Law Society of New South Wales v Shalovsky [2008] NSWADT 14 (7 January 2008)

Last Updated: 12 February 2008

NEW SOUTH WALES ADMINISTRATIVE DECISIONS TRIBUNAL

CITATION:
Law Society of New South Wales v Shalovsky [2008] NSWADT 14


DIVISION:
LEGAL SERVICES DIVISION

PARTIES:
APPLICANT
Council of the Law Society of New South Wales
RESPONDENT
Mark Harris Shalovsky



FILE NUMBERS:
072003

HEARING DATES:
26/09/2007

SUBMISSIONS CLOSED:
26 September 2007



DATE OF DECISION:
7 January 2008

BEFORE:
Brennan JWF - Judicial MemberBishop C - Judicial MemberKirkby E - Non Judicial Member





LEGISLATION CITED:
Legal Profession Act 1987
Legal Profession Act 2004

CASES CITED:
Allinson v General Council of Medical Education and Registration [1804] 1 QB 750
Johnson v Needham (1909) 1 KBD 626
Johnson v Miller [1937] HCA 77; (1937) 59 CLR 467
Law Society v Knudson [2006] NSWADT 49.
Law Society v Vardos [2006] NSWADT 118
NSW Bar Association V Howen [2003] NSWADT 117
NSW Bar Association V Howen (No 2) [2003] NSWADT 235.
Veghelyi v Law Society of New South Wales, unreported, Supreme Court of New South Wales 6 September 1989
Walsh v Tattersall [1996] HCA 26; (1966) 70 ALJR 884

TEXTS CITED:


APPLICATION:
Solicitor – Disciplinary application

MATTER FOR DECISION:
Principal matter


REPRESENTATION:
L Pierotti, solicitor
TA Williams, solicitor


ORDERS:
1. That the Respondent be publicly reprimanded
2. That the Respondent pay the costs of the Applicant as agreed or assessed
3. That in the event of the Solicitor applying for a Practicing Certificate that it shall be a condition of the issue of such Practicing Certificate that the Solicitor satisfactorily complete all four modules of the Risk Management Course provided by LawCover within one year of being issued with a Practising Certificate


Reasons for Decision:

1 The Application of the Law Society ("the Society") filed in the Tribunal alleged that the Respondent ("the Solicitor") was guilty of professional misconduct.

2 The allegations were detailed and particulars given in the following terms (as amended without objection at the hearing):

Mark Harris Shalovsky was guilty of professional misconduct as set out in the following allegation:

Professional Misconduct

In respect of three (3) matters:

1. The legal practitioner, without reasonable excuse, failed to comply with a Council requirement under section 152 of the Legal Profession Act 1987.

2. The legal practitioner has failed to assist the Law Society in the investigation of a complaint.

Particulars of Grounds of Complaint

In these Particulars:

"the Solicitor" means Mark Harris Shalovsky

"the Society" means the Law Society of New South Wales.

"the Committee" means the Professional Conduct Committee of the Law Society of New South Wales.

"the Commissioner" means the Legal Services Commissioner of New South Wales.

"the Act’ means the Legal Profession Act 1987.

A. In the matter of Diversi

1. By letter dated 23 September 2005 the Commissioner referred to the Society for investigation a complaint by Ms Diversi ["the first complaint"] against the Solicitor.

2. Under cover of the Society’s letter of 14 October 2005, the first complaint was referred to the Solicitor for response. There was no response from the Solicitor.

3. A reminder letter dated 18 November 2005 was forwarded to the Solicitor.

4. By letter dated 21 December 2005 the Solicitor wrote to the Society.

5. By letter dated 24 January 2006 the Solicitor was asked to address the issues in the first complaint.

6. By letter dated 23 February 2006 the Solicitor was advised that, absent his response to the first complaint, the Committee would be asked to issue a Notice pursuant to section 152 of the Act. The relevant text of the proposed Notice was provided to the Solicitor.

7. On 2 March 2006 the Committee resolved to issue to the Solicitor a Notice pursuant to the provisions of section 152 of the Act ["the first Notice"].

8. On 17 March 2006 the Solicitor was personally served with the first Notice.

9. The first Notice required the Solicitor’s compliance within 21 days of service [by 7 April 2006].

10. The Solicitor has not complied with the requirements of the first Notice.

B. In the matter of Harvey

1. By letter dated 23 July 2004 the Commissioner referred to the Society complaints by, in part, Mr Joseph Harvey ["the second complaint"] against the Solicitor.

2. The second complaint was referred to the Solicitor by letter dated 6 October 2004.That letter was returned to the Society on 24 December 2004 marked "Unclaimed".

3. By letter dated 5 January 2005 the letter of 6 October 2004 was forwarded to the Solicitor at his then professional address. No response was received from the Solicitor.

4. A reminder letter dated 12 April 2005 was forwarded to the Solicitor. There was no response from the Solicitor.

5. On 8 & 9 September 2005 the Solicitor had telephone conversations with Mrs Mary Young of the Society ["Mrs Young"].

6. By letter dated 14 September 2005 the Solicitor was again asked for his response to the complaint. There was no response from the Solicitor.

7. On 30 November 2005, in a telephone conversation with Mrs Young, the Solicitor was reminded that he had not responded to the complaint and that, failing receipt of such, the Committee would be requested to issue a Notice pursuant to section 152 of the Act.

8. A reminder letter dated 6 December 2005 was forwarded to the Solicitor. There was no response from the Solicitor.

9. A reminder letter dated 27 January 2006 was forwarded to the Solicitor. There was no response from the Solicitor.

10. By letter dated 10 March 2006 the Solicitor was advised that absent his response to the complaint, the Committee would be asked to issue a Notice pursuant to section 152 of the Act. The relevant text of the proposed Notice was provided to the Solicitor.

11. On 16 March 2006 the Committee resolved to issue to the Solicitor a Notice pursuant to the provisions of section 152 of the Legal Profession Act, 1987 ["the second Notice"].

12. On 26 May 2006 the Solicitor was personally served with the second Notice.

13. The second Notice required the Solicitor’s compliance within 21 days of service [by 16 June 2006].

14. The Solicitor has not complied with the requirements of the second Notice.

C. In the matter of Helou

1. By letter dated 23 July 2004 the Commissioner referred to the Society complaints by, in part, Mr Mohammed Helou ["the third complaint"] against the Solicitor.

2. The third complaint was referred to the Solicitor by letter dated 6 October 2004 and which letter was forwarded by registered post. That letter was returned to the Society on 24 December 2004 marked "Unclaimed".

3. By letter dated 5 January 2005 the letter of 6 October 2004 was forwarded to the Solicitor at his professional address. No response was received from the Solicitor.

4. A reminder letter dated 12 April 2005 was forwarded to the Solicitor. There was no response from the Solicitor.

5. On 8 and 9 September 2005 the Solicitor had telephone conversations with Mrs Mary Young of the Society ["Mrs Young"].

6. By letter dated 20 September 2005 further material in relation to the third complaint was forwarded to the Solicitor.

7. By letter dated 21 September 2005 the Solicitor was, in part, again asked for his response to the third complaint. There was no response from the Solicitor.

8. On 30 November 2005, in a telephone conversation with Mrs Young, the Solicitor was reminded that he had not responded to the complaint and that, failing receipt of such, the Committee would be requested to issue a Notice pursuant to section 152 of the Act.

9. A reminder letter dated 8 December 2005 was forwarded to the Solicitor. There was no response from the Solicitor.

10. A reminder letter dated 27 January 2006 was forwarded to the Solicitor. There was no response from the Solicitor.

11. By letter dated 10 March 2006 the Solicitor was advised that absent his response to the third complaint, the Committee would be asked to issue a Notice pursuant to section 152 of the Act. The relevant text of the proposed Notice was provided to the Solicitor.

12. On 18 May 2006 the Committee resolved to issue to the Solicitor a Notice pursuant to the provisions of section 152 of the Act ["the third Notice"].

13. On 26 May the Solicitor was personally served with the third Notice.

14. The third Notice required the Solicitor’s compliance within 21 days of service [by 16 June 2006].

15. The Solicitor has not complied with the requirements of the third Notice.

3 The Solicitor applied to have the second allegation of failing to assist the Society in the investigation of a complaint struck out. The hearing proceeded with the consent of the parties on the basis that the Tribunal would hear all the evidence and submissions and determine the Solicitor’s application as part of the Decision on the basis that if the Application succeeded the second allegation would be struck out and the Society would not be called upon to elect one allegation as opposed to the other. The Application is dealt with below.

4 The Society relied upon the Affidavit of Raymond John Collins sworn on 11 January 2007, three Affidavits of Geoffrey David Edwards the first of which was sworn on 17th March 2006 with the remaining two sworn on 26th May 2006 and the Affidavit of Andrew Stuart Brown sworn 6th August 2007. Mr Brown’s Affidavit was in response to the Solicitor’s Affidavit and he was the only one of these deponents who was called for cross-examination. The affidavits of Mr Edwards deposed to the service on the Solicitor of three individual notices issued pursuant to section 152 of the Legal Profession Act 1987. In each affidavit Mr Edwards deposed to service of one such notice on the actual day of swearing the Affidavit.

5 The Solicitor relied upon his Affidavit sworn on 17th April 2007 and he was cross-examined on that Affidavit.

6 Mr Collins set out in his Affidavit inter alia the procedural and evidentiary matters relating to the allegations. In relation to the first allegation his evidence coupled with the evidence of service and the admissions of the Solicitor satisfy the Tribunal that the Solicitor failed without reasonable cause to comply with the three separate notices served on him pursuant to the terms of section 152 of the Legal Profession Act 1987.

7 In view of the findings of the Tribunal on the second allegation of professional misconduct (failure to assist the Law Society in the investigation of a complaint) the Tribunal has found it appropriate to deal initially with the first allegation in full including the findings and orders arising from that allegation which is of professional misconduct expressly defined by statute.

8 The Solicitor provided to the Society three Statutory Declarations declared on 17th July 2007 in response to the three separate Section 152 notices ( Diversi, Helou and Harvey).He concluded his Affidavit in the following terms:

"82 I now realise that, at the very least, I should have provided a declaration to the Society advising that in the absence of the files which the Society has, or had previously held, I could not provide full and meaningful answers.

83 I now realise also that I have dealt with the matter very badly, and have reacted to the events which occurred, and the dilemma which I saw, in a manner which was not sensible, nor in my interests, and failed to satisfy my obligations to my professional regulator."

9 The Society’s approach at the hearing was that the notices "have been responded ... and it is not our submission that as in each of the particulars the notice remains outstanding. ... So we accept that it is a closed period application as it were" (all at T2).

10 In response to a question about his failure to respond to "the complaint" the Solicitor listed in a long answer a number of matters which, while not excusing his conduct, in fact raised matters which were in effect in mitigation of his failure to comply with the section 152 notices and the Tribunal has taken these into account in determining the appropriate consequences of its finding on the first allegation of professional misconduct.

11 The Solicitor at T56 was asked:

Q. What stopped you from doing so, from responding or even saying " I can’t respond"?

A. It was a whole range of things that were happening to me at the time, starting from losing my practice, not being able ... It was a whole range of things that had gone wrong from the minute Andrew Brown walked in as a manager starting from being excluded from my office for 2 and a half months, all the files being given away so I couldn’t recover any of the fees that were owing to me".

12 The Solicitor’s following evidence in answer to the question quoted may be summarised as follows:

All of his files being simply given away to his clients or their new solicitors.

Not being given an opportunity to play any role in contacting his clients or arranging the orderly transfer of their files to new solicitors.

No arrangements being made for recovery of fees that were owing to him, nor for the recovery in three instances of fees owing to barristers, or for payment of the office rent or his secretary’s wages

The inability to service the practice overdraft secured by mortgage on his home.

Having to try twice to refinance his mortgage to try to save his home.

Having to leave his home for two and a half weeks when foreclosure threatened.

Selling his home to avoid foreclosure at an estimated loss of $120,000 to $160,000 leaving him with no proceeds and debts of about $100,000.

Having to defend an application by his sister to be appointed his financial manager in the Guardianship Tribunal.

Living in modest rented accommodation with difficulty in paying rent, defending eviction proceedings four times and having to move three times

13 The Solicitor sought an extension of time until 16th July 2004 to lodge an accountant’s certificate for his Trust Account in support of his application to renew his Practicing Certificate for the year 2004/2005. The evidence before the Tribunal is that this request was made a number of times in June 2004 or early July 2004 and was refused on the basis that the Society did not have the power to grant an extension.

14 Mr Brown’s notice to the Solicitor sent by fax on the evening of 15th July 2004 advised the solicitor of Mr Brown’s appointment as Manager under section 114B of the Legal Profession Act 1987. The notice advised that unless he was shown very good reasons to the contrary Mr Brown would be closing the practice down and terminating the employment of the staff of the practice. The Solicitor was also advised in the notice that he would be excluded from the practice effectively following the Manager taking over which occurred the next morning.

15 The Tribunal is satisfied on the evidence given by the Solicitor which was not challenged by the Society that the Appointment under section 114B was by reason of its forming an opinion of the kind referred to in section 92(2)(vii) that is his ceasing to hold a Practicing Certificate.

16 The Tribunal finds that the breach of section 152 is established and that the failure to comply was without reasonable cause. Accordingly the complaint of professional misconduct on the first allegation relating to the three notices is made out. This constitutes professional misconduct pursuant to section 152 of the Legal Profession Act 1987.

17 Both the Solicitor and the Society have submitted that the proper outcome is that the Solicitor should be reprimanded and pay the costs of the Society. The Tribunal notes the order consented to and/or the undertaking offered by the Solicitor is set out in paragraph IV of his amended reply. The Tribunal finds that the wording proposed as an undertaking is not in its view suitable to be noted but finds that an Order adopting the conditions proposed is appropriate when expressed as follows:

"That in the event of the Solicitor applying for a Practicing Certificate that it shall be a condition of the issue of such Practicing Certificate that the Solicitor satisfactorily complete all four modules of the Risk Management Course provided by LawCover within one year of being issued with a Practicing Certificate".

18 The duty of the Tribunal is protective not punitive. It has taken into account the matters already referred to and finds that a public reprimand, a costs order and an order in terms of Paragraph 16 hereof together protect the public and the Solicitor as well as providing a sufficient warning to the profession of the importance of co-operation with the professional regulators as instanced by the obligation to comply promptly with a notice from a regulator.

19 The second allegation against the Solicitor was of professional misconduct arising out of the Society’s assertion that he had failed to assist the Law Society in the investigation of a complaint. Five days before the hearing date the Solicitor filed submissions in support of an application to strike out the second allegation on the basis of duplicity/uncertainty. The Society filed submissions in response and the matter was argued on the hearing day. The Tribunal taking into account the case law relied upon by the parties it formed the view that the matter would need to be adjourned until a later date so that the application could be determined. Ultimately it was agreed that if it found in favour of the Solicitor it would not put the Society to an Election in the manner detailed but would rather strike out the second allegation and deal only with the first allegation. On this basis the hearing proceeded with the Tribunal left to determine the application when giving its reasons for decision.

20 The Solicitor’s written submissions asserted that "the two heads of professional misconduct alleged relying on identical facts, are materially indistinguishable ...". In view of the agreement on election already referred to the consequence sought was in effect in terms that the second allegation should be dismissed "as bad in law duplicity and/or uncertainty". The Solicitor referred us to Archbold and a number of cases including Walsh v Tattersall [1996] HCA 26; (1966) 70 ALJR 884, Johnson v Needham (1909) 1 KBD 626 and Johnson v Miller [1937] HCA 77; (1937) 59 CLR 467.

21 It was contended that there are two different facets to the application of the rule against duplicity. The first is where it is sought to roll up in a "one charge or allegation compendiously a series of acts over time which the relevant legislation makes specifically the subject of a statutory offense in respect of each identifiable discrete act ... An alternate form of duplicity which offends the proscription arises if a person is charged with more than one offense deriving from the same set of facts".

22 In relation to the first contention one very succinct supporting statement was made by Kirby J in Walsh v Tattersall (supra) at 891 where His Honour said: No count in any indictment, presentment, information or complaint might charge a person with the commission of more than one offence".

23 In relation to the alternate form of duplicity the Tribunal is greatly assisted by the following excerpt from the decision of Dixon J (as he then was ) in Johnson v Miller (supra) at 489: "Where an information or complaint is so drawn as to disclose more than one offence and one set of facts amounts to each of the various offenses covered by the charge , as was the case in Johnson v Needham, the proper course is to put the complainant to his election. In such a case, to wait to the end of his evidence before doing so may be convenient and may cause no injustice".

24 In its submissions in relation to the two allegations the Society relied initially upon the decisions of the Tribunal in NSW Bar Association v Howen [2003] NSWADT 117 and NSW Bar Association v Howen (No 2) [2003] NSWADT 235. The Tribunal sees the issue in the first decision as one relating to the validity of a particular Section 152 notice while the paragraph quoted from the second decision stresses the importance of a Section 152 notice as a tool of investigation and the effect of a practitioner’s failure to comply. Neither of the decisions assist the Tribunal in resolving the Solicitor’s application.

25 The Society also placed reliance on the Tribunal’s decision in Law Society v Knudson [2006] NSWADT 49 where complaints of failure to comply with a section 152 notice and failure to assist the Society in the course of its investigations were both alleged. In Knudson the Tribunal found the allegations in relation to the section 152 notice established but found that the conduct complained of did not amount to professional misconduct when applying the test in Allinson v General Council of Medical Education and Registration [1894] 1 QB 750 in that the conduct did not amount to disgraceful and dishonourable behaviour within the Allinson test. The Tribunal did express the view at 65 "We do not think that the existence of section 152(1)(c) and section 152(4) renders it impossible for a practitioner to be found guilty of professional misconduct at common law on account of failure to assist in the investigation of a complaint". The particulars of the facts giving rise to the "failure to assist" allegation are not incorporated in the decision and it is apparent that the issue of duplicity of pleading was not argued. There is no reference to any of the relevant authorities on duplicity in the Knudson decision and the Tribunal does not find Knudson of assistance in dealing with the application of the Solicitor.

26 The Society also referred to a passage from the decision of Smart J in Veghelyi v Law Society of New South Wales, unreported, Supreme Court of New South Wales 6 September 1989 where His Honour stressed the importance of a practitioner replying promptly to complaints made in a full and complete manner. This was considered by the Tribunal in Knudson (Supra) on the issue of the Allinson test. The Tribunal does not find it of assistance in resolving the issue of duplicity of pleading raised by the Solicitor’s application.

27 Reference was also made by the Society to Walsh v Tattersall (Supra) and its submissions quote parts of the separate reasons given by Dixon J and Kirby J. The Tribunal finds that the statements it has quoted above from this decision are most relevant to the issue in the application before it and relies upon those statements.

28 Finally in its written submissions the Society referred to this Tribunal’s decision in Law Society of New South Wales v Vardas [2006] NSWADT 118. In that matter numerous instances of professional misconduct were found against the Solicitor including breaches of sections 61 and 62 of the Legal Profession Act 1987, wilful misappropriation of trust moneys, forgery and misleading a Trust Account inspector. The particulars are lengthy and the issue of duplicity of pleading was not argued or referred to in the decision The Tribunal does not find Vardos of assistance in determining the duplicity issue.

29 On 30 August 2007 the Society advised the Solicitor that all of the particulars provided in the Originating Application which are set out above in paragraph 2 applied to the second allegation and in relation to the three section 152 notices particulars 7 – 10 applied to the Diversi notice, particulars 11-14 applied to the Harvey notice and particulars 12-15 applied to the Helou notice.

30 The Tribunal has noted that the particulars relied upon to establish the first allegation are subsequently relied upon to establish the second allegation. The Tribunal has formed the view that in view of the reliance on common particulars to establish two separate allegations one of the two allegations is duplicitous and must fail. It is accepted that the particulars relied upon are not all the same in relation to each allegation. However the Tribunal finds that the overlap of particulars as relied upon by the Society is such that only one of the allegations can properly be allowed to stand for determination. In view of the agreement reached at the hearing the second allegation accordingly fails and is dismissed.

31 In the event that the Tribunal is in error in its finding on duplicity then it would remain for the Tribunal to determine whether the conduct particularized and established in support of the second allegation amounted to professional misconduct at common law. There is a clear failure by the Solicitor to meet proper professional standards in his communications with the Society over these matters. The Tribunal has had regard to the evidence of the Solicitor detailed above in paragraphs 10 to 15 inclusive and finds that it is not comfortably satisfied that the Allinson test has been satisfied in all the circumstances. Accordingly the Tribunal finds that had the second allegation been allowed to stand for determination in this matter that the Tribunal is not satisfied that professional misconduct at common law has been established and so would have dismissed the second allegation.

32 The orders referred to in paragraph 17 of this decision include a public reprimand. In view of section 562 of the Legal Profession Act 2004 the Tribunal directs the Registry to provide the Legal Services Commissioner with sufficient information to enable the Commissioner to exercise his powers and functions in respect of the Register of Disciplinary Action required to be kept under Part 4.10 of the Legal Profession Act 2004.