneficial owner of the funds held in the trust account. This co-operation has not been provided by Helen Webber. This is the first Supervision that I have been unable to fulfil my role of closing the trust account.

29. Unfortunately there are no penalty provisions associated with Section 620 of the Legal Profession Act and I did not consider that I should forcibly enter the private residence of Helen Webber to obtain access to the relevant files in an attempt to obtain the addresses of the persons on whose behalf the money is held. Helen Webber never refused access she simply never kept any appointments.

30. I understand there are rules for legal practitioners to be courteous to fellow practitioners unfortunately the rules do not apply to an officer of the Law Society appointed by the Law Society Council who was appointed to assist the practitioner with the closure of the trust account. In 12 months Helen Webber has not kept one appointment as arranged. As was explained to her the closure of the trust account would have been completed in about 2 hours had she attended on me or Terry Copas at any one of the arranged appointments.

Conclusion

31. I do not propose to spend any further time on the supervision of the trust account of Helen Webber Solicitors. I have been unable to complete the function for which I was appointed and do not wish to seek an extension of that appointment.

32. The matter is referred for appropriate action by the Law Society Council.

22 Ms Groenewegen noted that in June 2013, the Solicitor was diagnosed with Melanoma and required surgery for this condition in August 2013. However, the trust account should have been closed well before then and she submitted that the Solicitor responded abysmally to the matters that required her attention. While she noted that the Solicitor had sought to excuse her conduct by citing a huge workload in her role for the Legal Aid Commission and the time that she was required to spend, and the emotional toll upon her caused her parents' illnesses and her own illness, she submitted that these matters did not excuse the Solicitor from her breach of her obligations under the Act.

23 Ms Groenewegen referred to a decision of the Victorian Civil & Administrative Tribunal in Legal Services Commissioner v Canals [2008] VCAT 576 (decision dated 1 April 2008), in which it was stated (in the context of a disciplinary matter):

6. It is important to note that whilst one as a member of the legal profession must devote time to the needs of clients as a matter of duty there is also a duty to attend to the requirements of the regulatory regime under which the legal practitioners practice and it is not sufficient to say that one is too busy to deal with such matters. This forms part of the work of a practice.

24 Ms Groenewegen referred to the following provisions of the Act:

(1) Section 496 of the Act , which 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.

(2) Section 490 of the Act, which provides:

Conduct capable of being unsatisfactory professional conduct or professional misconduct

(1) Without limiting section 496 or 497, the following conduct is capable of being unsatisfactory professional conduct or professional misconduct:

(a) conduct consisting of a contravention of this Act, the regulations or the legal profession rules,

(b) charging of excessive legal costs in connection with the practice of law,

(c) conduct in respect of which there is a conviction for:

(i) a serious offence, or

(ii) a tax offence, or

(iii) an offence involving dishonesty,

(d) conduct of an Australian legal practitioner as or in becoming an insolvent under administration,

(e) conduct of an Australian legal practitioner in becoming disqualified from managing or being involved in the management of any corporation under the Corporations Act 2001 of the Commonwealth,

(f) conduct consisting of a failure to comply with the requirements of a notice under this Act or the regulations (other than an information notice),

(g) conduct of an Australian legal practitioner in failing to comply with an order of the Disciplinary Tribunal made under this Act or an order of a corresponding disciplinary body made under a corresponding law (including but not limited to a failure to pay wholly or partly a fine imposed under this Act or a corresponding law),

(h) conduct of an Australian legal practitioner in failing to comply with a compensation order made under this Act or a corresponding law.

(2) Conduct of a person consisting of a contravention referred to in subsection (1) (a) is capable of being unsatisfactory professional conduct or professional misconduct whether or not the person is convicted of an offence in relation to the contravention.

25 Ms Groenewegen submitted that the Solicitor had breached Section 275 of the Act and that her conduct fell short of the standard of diligence and competence diligence that a member of the public is entitled to expect of a reasonably competent Australian legal practitioner. Therefore, the complaint of unsatisfactory professional conduct was established.

26 In relation to the issue of the orders to be made, Ms Groenewegen submitted that:

(1) In view of the Tribunal's protective function and its educative role, the issue of a Reprimand to the Solicitor is appropriate in the circumstances of this matter;

(2) In addition, a fine is also appropriate, not as a punitive measure against the Solicitor but in order to educate the profession that such conduct is not acceptable. However, she stated that there is no record of any previous complaint being made against the Solicitor.

The Solicitor's Submissions

27 On behalf of the Solicitor, Mr Coleman stated that the Solicitor admits breaching Section 275(4) of the Act, but he submitted that she is guilty only of errors of judgment and not of conduct that is either deceptive or dishonourable.

28 In relation to the orders to be made, Mr Coleman argued that the Solicitor's conduct fell at the lower end of the spectrum and that after finding that he is guilty of unacceptable professional conduct, the Tribunal should order her to pay the Law Society's costs, but should properly exercise its discretion and decline to issue a reprimand. He submitted that there were 14 reasons why a reprimand should not be made in this matter, namely:

(1) Her previous clear record during her 31 years of legal practice;

(2) There is no evidence that she is not of good fame and character;

(3) She has not denied any fact or circumstance relied upon by the Law Society, either in the course of correspondence or after the complaint was made. To the extent that she initially disputed that those facts and circumstances could constitute a breach of Section 275 of the Act, she promptly conceded that she had been wrong in that belief;

(4) She consistently demonstrated contrition as evidenced in her affidavit evidence and correspondence with officers of the Law Society;

29 While she sought to explain the circumstances that led or contributed to the breach of Section 275 of the Act, she had not sought to excuse her failure to comply with it;

(1) Her explanation for her failure to comply with her statutory obligations is credible;

(2) She has complied with the obligations imposed upon her by Section 275 of the Act;

(3) Her failure to comply with Section 275 of the Act did not involve dishonesty or financial or other detriments to clients. On the contrary, it may have involved financial detriment to her;

(4) Her conduct did not, and could not have brought the legal profession into disrepute;

(5) The evidence before the Tribunal indicates that she was confronted with serious health issues with respect to her aged parents during the period in which she failed to meet her obligations under Section 275 of the Act;

(6) The evidence before the Tribunal also indicates that she was confronted with her own serious health issues during this period;

(7) The Solicitor elected to relinquish private practice in order to serve citizens less able to afford private legal advice and representation by working as a Legal Aid Solicitor;

(8) There is no likelihood of the Solicitor again failing to comply with her obligations under the Act and no specific deterrent is relevant to the sanctions appropriate to be imposed on the Solicitor; and

(9) The Solicitor's evidence reveals that a finding of unsatisfactory professional conduct is of itself a significant punishment.

30 Mr Coleman submitted that the decision of Handley JA in Xu v Council of the Law Society of NSW [2009] NSWCA 430 (decision dated 23 December 2009) is authority for the proposition that a reprimand is not warranted in all of the circumstances.

Discussion and conclusions

31 The facts that we have recited previously in this decision, and which we have found to have occurred, support a finding that the Solicitor breached Section 275 of the Act and that she is therefore guilty of unsatisfactory professional conduct as defined by Section 496 of the Act.

32 In determining the appropriate orders that should follow our finding, we have considered the submissions made on behalf of both parties and noted that our functions are primarily educative and protective and not punitive in nature.

33 While we appreciate the difficult personal matters that confronted the Solicitor during the period in which she was in breach of her obligations under Section 275 of the Act, we nevertheless note the evidence of Mr Mitchell, which was not disputed by the Solicitor, namely that the trust account could have been finalised within a period of about 2 hours if she had kept any of her appointments with him. We also take note of the significant delay in complying with her obligations under Section 275 of the Act. On that basis, we have determined that it is appropriate that the Solicitor should be reprimanded.

34 However, we are not satisfied that the circumstances of this matter also require the imposition of a fine and we decline to make that order.

Finding and orders

(1) The Solicitor is guilty of unsatisfactory professional conduct.

(2) The Solicitor is reprimanded.

(3) The Solicitor is to pay the Law Society's costs, as agreed or assessed.

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I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.
Registrar

Decision last updated: 24 September 2014