Monthly Archive September 2011

Council of the Law Society of NSW v Simpson [2011] NSWADT 242

Peter Kaiser Simpson was the subject of a disciplinary application by the Council of the Law Society of New South Wales alleging that he had been guilty of professional misconduct.

The Law Society of New South Wales contended that the solicitor had breached sections 254 and 255 of the Legal Profession Act 2004 in that he was guilty of misappropriation and delay in the payment of disbursements due to third parties and had that he failed to supervise his employees.

The solicitor admitted the conduct described in the amended particulars relied upon by the Law Society as constituting professional misconduct, however he denied the grounds alleging misappropriation.

The Tribunal set out the amended particulars in respect of each of the grounds of complaint and also the agreed facts.

On 7 September 2009 Mr Napper, a trust account inspector, attended the solicitor’s office and inspected the firm’s accounts. Mr Napper identified unpaid disbursements and delay in having paid such disbursements where funds had been received by the firm into the office account, either by transfer from trust, from settlement monies or otherwise.

On 8 September 2009 Mr Napper spoke to the solicitor and informed him that there were unpaid disbursements which had not been paid. The solicitor said that he was not aware of such disbursements. Mr Napper raised with the solicitor the arrangements in respect of the payment of unpaid disbursements such as fees due to Mr Jurisich of Counsel and Aspen Medical. The solicitor said he would have to check with his staff. The solicitor was not aware of the arrangements relating to Counsel and Aspen Medical. The Law Society accepted the solicitor’s position in relation to that issue.

On the afternoon of the 8th of September 2009, the solicitor spoke to his accounts staff and informed them of the remarks of the trust account inspector. The head accountant informed the solicitor that there were unpaid disbursements and unpaid memorandum of fees and arrangements were in place for the payment in two instances. The solicitor sought details and he was then informed that in respect of monies transferred from trust to office there was $196,476.00 in unpaid disbursements, not including fees to Counsel and Aspen Medical. In respect of monies paid directly into the office account there were $187,558.24 in unpaid disbursements not including fees due to Counsel and Aspen Medical. The total amount owing to Counsel was in the sum of $1,297,796.06.

In June 2008 the head accountant discussed the matter directly with Counsel and as the practice had cash flow problems and an arrangement was made whereby his fees were reduced by way of payment of $20,000.00 per week. The solicitor told the head accountant that this was the first he had ever heard of this arrangement. Similar arrangements had been put in place with Aspen Medical and again the solicitor had not been consulted about this. There was credit in the solicitor’s firm’s favour in the sum of $72,905.01 in respect of Aspen Medical.

The solicitor had in practice a system whereby he had delegated to the head accountant and administration manager authority to sign office cheques. 70 such cheques were issued daily. The solicitor signed trust cheques but if he was absent, with permission of the Society, such cheques were signed by authorised solicitors in his employ.

By way of background, the solicitor had been admitted to practice in 1976 and had 75 staff including 13 employed solicitors. He currently had over 4000 matters.

In respect of each of these matters there was a comprehensive system whereby appropriate disclosure was made pursuant to the provisions of the Legal Profession Act; Motor Accidents Compensation Act and Workplace Injury Management and Workers Compensation Act. In respect of each matter appropriate authorities were obtained from the clients in respect of the payments of costs, disbursements and outlays.

The Administrative Decisions Tribunal, constituted by M Chesterman, Deputy President, M Riordan, Judicial Member and C Bennett, Non-judicial member, referred to the relevant statutory provisions of the Legal Profession Act.

Findings

The Tribunal found that the Law Society had established the three grounds being those admitted by the solicitor, namely:

  1. Breach of section 254 of the Legal Profession Act
  2. Breach of section 255 of the Act; and
  3. Failure to supervise

See Re Robb & Anor (1996) 134 FLR 294; Law Society of New South Wales v Davidson [2007] NSWADT 264

Did the solicitor’s conduct involve misappropriation?

It was contended by the Law Society that the conduct of the solicitor amounted to misappropriation. Law Society of New South Wales v McCarthy [2003] NSWADT 198; Council of the Law Society of New South Wales v Doherty [2010] NSWCA 177.

It was contended on behalf of the solicitor that in disciplinary proceedings under the Legal Profession Act “dishonesty” is a “necessary element” in any charge of misappropriation; Council of the Law Society of New South Wales v Clapin [2011] NSWADT 83; Brereton v Legal Service Commissioner [2010] VSC 378.

In the latter judgment, Beryl J observed at [39]:

“For reasons which I will give when I consider the issue of dishonest belief, it is a very different thing to say that a person had a dishonest belief or “well knew” something on the one hand, and that a person “ought to have known” something on the other. The two states of mind are of a different order and legal character and mark the boundary between incompetent or negligent administration on the one hand and misappropriation on the other”.

The Tribunal found that the solicitor was unaware until Mr Napper spoke to him on 8 September 2009 of three (3) crucial aspects of his firm’s management of finds received by it. In such circumstances the Tribunal found at [46] that the conduct alleged against the solicitor did not amount to “misappropriation”.

Orders

The Tribunal reprimanded the solicitor and fined him $8,000.00 and directed him to attend two (2) refresher courses offered by LawCover and pay the applicant’s costs.

For a copy of the decision of the Tribunal please see: www.caselaw.nsw.gov.au/action/PJUDG?jgmtid=155194.

Maloney v The Honourable Michael Campbell QC & Ors [2011] NSWSC 470

On 24 May 2011 Hoeben J delivered judgment in respect of a claim by Brian Vincent Maloney, a Local Court Magistrate, seeking prepatory relief that the decision of the defendants that he is currently incapacitated for performance of the office of Magistrate is invalid.

A judicial officer can only be removed from office pursuant to s.53 of the Constitution Act 1982, by the Governor on an address from both Houses of Parliament in the same session, seeking removal on the grounds of prudeness, behaviour or incapacity. The removal can only occur if there is a report from the Conduct Division containing an opinion set out in s.28(1)(a) Judicial Officers Act, 1986, NSW (“the Act”).

Magistrate Maloney was subject to four complaints. Three of these relate to events between 17 September 2008 and 23 December 2009. The first two complaints were from individuals who appeared in proceedings before the plaintiff, Mr Tareq Altaranesi (9 January 2009) and Mr Oliver Banovec (17 September 2009). The third complaint was referred to the Conduct Division being from Dr Duncan Wallace concerning mental health hearings which took place before Magistrate Maloney on 3 December 2009 at the Kiloh Centre, Prince of Wales Hospital. The fourth complaint consisted of an image on Magistrate Maloney’s computer in 2002.

Magistrate Maloney had first consulted Dr Olav Nielssen, Psychiatrist, on 15 February 2010. He was diagnosed with a bipolar disorder. Treatment began with Dr Nielssen in February 2010 and there has been no further apparent behaviour or any evidence of hypermanic episode on his part.

The Conduct Division required Magistrate Maloney to be examined by Dr Phillips and Dr O’Dea. The psychiatrists gave joint evidence to the Conduct Division. In the report of 10 January 2010 Dr Nielssen expressed a positive opinion in relation to treatment and that Magistrate Maloney had good insight regarding the nature of the condition and the need for that treatment.

The Conduct Division accepted that the Doctor’s opinion, in the joint report, was that Magistrate Maloney’s mood state is currently stable and that he is currently fit to perform the duties of a judicial officer not being affected by symptoms that might affect his capacity to perform such duties.

However, the Conduct Division went on to find that Magistrate Maloney’s bipolar 2 disorder was a lifelong one requiring continuous treatment and supervision. If not correctly treated he will suffer hypermanic attacks and other changes of mood with increasing frequency and not increasing the intensity. On such a basis he would be clearly incapacitated for his judicial duties.

It was in this context that the Conduct Division formed the opinion that incapacity could justify parliamentary consideration of the removal of Magistrate Maloney from office on the ground of prudent incapacity.

In argument before Justice Hoeben, it was contended that the Conduct Division had fallen into error. His Honour identified those errors at [82] (a-d) namely that:

  • It replaced a statutory test for proven incapacity with a speculative of enquiry as to whether there was a chance of previous incapacity currently reversed could re-emerge within a 12 year period;
  • Did not apply the Briginshaw standard;
  • If relied upon a finding of the plaintiff would or might have needed treatment which was never put to him and was against the evidence of the treating psychiatrist;
  • the sequence of events was not supported by the evidence of Dr O’Dea or Phillips

Hoeben J ultimately rejected all of the arguments. His Honour at [109] found “that the conduct division appropriately summarised the effect of the evidence.”

His Honour noted that there was no issue in the proceedings that Magistrate Maloney had been working as a Magistrate since his return to work in August 2010 without complaint and without reoccurrence of symptoms. His Honour found that the evidence of Dr Nielssen, with which the other two Doctors did not disagree was that on balance, Magistrate Maloney would be the subject of at least one (1) further hypermanic episode during his working career as a Magistrate. If not detected immediately so that a gap between recognition and treatment occur, this could lead to behaviour that was unjudicial.

At [114] His Honour dealt with the finding that Magistrate Maloney had a capacity for denial, self justification and self deception. It was contended on his behalf that there was no evidentiary basis for such finding. His Honour referred to “some of the evidence relating to the screen saver issue and the facial gesture made at the Prince of Wales Hospital, that evidence was given at a time when the Plaintiff was functioning appropriately as a Magistrate receiving treatment

It is unclear whether His Honour was actually referring to the evidence of Magistrate Maloney given in the Conduct Division about these issues or other evidence given by witnesses at the time of such behaviour. This is an important distinction because both the screen saver and Prince of Wales Hospital matters occurred at a time when Magistrate Maloney was undiagnosed and not receiving treatment. Though his Honour went on to refer to the findings not being about medical issues but were demeanour based findings. The context in which the Conduct Division made such findings specifically relating to the finding that Magistrate Maloney would be unlikely to comply with his treatment regime.

Justice Hoeben dismissed the summons with costs.

Police v Wayne Riley & Jeanette Riley (2011)

In this matter Greg Walsh acted for International Australian Champion Golfer, Wayne Riley, and his mother who were charged with assault occasioning actual bodily harm and affray.

The charges arose as a result of an incident after Wayne’s father, Graham Riley, 71, was involved in an altercation with a youth two days before Christmas in 2010.

Wayne who has played in the European Golf Circuit for 20 years and has been a British Television Sports Commentator, denied emphatically that he was guilty of assault occasioning actual bodily harm, common assault and affray. His mother Jeanette also strenuously denied her guilt.

The incident occurred when the Riley family were on their way to a local restaurant at Oatley when the youth was involved in a ‘push and shove’ incident with Wayne’s father.

The 1991 Australian Open Champion Golfer had been heading to a bottle shop when the scuffle between his father and the youth occurred. On his return to where his father was with the youth, Wayne allegedly got into an altercation with the youth. A number of neighbours, including a police officer, came onto the scene. The Court then heard that Mrs Riley also became involved and ended up on the ground.

The case was heard by Magistrate Trad at Sutherland Local Court over two days. Her honour found that Mrs Riley had tried to stop the fight between her son and the youth and was pushed away. The youth had grabbed Mrs Riley hitting her chest and as she fell she feared she would be hit again and she struck out with her feet. She had not deliberately kicked the youth, whose head by this time was on the ground. The youth had also struck the golfer and the two had struggled with Wayne acting in self defence.

Greg Walsh made a successful application for costs.