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NSW Crest

Administrative Decisions Tribunal
New South Wales

Medium Neutral Citation:
Donaghy v Council of the Law Society of NSW (No 2) [2012] NSWADT 170
Hearing dates:
18 June 2012
Decision date:
17 August 2012
Jurisdiction:
Legal Services Division
Before:
D Fairlie, Judicial Member;
S Hale, Judicial Member;
E Hayes, Non-Judicial Member.
Decision:

Application for Review dismissed

Geoffrey James Donaghy be reprimanded

Catchwords:
Failure to pay counsel's fees
Failure to communicate
Legislation Cited:
Administrative Decisions Tribunal Act 1997
Legal Profession Act 2004
Revised Professional Conduct and Practice Rules
Cases Cited:
Donaghy v The Council of the Law Society of New South Wales (No1) [2012] (unreported)
Law Society of New South Wales v Graham [2007] NSWADT 67
Law Society of New South Wales v McCarthy [2003] NSWADT 198
Law Society of New South Wales v Davidson [2007] NSWADT 264
Carver v Legal Disciplinary Tribunal [1991] NSWCA 47
Council of the Law Society of New South Wales v Beazley [2012] 153
Ilvary Pty Limited v Moss & Ors [2009] NSWCA 207
Category:
Principal judgment
Parties:
Geoffrey James Donaghy (Applicant)
The Council of the Law Society of NSW (Respondent)
File Number(s):
112029

REasons for decision

Introduction

1The Applicant, Mr Donaghy is a sole practitioner from Lismore. He seeks a review of the decision made by the Respondent, the Council of the Law Society of New South Wales, ("the Law Society") on 1 September 2011, to publicly reprimand him.

2The decision was made by the Respondent's Professional Conduct Committee, as the delegate of the Law Society's Council, and was in the following terms:

RESOLVED that:
1. the Committee is satisfied that :
(i) there is a reasonable likelihood Geoffrey James Donaghy ("the legal practitioner") would be found by the Tribunal to have engaged in unsatisfactory professional conduct; and
(ii) the legal practitioner is generally competent and diligent: and
(iii) the taking of action is justified having regard to all the circumstances of the case ( including the seriousness of the conduct concerned) and to whether any other substantiated complaints have been made against the legal practitioner.
2. the committee hereby reprimands the legal practitioner. (Section 540(1) and (2)(b) of the Legal Profession Act, 2004).
Unsatisfactory Professional Conduct
Failure to pay third party.
Failure to communicate.
Reasons for Decision
Failure to pay third party.
Failure to communicate.
Ms Graycar issued a fee disclosure and costs agreement on 24 June 2009 to Mr Donaghy. The agreement records that Ms Graycar received instructions on 23 June 2009 for a hearing in the Court of Appeal on 15 July 2009. On 17 July 2009 Ms Graycar issued her fee note to Mr Donaghy in the sum of $11,687.50. Ms Graycar's fees were not paid until on or about 24 June 2011 following an Application for Assessment being made by the complainant as a result of which her fees were allowed in full and a subsequent Application for Review was lodged by the solicitor and withdrawn by him when the parties reached a negotiated settlement and the complainant accepted payment of a negotiated settlement and the complainant accepted payment of an agreed sum.
Mr Donaghy failed to communicate with Ms Graycar concerning her fee, which fell within her estimate. He is not entitled to rely on his Associate's discussions with Ms Graycar's clerk, Ms Wyles, concerning which Ms Wyles said that there was never any suggestion that there was any problem with payment. Having regard to the material before it, Rule 32 of the Revised Professional Conduct and Practice Rules and the decision of the Administrative Decisions Tribunal in matters such as Law Society of New South Wales v Graham 2007 NSWADT 67 the Committee is satisfied that there is a reasonable likelihood that the solicitor will be found by the Tribunal to have engaged in unsatisfactory professional conduct and professional misconduct."
Notice of the decision was sent to Mr Donaghy, by letter dated 2 September 2011.

Relevant Legislative Provisions

3The circumstances in which the Law Society ( or the Legal Services Commissioner), can proceed summarily against a solicitor in relation to a complaint, rather than referring the solicitor to this Tribunal, are contained in section 540 of the Legal Profession Act 2004 ("the LP Act").

4S 540(1) (b) of the LP Act, requires the Law Society to be satisfied about three matters. First, it must be satisfied that there is a reasonable likelihood that the practitioner would be found by this Tribunal to have engaged in unsatisfactory professional conduct, (but not professional misconduct). Secondly, it must be satisfied that the practitioner is generally competent and diligent, and finally, that taking action under this section is justified, having regard to all the circumstances of the case, and whether any other substantiated complaints have been made against the practitioner.

5After it has satisfied itself about these matters, the Law Society can discipline the practitioner, and, relevantly for this application, under s540(2)(b) of the LP Act, it can reprimand the practitioner. S 540(5) of the LP Act entitles the practitioner to apply to this Tribunal for a review of the decision.

6S 63 of the Administrative Decisions Tribunal Act 1997 ("the ADT Act") sets out the procedure by which the Tribunal is to deal with such an application. The procedure is not in the nature of an appeal. It has to decide what the correct and preferable decision is, having regard to the material before it, including relevant factual material and the relevant law. The tribunal may decide to affirm, vary, set aside or set aside and remit the original decision.

Mr Donaghy's Application for Review

7 Mr Donaghy filed his application for review on 21 September 2011.The grounds were as follows:

1) The Respondent erred in finding that there was a likelihood that I would be found by the Tribunal to have engaged in unsatisfactory professional conduct;
2) The Respondent erred in finding that the conduct complained of amounted to unsatisfactory conduct;
3) The Respondent erred in relying upon the decision of the Law Society of NSW v Graham 2007 NSWADT 67;
4) The Respondent denied the Applicant procedural fairness by taking into account irrelevant considerations in reaching its determination such irrelevant consideration being the determination of Cost Assessor Lancken dated 9 May 2011;
5) The Respondent erred in its determination in failing to take account relevant considerations such relevant consideration being the Applicants preparedness to mediate the issue;
6) The Respondent erred in determining that reprimanding the Applicant was the appropriate penalty in the circumstances;

8Pursuant to its obligation under s 58(1) of the ADT Act, in November 2011, the Law Society lodged with the Tribunal a bundle of the documents which it believed to be relevant to the Tribunal's consideration of the matter. These documents consisted mainly of the correspondence between Mr Donaghy, the complainant, Ms Graycar, and the Law Society.

9Mr Donaghy then filed a summons seeking, amongst other documents, the submissions from employees in the Law Society's Professional Standards Department to its Professional Conduct Committee which led to the decision to reprimand him. The Law Society opposed the production of these documents, relying on the protection afforded to it under s 602(1) of the LP Act.

10On 1 March 2012, in Donaghy v The Council of the Law Society of New South Wales (No1),[2012] (unreported), Judicial Member Fairlie upheld the Law Society's claim that it not be compelled to produce the further documents sought in the summons.

11That decision also restated Mr Donaghy's entitlement to put before this Tribunal additional documents, or to call witnesses, notwithstanding that those documents, or the evidence of those witnesses had not been before the Law Society when it made its initial decision to reprimand him. Before this hearing commenced, Mr Donaghy informed the Tribunal that he did not propose to tender anything further, so that the hearing proceeded on the basis that the only material before us was that contained in the Law Society's original bundle. Mr Donaghy appeared in person.

Mr Donaghy's Submisions

12Mr Donaghy made a number of submissions, some of fact, some of law, in support of his Application for Review. A number of these appeared not to come directly within the six grounds for review contained in his Application set out above, but the Law Society did not object, and we proceeded to consider them all. We will deal with them in the order they arise in relation to the chronology of events, rather than the order they are found in the Application for Review.

13Mr Donaghy argued that he was not obliged to speak personally with Ms Graycar about her fee note. He also submitted that she should have first submitted her fee note to assessment, rather than making a demand for payment, as she did on 30 November 2009.

14These submissions respond to both elements of the Law Society's determination that Mr Donaghy would be likely to have engaged in unsatisfactory conduct, namely that he failed to pay Ms Graycar's fees, and that he failed to communicate with her, in the period between July and November 2009.

15It is first appropriate to set out the relevant factual background in this period in greater detail than is contained in the Reasons supporting the Law Society's finding against him, as above in paragraph 2.

16On 17 July 2009 Ms Graycar issued her fee note in relation to the Court of Appeal hearing on 15 July 2009.The amount claimed was $11,687.50. Her cost disclosure document dated 24 June 2009, had estimated fees between $8,800 and $13,200. On 24 September she issued a reminder invoice. On 30 November Ms Graycar wrote to Mr Donaghy stating that unless her fees were paid within 7 days, she would refer the matter to the Legal Services Commissioner.

17There was no direct communication between Mr Donaghy and Ms Graycar during this period. However Ms Graycar's clerk telephoned Mr Donaghy's office on approximately seven occasions, between 29 September and 24 November 2009, seeking payment of the account. On each occasion she spoke to Mr Donaghy's legal associate, Ms Hodgson.

18Ms Graycar's account of those conversations, as set out in her letter of 30 November 2009, is that her clerk asked Ms Hodgson to have Mr Donaghy contact her in relation to the account, and that "Ms Hodgson repeatedly assured my clerk that she had informed you of her calls and apprised you of the situation".

19Mr Donaghy's account, as set out in his letter to the Law Society dated 20 March 2010, and repeated in his submissions to us, is that he believed that Ms Graycar and the Senior Counsel who appeared with her in the Appeal, had "generally displayed an unprofessional approach to the entire matter", and relevantly "it had been conveyed to Ms Graycar (and the senior counsel) that I would not be paying their tax invoices and that in the circumstances I did not consider them to be fair and reasonable for the work performed".

20We note that Mr Donaghy asserts that "it was conveyed to", Ms Graycar, presumably by Ms Hodgson to her clerk, that there was an issue with her fee note, but the evidence, such as it is, does not support this.

21There is nothing in Ms Graycar's letter to Mr Donaghy of 30 November which suggests that she had any inkling that he was unhappy with her contribution to the appeal. She says that in her clerk's conversations with Ms Hodgson, Ms Hodgson did no more than pass on the fact that she had called to Mr Donaghy. There is no suggestion of any feedback from Mr Donaghy being passed on to her clerk by Ms Hodgson or otherwise.

22Ms Hodgson was not called by Mr Donaghy to give evidence before the Tribunal, and there is nothing else in the document bundle suggesting that Ms Hodgson did in fact did convey any of Mr Donaghy's concerns to Ms Graycar's clerk. In the circumstances we must conclude that Ms Graycar's account of the contact between them in the period July - November 2009, is to be preferred.

23As a matter of general principle, Mr Donaghy's first submission that dialogue between counsel and instructing solicitor in relation to fees, does not always need to be conducted personally, is no doubt correct. In other words, this matter could have been progressed by discussions between Ms Graycar's clerk and Mr Donaghy's associate. However, as Ms Hodgson appears not have been given any authority to deal with the substantive issue, and did no more than inform her principal, Mr Donaghy, that Ms Graycar's clerk had called, that is not an answer to the allegation that he failed to communicate with Ms Graycar.

24Mr Donaghy's second submission, that Ms Graycar should have initiated the assessment process, also does not provide an answer to the allegation that he failed to pay her fees.

25S 350 of the LP Act provides that either the party proving the service, or the recipient, in this case, counsel or instructing solicitor, may apply for an assessment. However, Ms Graycar was not aware that there was any issue in relation to her fees, so she had no reason to make the application. Mr Donaghy may well have been unhappy with Ms Graycar's fee note, but he failed to convey that to Ms Graycar. In those circumstances, the onus was on him to refer the matter to assessment, if he did not intend to pay the fee note immediately on receipt.

26We also do not accept Mr Donaghy's submission that Ms Graycar should not have written to Mr Donaghy demanding payment of her fees, and threatening to refer the matter to the Legal Services Commissioner, as she did on 30 November. In our view, that letter, which evidences her frustration at not having received a response from Mr Donaghy for nearly five months, was an appropriate step for her to take in the circumstances.

27Mr Donaghy's next submission, which was set out in paragraph 5 of his Application for Review, was that the Law Society failed to take into account as a relevant consideration, the fact that he was prepared to mediate the dispute. He argued that the matter could have been resolved by agreement, rather proceeding as a disciplinary matter. This requires a consideration of the relevant facts after the receipt of Ms Graycar's letter of 30 November 2009.

28That letter informed Mr Donaghy that unless her fees were paid within seven days, she would refer the matter to the Legal Services Commissioner. In other words Mr Donaghy still had the opportunity, albeit belatedly, to inform Ms Graycar of his concerns about what he believed was her "unprofessional approach" to the appeal and to suggest a mediation or other process to resolve the matter. But he did not respond to that letter, and on 14 December 2009, Ms Graycar wrote to the Office of the Legal Services Commissioner.

29On 18 December, the Office of the Legal Services Commissioner referred the matter to the Law Society "for an attempt at resolution". The letter said that the matter had been assessed "a matter that should be capable of resolution, and one which does not raise serious conduct issues"

30On 5 January 2010, Ms Tomlinson, from the Law Society's Professional Standards Department, wrote to Mr Donaghy seeking a response to Ms Graycar's complaint within fourteen days. The letter also stated that the Law Society was happy to assist Mr Donaghy in a resolution process, and suggested an informal meeting with him and Ms Graycar in Ms Tomlinson's office.

31Thus the issue of the unpaid fees was still capable of being resolved amicably even at this stage. The letter concluded by stating that if such a resolution were not possible, the Law Society and the Legal Services Commissioner would be required to deal with the matter as a complaint. This should have left Mr Donaghy in no doubt that he needed to respond urgently to avoid the matter escalating.

32Again Mr Donaghy failed to address the matter adequately. On 27 January, he acknowledged the Law Society's letter and asked for a further fourteen days within in which to respond. He said in that letter that "correspondence from the Professional Standards Department of the Law Society is treated with the utmost seriousness by this office". The Law Society replied that day, agreeing to his request and giving him until 12 February to reply.

33No response was received by 12 February and on 2 March the Law Society wrote to him again stating that, absent a formal detailed response within a further 14 days, the matter would be upgraded to a formal complaint.

34Finally, on 20 March 2010, Mr Donaghy wrote to the Law Society with a relatively detailed account of the dispute as he saw it. He also indicated that he would be prepared to take up Ms Tomlinson's offer of an informal meeting with Ms Graycar. That letter was stamped as received by the Law Society on 22 March.

35Also on 22 March, the Law Society wrote to the Legal Services Commissioner informing him that the matter had upgraded to an investigation file. That letter did not refer to Mr Donaghy's letter, and appears to have been sent prior to the receipt of Mr Donaghy's letter that same day. In any event, Mr Donaghy's response was received more than a week after the last deadline nominated by the Law Society.

36The matter then proceeded as a complaint in the normal manner. Ms Graycar was given a copy of Mr Donaghy's letter of 20 March and asked whether she wished to make any submissions, and Mr Donaghy was asked whether he wished to make any further submissions. Ms Graycar responded promptly, confirming that she was not aware until she had been provided with this letter, that Mr Donaghy was unhappy with her contribution to the appeal. She also attached emails from her clerk and from Senior Counsel, with whom she was briefed, confirming that they too had not been made aware.

37Mr Donaghy took until 9 May, and only after a further letter from the Law Society referring him to its powers under s 660 of the LP Act, to inform the Law Society that his earlier letter should be treated as his formal response. He also took issue with Ms Graycar's response, which had by then been provided to him, because, amongst other matters, he said she did not expressly respond to his offer that he would be prepared to engage in an informal mediation.

38There was then a further letter from Ms Graycar to the Law Society dated 31 May 2009, responding to Mr Donaghy's letter of 9 May. This letter also did not refer directly to Mr Donaghy's request to participate in a mediation process.

39In the Law Society's Reasons supporting its findings against Mr Donaghy, there is no reference to his being prepared to mediate the dispute, so it reasonable to assume that the Law Society did not believe this consideration to be a relevant one.

40Having reviewed all the evidence in relation to this issue, the Tribunal has come to the same conclusion. Had Mr Donaghy proposed mediation on the receipt of Ms Graycar's letter of 30 November 2009, or at the latest, had he responded promptly to Ms Tomlinson's suggestion of a meeting, in her letter of 5 January, that may well have been a relevant matter for us to consider, assuming the offer had not been accepted by Ms Graycar.

41After the matter had been upgraded to a formal complaint, which may have been able to have been avoided if Mr Donaghy had responded promptly to the Law Society's correspondence, Mr Donaghy's belated request for a mediation is not a fact relevant to our determining this Application for Review. In particular, we do accept that by that time, in view of the events that had occurred, it was unreasonable of Ms Graycar not to engage in a face to face meeting with Mr Donaghy.

42We also note for completeness, s 517 of the LP Act, which provides that a Consumer Dispute that comprises or is involved in a complaint, may be the subject of a mediation. However, insofar as the complaint involves an issue of unsatisfactory professional conduct or professional misconduct, the complaint is to continue to be dealt with after or during the mediation or attempt at mediation.

43Mr Donaghy next submitted (paragraph 4 of his Application for Review), that the Law Society took into account an irrelevant consideration, namely the determination of the Cost Assessor, after Ms Graycar's fees had ultimately been assessed in May 2011.

44The events relevant to this submission are that Ms Graycar filed an application for assessment of her fees in November 2010. Mr Lancken was appointed the assessor. Both Mr Donaghy and Ms Graycar made submissions and she provided her electronic files. Mr Donaghy said that he should be obliged to pay no more than $3,625. In May 2011, Mr Lancken certified that all of Ms Graycar's fees were recoverable and ordered Mr Donaghy to pay the costs of the assessment. In his Reasons, he noted that the amount claimed was similar to the amount estimated in Ms Graycar's initial fee disclosure, which had been accepted by Mr Donaghy, and in any event was fair and reasonable.

45Mr Donaghy lodged a Review of Mr Lancken's determination in June 2011. Thereafter, according to Mr Donaghy's letter of 15 August 2011 to the Law Society, "there was discussion between the parties and the matter was settled between ourselves on terms not to be disclosed".

46A summary of these events is contained in the Reasons supporting the Law Society's decision, set out above in paragraph 2. It is reasonable to infer from this that the Law Society did take into account the fact that the assessment allowed all of Ms Graycar's fees, and that Mr Donaghy paid the account only after he had lodged a Review.

47In his correspondence with the Law Society after the assessment process had concluded, Mr Donaghy said that he took issue not only with the fact that Mr Lancken had certified that all of Ms Graycar's fees were recoverable, but also with a number of comments made by him in his Reasons.

48In particular, he said he found it "particularly objectionable that the cost assessor has determined that mediation would not have avoided the costs of this assessment and would only have increased them", because of, in the cost assessor's words, "the attitude the respondent demonstrated in this assessment".

49These comments do not appear in the Law Society's Reasons and there is nothing to suggest that they were a relevant consideration in the Law Society's decision making process. In any event we have not taken them into account in coming to our decision in this Application for Review.

50We have also not taken into account the fact that the Mr Donaghy sought to challenge Mr Lancken's decision, even if that may have been a matter of relevance to the Law Society. Mr Donaghy submits, and we accept, that he was entitled to take this step, and that at no time was he in default of any order to pay the fees, which in the end he paid voluntarily.

51However, we believe it to be of some relevance that the overall outcome of the assessment process was that Ms Graycar's fees were allowed in full, and we have taken that into account in coming to our decision.

52This requires us to say a little more about the nature of Mr Donaghy's objection to Ms Graycar's fees. The appeal to the Court of Appeal in which Ms Graycar was briefed with Senior Counsel, Ilvary Pty Limited v Moss & Ors [2009] NSWCA 207, was unsuccessful. It involved an attempt to argue in the Court of Appeal, a new point of law, which had not been relied on at first instance in the Consumer Trading and Tenancy Tribunal. There was an initial appeal to the Administrative Division of the Supreme Court, where the judge refused to allow the new point to be argued. The Court of Appeal came to the same conclusion. Ms Graycar does not appear to have been briefed in either the Tribunal proceedings or the initial appeal.

53Paragraph 25 of the Court of Appeal's decision said:

"An appellate court will only entertain a point of law raised before it for the first time if it arises on facts which have been found, or are not in dispute".

54Apart from his apparent general dissatisfaction with Ms Graycar's performance, paragraph 12 of his letter to the Law Society of 20 March 2010, contains his specific complaint. He believed that counsel should have advised him that a way to get the point argued before the Court of Appeal, was to approach the respondent to the appeal and to agree a set of facts.

55It is not the function of this Tribunal to determine whether the point of law had any prospects of success, but there seems to be at least two reasons why this criticism of Ms Graycar is unjustified. First, we can think of no reason why the respondent, if approached to agree a set of facts at that stage, would agree to do so. This might result in it being vulnerable to a new ground of attack from the appellant, which would be entirely against its interests in the litigation.

56Secondly, the Court of Appeal judgment goes on to find, at paragraphs 26-28, that the right of appeal from the Tribunal to the Supreme Court only extends to points raised before the Tribunal and this had not been. This, Handley JA describes as "an even greater difficulty" for the appellant than the absence of agreed facts before the Court.

57Finally, even assuming there was some merit in Mr Donaghy's argument, we fail to see that this provides a proper basis for not paying Ms Graycar's fees. Indeed, Mr Donaghy, in his submissions to the costs assessor in 2011, seems to have abandoned this ground, and only pursued the matter by challenging whether Ms Graycar had carried out the research referred to in her fee note, and by questioning its relevance or reasonableness. As noted above, the cost assessor allowed the fees in full.

Our Findings of Fact

58We have therefore come to the view from the material before us and after considering Mr Donaghy's submissions, that he delayed unreasonably in paying Ms Graycar's fees, and that he failed to communicate with her between July 2009 and March 2010. As noted above, in reaching this conclusion, we did not consider relevant all the material that the Law Society appeared to have taken into account in coming to its decision. However we are satisfied from the evidence that we have considered, that these matters have been established.

Was the Conduct Unsatisfactory Professional Conduct

59The next question is whether these findings amount to unsatisfactory professional conduct or were conduct capable of being unsatisfactory professional conduct on the part of the solicitor. Mr Donaghy's position (in paragraphs 1 and 2 of his Application for Review), was that they did not.

60He argued that the definition of Unsatisfactory Professional Conduct in s 496 of the LP Act, that is, conduct 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 reasonable competent practitioner, required the conduct in question to be serious, and that an element of dishonesty or conduct of a similar nature needs to be established. We were also referred to s 498(1)(c) of the LP Act, which provides that a conviction for a serious offence, or an offence involving dishonesty, is capable of being unsatisfactory professional conduct.

61We do not agree with Mr Donaghy that an element of dishonesty or similar conduct is essential to a finding of unsatisfactory professional conduct. That is not supported by the words used in the definition, which is in any event not an exclusive definition, or by authority. There is also nothing in s 498 of the LP Act as a whole to support this proposition. We do agree with Mr Donaghy that a finding of unsatisfactory professional conduct is a serious matter, but having regard to our findings, we believe the matter to be a sufficiently serious one.

62Mr Donaghy also submitted (paragraph 3 of his Application for Review), that the Law Society erred in relying on a prior decision of this Tribunal, Law Society of NSW v Graham [2007] NSWADT 67, in its Reasons supporting its decision to reprimand him. He said that the facts in that matter and the penalty imposed, were so different to his circumstances, that it suggested that the Law Society failed to approach his matter in a proper manner.

63The issues in Graham were very different to those arising in these proceedings. There was the misuse of trust account monies amounting to a finding of professional misconduct, for which the solicitor was struck off the roll. There was also a further matter involving a failure to pay counsel's fees and to respond to correspondence from counsel.

64In its judgment at paragraph 30, the Tribunal did find that the solicitor's conduct in relation to this last matter amounting to a "contumelious disregard for the respondent's professional obligations". However the evidence suggested that the solicitor had made no attempt to contact the barrister at any time, had failed to respond to communications from the Bar Association and continued not to pay the fees even after a judgment had been obtained against him.

65Ms Webster, who appeared for the Law Society, conceded that the circumstances in Graham were more serious than what was alleged here, but suggested that the Law Society when referring to this decision in its Reasons, was only intending to refer to specific paragraphs relating to the failure to pay counsel's fees.

66Unfortunately the reference to Graham in the Law Society's Reasons is not so qualified, and the Reasons conclude by stating having regard to this decision, amongst other matters, the Law Society was satisfied that there is a reasonable likelihood that the solicitor will be found to have engaged in unsatisfactory professional conduct or professional misconduct (our emphasis).

67This reference to professional misconduct was inappropriate. If the Law Society believed that the matter involved issues of professional misconduct, then it should not have dealt with the matter summarily under s 540 of the LP Act, and should have made an Application to the Tribunal. In any event, whatever part Graham played in the Law Society's decision making process, it is not a decision which assisted this Tribunal.

68We should add that we also do not believe that Rule 32 of the Revised Professional Conduct and Practice Rules, referred to in the Law Society's Reasons immediately before the reference to Graham's case, to be relevant here. There is no suggestion that Mr Donaghy delayed paying Ms Graycar because he did not accept personal liability for her debt.

69In addition to Graham we were referred by Ms Webster to three other decisions. These were Law Society of New South Wales v McCarthy [2003] NSWADT198, Law Society of New South Wales v Davidson [2007] NSW ADT 264 and Carver v Legal Disciplinary Tribunal [1991] NSWCA 47.

70Each of these decisions involved findings of professional misconduct against the relevant solicitor, but the conduct in each instance, as in Graham, continued for a longer period and was more blatant. There were also findings that the solicitors had appropriated the funds received from their clients intended to be paid to counsel, which is not the case here.

71Generally, we did not receive much assistance from those decisions except to reinforce the general proposition that failure by a solicitor to pay a third party, including counsel, can in some circumstances amount to professional misconduct.

72We have also considered the recent decision in Council of the Law Society of New South Wales v Beazley [2012] NSWADT 153, which was published on 3 August 2012. In that matter the Law Society alleged that the solicitor was guilty of professional misconduct for failing to pay counsel's fees. There was also an allegation that he had misled the Law Society, which was not upheld. In addition, there were disputed factual issues as to whether the solicitor believed that counsel had accepted the brief on a "no win no fee basis", and whether he believed that his client had directly briefed counsel.

73The Tribunal dismissed the Law Society's application. It found that the solicitor's conduct did not amount to professional misconduct or unsatisfactory professional conduct. In relation to the allegation of professional misconduct, the Tribunal held, at paragraph 68, that they were not aware of any case where a solicitor had been found guilty of professional misconduct in the absence of other acts of misconduct, such as a breach of trust account regulations. We agree with this conclusion.

74In relation to unsatisfactory professional conduct, the Tribunal found that although the solicitor's actions were wrong and mistaken, something more was required to amount to unsatisfactory professional conduct, particularly where the conduct did not reflect on his professional competence. However, the Tribunal did find that the matter went "close to the border".

75Each matter of course depends on its own facts. Using the language in Beazley's case, this matter might also be considered close to the border, but ultimately we are satisfied that it falls on the other side. Here Mr Donaghy's unreasonable failure to pay Ms Graycar for two years, together with his failure to communicate with her for nine months, and his misconceptions about the assessment process, amount in our view to unsatisfactory professional conduct.

What is the Appropriate Penalty

76The final issue is the penalty. Mr Donaghy submitted (paragraph 6 of his Application for Review), that a public reprimand was not appropriate. He said that no penalty should be imposed, or, alternatively that he should be issued with a caution. Ms Webster submitted that a reprimand was the appropriate sanction.

77In his submissions Mr Donaghy did show some contrition in that he told us that he could have dealt with the matter better and that, with hindsight, he should have contacted Ms Graycar personally. There was no suggestion, however, that he had passed on these sentiments to Ms Graycar.

78Taking all this into account, we are of the view that the appropriate penalty is the issue of a reprimand.

Other Matters

79There are two other matters which we wish to raise. First, we were informed by Mr Donaghy, that his name had been placed on the public register of solicitors against whom disciplinary findings had been made, maintained by the Office of the Legal Services Commissioner, even before he had received the letter from the Law Society dated 2 September 2011 notifying him. He had this brought to his attention by the Legal Aid Commission where he was a panel solicitor. He was required to threaten to institute proceedings before his name was removed.

80We were informed by Ms Webster that the Law Society was obliged under the statute to take this action. However after consulting with the Legal Services Commissioner, the practice had now been changed, so that, in relation to matters dealt with summarily under s 540 of the LP Act, the outcome would only be reported after the time period for lodging a Review had passed.

81Secondly, where the Law Society does decide to discipline a solicitor summarily under s 540 of the LP Act, we believe it has an obligation to set out its reasons with some precision. As we have noted already, the Reasons provided to Mr Donaghy, included irrelevant and perhaps inappropriate matters. Also, as noted in Donaghy (No 1), the letter containing the Law Society's Reasons included an inaccurate, or at least a confusing statement about Mr Donaghy's entitlement to review the decision.

Orders

1)Our decision is that we dismiss Mr Donaghy's Application for Review and confirm the orders made by the Law Society on 1 September 2011.

2)We therefore order that Geoffrey James Donaghy be reprimanded.

3)We were asked by Ms Webster to stand over the issue of costs. This includes the costs of Donaghy (No1), which have also been reserved. If the parties cannot reach agreement about these costs written submissions in relation to costs, should be filed and served by 14 September 2012. Subject to considering any contrary views from the parties, the Tribunal will then determine the issue on the basis of those submissions and without further oral argument.

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Decision last updated: 17 August 2012