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Lawyers’ false attestation of documents and fraudulent certificates of advice

Up-updated post, 18 May 2017:  See also LSC v Huggett [2017] NSWCATOD 67, which gathers together additional authorities at [63].

Updated post, 11 March 2016: In The Law Society of New South Wales v Gathercole [2016] NSWCATOD 27, the Tribunal was asked by the applicant to order the removal of the practitioner’s name from the roll for falsely attesting a wife’s signature in her absence on a document presented to the practitioner by the fraudster husband, a bank manager.  Though the Tribunal found that the conduct amounted to ‘professional misconduct of a very high degree’, the practitioner was insightful, remorseful, and had good references.  So they gave him a $5,000 fine instead.

Original post: What’s the going rate by way of penalty for lawyers successfully prosecuted for falsely attesting the execution of documents? As usual in the law of professional discipline, the cases are all over the place — what is analysed below is a collection, not a line of, authorities — but I am unaware of any case in which a lawyer’s practising certificate has been interfered with solely for purporting to sign as witness a document they did not witness the execution of or for falsely giving a certificate that advice about the document was given.  And you would have to say that a fine of a few thousand dollars and a reprimand is the going rate. Justice Kirby, then President of the Court of Appeal, adverting to the Court’s role as fixing the standards to be observed in determinations by disciplinary tribunals, overturned a disciplinary tribunal’s decision to strike off a solicitor who gave a false certificate of advice in relation to a mortgage, exacerbated the wrongdoing by oral representations to the mortgagee’s solicitor and was not frank in the disciplinary investigations.  The Court substituted a fine and a reprimand: Fraser v Council of the Law Society of NSW [1992] NSWCA 1992.

Because of the dishonesty inherent in this species of disciplinary wrong, the cases have traditionally been clear that it amounts to professional misconduct rather than to unsatisfactory professional conduct.  But the New South Wales Court of Appeal’s decision in Xu v Council of the Law Society of NSW [2009] NSWCA 430 bucks the trend and characterised one such instance as unsatisfactory professional conduct.  All of the other cases need be re-evaluated in light of the Court of Appeal’s decision.

Below are my notes of reading the cases, for a disciplinary prosecution in which I recently acted.  I was put onto some of them by readers of this blog, for which many thanks.

Continue reading “Lawyers’ false attestation of documents and fraudulent certificates of advice”

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Defence of reliance on professional body

Traditionally, it has been a defence to disciplinary prosecution that a lawyer sought and followed advice from their professional body.  Hutley JA said in Law Society of NSW v Moulton [1981] 2 NSWLR 736:

‘The true significance of the rulings of the Law Society in relation to professional misconduct was pointed out by Lord Reid in Brown v Inland Revenue Commissioners [1965] AC 244 at p 258, where the solicitor had acted in conformity with the ruling of the council of the Law Society of Scotland, a ruling which the House of Lords considered was inconsistent with the law.  His Lordship said:

“This opinion … negatives any possible suggestion of professional malpractice by the appellant or any other solicitor who has acted in accordance with it.”

In other words, a positive, but erroneous, advice from the Law Society may constitute a defence to a charge of malpractice.’

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$25,000 fine for cheques in the bottom drawer scheme

The latest decision from VCAT’s Legal Practice List is Legal Services Commissioner v JHMcC [2011] VCAT 231, a ‘guilty plea’ to six charges of professional misconduct. A lawyer purchased a franchise to operate under the name of one of Melbourne’s leading personal injury firms — I never knew such things existed — and was responsible for 1,000 files at a time down in Traralgon.  (Don’t try that at home, by the way, kids:  I well remember multiple retainers when I was solicitor for a gentleman formerly of the profession who from an office in the suburbs of an Australian capital (not the respondent in this case, obviously), and with the assistance of only non-legal staff, had 1,000 personal injury files open at a time.  He was a most vulgar man, insistent on telling me at every opportunity how much money he made, and of the details of his expenditure of it in pursuit of hackneyed hedonism.  And he was quite often negligent, apparently regarding the excess he had to pay his indemnity insurer as a cost of business.)

Anyway, our lawyer underpaid tax and suddenly had to pay $160,000 to the tax man, putting financial stress on his business.  So, when he received payment of bills from clients, he paid the whole lot into office, wrote cheques made out to barristers for their fees which had been billed to and received from clients as disbursements, and then put them into the bottom drawer to be retrieved and delivered only when convenient to the practice’s cash flow. The solicitor pleaded guilty to six charges of professional misconduct. Charge 6 was of breach of the following fiduciary duty, which I must confess is not one I had previously heard of:

‘to apply such moneys [amounts received for disbursements] in accordance with the purpose for which they were supplied by that client’.

Judge Pamela Jenkins, presently a Vice-President of VCAT and two other members were invited to impose a fine of at least $20,000 and plumped for $25,000.  In addition, costs payable by the solicitor were fixed at $6,715.

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Parties cannot by agreement give jurisdiction to a tribunal it does not have

Some things you learn the hard way.  One of my earliest appearances, as a young solicitor at a packed directions hearing before the notorious Master Patkin of the County Court, involved a discussion of the Court’s jurisdiction which I had not seen coming.  I suggested that the other side had consented to jurisdiction.  It earnt me a Socratic lecture, in public.  Here is what the law says, as recounted recently in Neill v Legal Profession Complaints Committee [2011] WASCA 48 at [7]:

‘In Pantorno v The Queen (1989) 166 CLR 466, the High Court made it clear that parties who agree a proposition of law cannot bind a court. Parties cannot by consent confer jurisdiction on a tribunal if none exists: see R v Moore (1976) 11 ALR 449 and Australian Education Union v Lawler (2008) 169 FCR 327 at [185].’

Of course it is not quite as simple as that.  Never is.  Creatures of statute may provide by the statute for the parties to agree on the creature having jurisdiction which it otherwise does not have.  The Magistrates’ Court Act, 1989, s. 100(1)(c), for example, provides for the parties to agree on the Court hearing a case where more than its jurisdictional limit of $100,000 is at stake.  Some imperfect knowledge of that proposition was what led me astray.

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Disciplinary decisions result in res judicatae

So said England’s highest court in R (on the application of Coke-Wallis) v Institute of Chartered Accountants in England and Wales [2011] UKSC 2. An accountant and his wife were directors and shareholders of trust companies carrying out regulated financial services in Jersey.  Jersey is an island off the coast of Normandy which is not part of the United Kingdom but which has a large financial services sector closely associated with England, and 20% flat taxation. A Jersey regulator ordered the accountant to stop what he was doing and directed that no records of the companies be removed from their offices.  Four days later they were arrested at a car ferry with suitcases full of company records, ‘in flagrant breach’, as Lord Collins put it, of the direction, which they were trying to ‘spirit off the island’ as Lord Clarke put it.

Disregard of a direction of the regulator was a crime. They were convicted and fined.  Their appeal was unsuccessful. About a year later, the Investigation Committee of the Institute of Chartered Accountants in England and Wales ‘preferred a complaint’ against the accountant.  It was heard in April 2005 and dismissed on the spot. About a year later again, the Committee preferred a second complaint.  The accountant took a preliminary point: the defence of res judicata.  The Institute’s disciplinary committee found that the second complaint was not barred by res judicata.  On review, the trial judge and the Court of Appeal agreed.  The Supreme Court unanimously did not, and kyboshed the second complaint, rewarding the accountant for his stamina. See also the case note by Mayer Brown. (In Victoria, compare Kabourakis v Medical Practitioners Board of Victoria [2005] VSC 493, which I noted here.  It suggests that often, these questions will be determined by statutory interpretation, especially where the disciplinary procedures are set up by statute.)

Continue reading “Disciplinary decisions result in res judicatae”

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Incompetence as ‘unsatisfactory professional conduct’

A barrister in NSW is being prosecuted for being incompetent in the presentation of a criminal appeal: Council of the NSW Bar Association v DCF [2010] NSWADT 291.  The incompetence of his written submissions are said to amount to unsatisfactory professional conduct.  Section  496 of the Legal Profession Act, 2004 (NSW) says that 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’.

The barrister admits that his submissions were incompetent, but denies any lack of diligence.  His application for summary dismissal of the charge on the basis that unsatisafactory professional conduct requires both incompetence and a lack of diligence failed.  Either incompetence or a lack of diligence alone may warrant discipline.

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The sting in calling in aid your mental infirmity in disciplinary proceedings

Legal Profession Complaints Committee v DL [2010] WASAT 133 is one of those cases where psychiatric evidence called in aid of the disciplinary defendant, a solicitor, was used in support of the Tribunal’s decision effectively to strike the solicitor off.  In relation to mental illness, the ‘protective not punitive’ mantra of the law of professional discipline has some bite, and it should.  The ‘sting’ can only ever have operation where the psychiatric problem which gave rise to the impugned conduct is also present at the date of the penalty hearing; the only risk in the plea in mitigation ‘I was unwell in my mind at the time I did these things, but I’m better now’ is in not making out the ‘I’m better now’ bit. The Tribunal concluded: Continue reading “The sting in calling in aid your mental infirmity in disciplinary proceedings”

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Punk sues you in civil court: can you sic them for malicious prosecution?

Kinghorn v HKAC Asset Management Services (AFFL) Pty Ltd [2010] NSWDC 232 reviews the law at the extremities of the tort of malicious prosecution. I must say that I had always assumed that there needed to be a criminal prosecution before the tort of malicious prosecution might be made out, but there is no doubt that that is not the case: an action to bankrupt an individual or wind up a company may also found the tort, along with certain other kinds of actions set out at [20].  But this case required consideration of whether it could be said that malicious prosecution of a civil proceeding which involved no element of the seeking of a penalty could be seen not to found the tort clearly enough to justify summary dismissal of the claim.  The answer was no; the suit for summary dismissal failed. (There seems to be more resistance to expanding the law to provide a remedy for maliciously instituted disciplinary proceedings (see Gregory v Portsmouth City Council [2000] 1 AC 419 at 432; Noyce v Robbins [2007] WASC 98).) Continue reading “Punk sues you in civil court: can you sic them for malicious prosecution?”

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Administrative Decisions Tribunal says Law Society’s penalty submissions too lenient

In Council of Law Society of New South Wales v TWS [2010] NSWADT 240, a three member tribunal presided over by Judicial Member Brennan handed down their decision 19 months after a two day hearing.  They found that the Society’s submissions on penalty were inadequate.  They reviewed the NSW authorities on the Tribunal’s powers in that circumstance, gave the solicitor notice that they were considering making a ‘protective order’ (whatever that might be, given that the sole purpose of professional discipline is ostensibly protection of the public), and told him to come back and make submissions.

What the Society had sought was a fine, a reprimand, a right to practise only as an employee for three years, and thereafter a right to seek a full practising certificate only upon doing well in certain educational courses.  There were many charges, many were made out, they involved repeated and serious wrongs, and the solicitor’s defence of them strongly suggested he still did not get the extent of and nature of his wrongdoing.  The review of the law is set out at [11] – [12].  In Victoria, compare Law Institute of Victoria v IAB [2008] VCAT 1998 where something in the nature of a plea bargain was engaged in between the Institute and the solicitor only to be varied against the solicitor’s interests by VCAT.

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Letter of demand for fees found to be professional misconduct

A solicitor represented himself unsuccessfully before Western Australia’s State Administrative Tribunal in Legal Profession Complaints Committee v MLS [2010] WASAT 135, being found guilty of three counts of professional misconduct and three of unsatisfactory professional conduct.  The Tribunal’s summary of its own findings is reproduced at the end of this post. The solicitor told a Magistrate on an ex parte application for an intervention order against his client that the client had a criminal record, which the solicitor knew the client did not have.  Hardly surprising that that conduct was found to be misconduct.  More interesting, perhaps, is the finding that an unduly aggressive demand for fees was found to amount to professional misconduct.  It said, in effect — If you do not pay me $2,000, I will sue you, get default judgment, and bankrupt you for 5 years.  The problem was that the client had a rather good defence: the solicitor had not sent him a bill for the $2,000 disbursement.  The Tribunal found misconduct, explaining at [53]ff: Continue reading “Letter of demand for fees found to be professional misconduct”

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Depressed serial non-responder not to practise on own account until 2013

Update, 22 October 2010: To similar effect is Legal Services Commissioner v SJO [2010] VCAT 1686.  There, a depressed solicitor in her mid-60s with a string of previous disciplinary findings, was found to have engaged in professional misconduct in practising without a practising certificate.  The solicitor’s is a sorry tale: doctor husband developed psychosis for which he refused to obtain treatment; daughter became addicted to heroin; solicitor contracted breast cancer.  Mind you the Tribunal found that though a mitigating factor, the depression did not excuse the solicitor’s conduct, or explain her professed belief that by virtue of having lodged an application for a practising certificate and not having received a rejection of the application, she was entitled to practise. Somehow or other, this case managed to be heard over 8 days commencing in February. The solicitor was in her mid-60s and on her own account most unlikely to practise in the future. Rejecting the Commissioner’s unusual but not illogical argument that the solicitor should be struck off because of the incongruity in holding the solicitor out as fit to practise as a solicitor during the period in which she was not entitled to apply for a practising certificate, Senior Member Howell extended that period by a year, to 24 February 2015.  Explaining the rejection, the Senior Member said:

‘Protection of the public is a relevant consideration, but the Tribunal has concluded that little, if anything, would be gained by making a recommendation to the Supreme Court that the name of [the solicitor] be removed from the Supreme Court Roll. The Tribunal does not regard it as “incongruous” that the name of a person whose name has been on the Roll for almost 40 years, and who is unlikely to practise in the future for both legal and personal reasons, should be allowed to remain upon the Roll.’

Original post: In Legal Services Commissioner v SWM [2010] VCAT 1543, a depressed former solicitor was told not to apply for a full practising certificate until 2013.  He had previously been found guilty of professional misconduct for not responding to the Legal Services Commissioner’s request for responses to complaints and other instances of inaction where action was called for. 17 times: on 1 November 2007, 7 May 2008, 19 November 2008, 3 February 2009, 28 September 2009, and on 26 November 2009.  On 2 December 2009, the solicitor’s practising certificate was cancelled. He did not apply for a practising certificate on 1 July 2010, when he was permitted to do so again. This time, he was found guilty of four charges of professional misconduct.

The solicitor had an unblemished record to 2006.  Illness struck his family and he became depressed.  Inactivity followed.  Senior Member Howell seems to have accepted that the depression explained the inactivity.  Nevertheless, he ordered that the practising certificate-less former solicitor not apply for a full practising certificate until mid-2013, but allowed him to apply for an employee practising certificate on 1 July 2011.  This post considers the order and alternative orders which might also be appropriate in a jurisdiction whose rationale is, it is said, protection of the public. Continue reading “Depressed serial non-responder not to practise on own account until 2013”

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What happens if you root your matrimonial client’s wife?

America’s excellent Professional Responsibility Blog, to which I have added a link in my blogroll, is published by Professor Alberto Bernabe of Chicago.  He has gathered together the answers, in America at least.  In the latest eruption of lust in connection with legal practice, which involved only an attempt, the Indiana Supreme Court just told the attorney to take a break for 90 days.  Despite the fact, that is, that his retainer by the husband was in relation to matrimonial disputes with the wife. The Professor’s latest contribution to the ever-enjoyable debate about sex with clients is here.  The Texans are all angst-riddled about whether to prohibit the practice.  The Professor also recently published another in his series of ‘How Not to Practice Law‘: ‘Ask Client to Pay Fees with Drugs‘.

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NSWCA on professional discipline

A GP was struck off after a hearing lasting 40 days. He was found to suffer a delusional disorder. The New South Wales Court of Appeal recently delivered a long judgment in an appeal from that decision, as reported on ABC: Lindsay v Health Care Complaints Commission [2010] NSWCA 194.  The quote the doctor got for the defence of the disciplinary proceedings, which raised multifarious issues, was $800,000.  So the doctor represented himself, cross-examining each of the 48 witnesses called against him at length.

The leading judgment of Acting Justice of Appeal Sackville, with whom the other judges agreed, considers the requirements of natural justice to be afforded to an unrepresented professional in a case involving as many issues as this one did, and with as serious a potential consequence.  His Honour concluded that the Medical Tribunal of NSW unduly restricted the doctor’s cross-examination, but found that the consequences did not justify a retrial.  The reasons also consider the obligations on tribunals who hear such serious cases as applications to deprive professionals of their livelihoods but which have a procedure and evidence regime which is more or less entirely in the discretion of the decision makers.  In this case, the charge was amended to include a new allegation, based on the doctor’s evidence at the hearing. Continue reading “NSWCA on professional discipline”

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“Have a nice day, you piece of shit”

Incomprehensibly, American lawyers are furiously debating whether an advocate saying to an unrepresented grandmother to whom he had been opposed that day on behalf of one of her relatives ‘Have a nice day, you piece of shit’ is conduct warranting discipline.  For example: here,  here, here, and  here.  To be fair, their conduct rules don’t seem to be as fuzzy as ours, and the debate seems to rage around definitions.  But seriously, there’s no nice way to take ‘Have a nice day, you piece of shit’.  It’s qualitatively different from saying to an opponent lawyer ‘You’re full of shit’, or even ‘You’re fucked if that’s your best point buddy’, not that I am condoning such language between lawyers. Continue reading ““Have a nice day, you piece of shit””

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Disciplinary penalties for pre-2006 conduct

There are still disciplinary cases coming through the system in respect of conduct which occurred before 12 December 2005, the date on which the Legal Profession Act, 2004 commenced.  Back in those days, the maximum fines the Legal Profession Tribunal could render under the Legal Practice Act, 1996 were $1,000 for unsatisfactory conduct and $5,000 for misconduct (unless the Full Tribunal sat, in which case, a maximum fine of $50,000 was available for misconduct).  Recently, the Legal Services Commissioner accepted, in a disciplinary prosecution, that the penalty for a disciplinary wrong committed before 12 December 2005 ought not to exceed the maximum penalty available at the time. That is so even where the post-12 December 2005 investigation of the pre-12 December 2005 conduct was properly carried out pursuant to the Legal Profession Act, 2004 and where the VCAT proceedings in which the fine is rendered are governed by the 2004 Act.

So, assuming the Commissioner maintains a consistent position, the highest fine he is likely to contend for in any unsatisfactory conduct charge in respect of pre-12 December 2005 conduct is $1,000, making the desirability of prosecuting such conduct, as opposed merely to reprimanding the practitioner, questionable. Continue reading “Disciplinary penalties for pre-2006 conduct”

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New Zealand’s Briginshaw

Z v Dental Complaints Assessment Commission [2008] NZSC 55 is the subject of this post, as well as of this one and this one.  Set out in this post is the entirety of the three sets of reasons’ discussion of the appropriate standard of proof in disciplinary prosecutions, starting with those of the plurality (Blanchard, Tipping and McGrath JJ) reaffirming the status quo, which is expressed in Australia in the decision of Chief Justice Dixon in Briginshaw v Briginshaw (1938) 60 CLR 336 at 361ff, followed by the concurring decision of Anderson J, and the passionate dissent of Chief Justice Elias, who considered that the criminal standard of proof should be applied.  Part only of the relevant part of the Chief Justice’s dissent — her summary — was reproduced in my earlier post. Continue reading “New Zealand’s Briginshaw”

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Chief Justice Elias’s argument for criminal standard in disciplinary prosecutions

In Z v Dental Complaints Assessment Committee [2008] NZSC 55, which I wr0te about in my last post, the Chief Justice of New Zealand, Dame Sian Elias, argued in a powerful dissent that the standard of proof required in disciplinary proceedings should be the criminal standard, as it is in England.  This is her argument, as summarised by her Honour:

‘[47] … I think the time has come to say simply that the criminal standard of proof applies.  I summarise the reasons why I am of that view, which have already been foreshadowed.

[48]    First, making allowances for the dress of inherent probabilities under which guise much of the discussion has been conducted, the preponderance of authority favours the criminal standard, at least where the charges are serious or entail conduct which is criminal.  That is the effect of the decisions of the Privy Council in [Campbell v Hamlet [2005] 3 All ER 1116 (PC), Lanford v General Medical Council [1993] 1 AC 13, and McAllister v General Medical Council [1993] All ER 982 and Sadler v General Medical Council [2003] 1 WLR 2259 (PC)].  It is also consistent with the decisions in [Bhandari v Advocates Committee [1956] 1 WLR 1442 (PC)] and Re a Medical Practitioner [[1959] NZLR 784].  In both cases, the difference between the criminal standard and the standard required by the context was thought to be a difference “of little importance”.  In the present case the charges of indecent touching clearly meet the level of seriousness envisaged by cases such as McAllister and Sadler.  I would myself however draw no distinction between charges laid under s 54 of the Dental Act according to whether they are or are not in substance criminal or properly classified as “serious misconduct”, on the basis that there should be a single standard of proof under the section.  In this, I would apply the approach adopted by the Privy Council in Campbell v Hamlet and Lanford. Continue reading “Chief Justice Elias’s argument for criminal standard in disciplinary prosecutions”

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Z v Dental Complaints Assessment Committee

Z v Dental Complaints Assessment Committee [2008] NZSC 55 is an important case which considers in depth just how quasi-criminal professional discipline proceedings should be.  It is a decision of New Zealand’s Supreme Court, their equivalent of our High Court, now 6 years old.  It considers the disciplinary prosecution of a dentist, acquitted of sexually assaulting sedated patients, against whom disciplinary proceedings were brought in respect of the same conduct as was the subject of the criminal charges.  That the rule against double jeopardy (i.e. the doctrine of autrefois acquit) had no operation was accepted by the dentist.  But he argued that the disciplinary proceedings were an abuse of process.  Four of the five judges agreed with him in relation to one only of the particulars of professional misconduct, while one judge said even that should be allowed to go ahead.  One of the four judges, Chief Justice Elias, held that all of the particulars of misconduct were an abuse of process.  The second issue was what standard of proof these disciplinary charges had to be established to.  All but the Chief Justice held that the appropriate standard was the civil standard informed by what we would call the Briginshaw principles.  The Chief Justice, however, argued persuasively in favour of the imposition of the criminal standard in serious professional disciplinary proceedings. Continue reading “Z v Dental Complaints Assessment Committee”

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Supreme Court overturns 2008’s biggest discipline decision

Update, 31 January 2012:  See now Council of the NSW Law Society v Simpson [2011] NSWADT 242 re the meaning of ‘misappropriation’.  It was on this point that Justice Bell in Brereton overturned VCAT’s decision: they had not recorded making a finding of dishonest intention.

Original post: Justice Bell yesterday allowed an appeal by Michael Brereton from the decision I wrote about here: see Brereton v Legal Services Commissioner [2010] VSC 378.  The matter is to be re-heard by the same tribunal.  Mr Brereton is making quite a comeback: see this article in The Australian.  Some entertainment for readers of this blog should follow if he makes good his stated intention to sue the Legal Services Commissioner and the Law Institute.

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Can conduct unconnected with practice constitute misconduct at common law?

Recently, it has been suggested that misconduct unconnected with legal practice (which the High Court has referred to as ‘personal misconduct’) may constitute professional misconduct at common law: New South Wales Bar Association v Cummins [2001] NSWCA 284; Legal Services Commissioner v RAP [2009] VCAT 1200, the subject of this post.  This post considers whether that is correct, in light of A Solicitor v Council of the Law Society of NSW [2004] HCA 1; 216 CLR 253.  The answer to that question does not affect what I suggest may be a separate question, namely whether personal misconduct may warrant disbarment (which is clearly the case), since disbarment is not conditioned on a finding of professional misconduct, but is dependent on a finding of unfitness for practice.  I am interested to hear others’ views. Continue reading “Can conduct unconnected with practice constitute misconduct at common law?”