Council Of the Law Society Of the Act v Giles & Anor (Occupational Discipline)

[2014] ACAT 30

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

COUNCIL OF THE LAW SOCIETY OF THE ACT v GILES & ANOR (Occupational Discipline) [2014] ACAT 30

OR 31 of 2013

Catchwords:             OCCUPATIONAL DISCIPLINE – LEGAL PRACTITIONER – professional misconduct on the part of second respondent (employee) - consent decision pursuant to section 55 of the ACT Civil and Administrative Tribunal Act 2008 – employee remuneration to second respondent by way of fixed percentage of legal costs that the employee brought into the law practice – level of supervision of work needed – direct payment of employee: share of costs from trust – responsibility in relation to trust account –– penalty on second respondent: public reprimand, fine and order to undertake completion of an approved course in trust accounting – costs order against second respondent

Legislation:ACT Civil and Administrative Tribunal Act 2008, s 55

Tribunal:                  Mr C.G Chenoweth - Senior Member

Date of Orders:  27 March 2014  
Date Publication of Reasons for Decision:             13 May 2014

AUSTRALIAN CAPITAL TERRITORY              )
CIVIL AND ADMINISTRATIVE TRIBUNAL     )          NO:     OR 13/31

RE:COUNCIL OF THE LAW SOCIETY OF THE ACT

Applicant

AND:MR MARK TIIRIKAINEN

First Respondent

AND:MR CHARLES FILGATE GILES

Second Respondent

ORDERS

Tribunal        :          Mr C.G Chenoweth - Senior Member
           Date of Order:          27 March 2014

CONSENT DECISION PURSUANT TO SECTION 55 OF THE
ACT CIVIL AND ADMINISTRATIVE TRIBUNAL ACT 2008 (ACT)

To the extent that the proceedings concern the second respondent, Mr Charles Filgate Giles, the Tribunal finds that:

1.The second respondent is guilty of professional misconduct with respect to the matters charged in paragraph 2.3 of the Amended Application for Disciplinary Action filed on 20 February 2014 in this matter (“Application”).

2.The second respondent is guilty of professional misconduct with respect to the matters charged in Ground 9 of the Application, as well as the following further matters, which the tribunal notes were voluntarily disclosed by the second respondent:

(a)the charges to the clients [names redacted] referred to in paragraph 4(g) of the second respondent’s position paper dated 14 February 2014 (copies of which redacted invoices are annexed to these Orders and marked “1”);

(b)a further charge to a client [name redacted], in the amount of approximately twelve hundred dollars ($1,200).

The tribunal orders that:

1.The second respondent is publicly reprimanded.

2.The second respondent is ordered to pay a fine to the applicant in the sum of $3,000.00 payable within three (3) months of the date of these orders.

3.The second respondent undertakes to the tribunal that he will not press, and will wholly waive, any claim for payment for invoices the subject of paragraph 2 above, with respect to [name redacted], with respect to both the complainant in these proceedings, [name redacted], and also each and all of the clients listed in paragraph 2 above. The second respondent will fully credit [name redacted] with payments that he has made with respect to the applicable invoice so that those payments will be treated by the second respondent as a payment on account of costs directly owing to the second respondent.

4.The second respondent must undertake at his own expense and satisfactorily complete the next available approved course in Trust Accounting at the Australian National University Legal Workshop, and must provide the Law Society on request with reasonable evidence of having done so, within ten (10) days of having completed the course.

5.The second respondent must pay 50% of the applicant’s costs of these proceedings, on a party/party basis at the Supreme Court scale, in an amount to be agreed or failing agreement, to be assessed by the Tribunal.

6.The application against the Second Respondent be otherwise dismissed.

…………………………………….

Mr C.G Chenoweth

Senior Member

“1”       F

INVOICE

31 March 2012

S & T Lawyers
GPO Box 1853
Canberra City 2601

Business services rendered as per time sheets
20.58 hours @ $200.00 per hour  $ 4,116.00
GST  $    411.60

Total due and payable  $ 4,527.60

Direct Deposit

STATEMENT OF ACCOUNT

14 June 2012

Business services billed as per time sheets
From 29 March 2012 to 12 June 2006

43.42 hours @ $200.00 per hour  $8,684.00

GST  $   868.40

Total due and payable  $9,552.40

STATEMENT OF ACCOUNT

9 August 2012

S & T Lawyers
GPO Box 1853
Canberra City 2601

Collation of document, researching, and collation as per time sheets

12.67 hours @ $200.00 per hour  $2,534.00

GST  $   253.40

Total due and payable  $2,787.40

With thanks

STATEMENT OF ACCOUNT

21 February 2012

S & T Lawyers
GPO Box 1853
Canberra City 2601

Schedules, Chronologies for Court, conferences with Counsel, and client ……
Attendance and compiling of Affidavit and other court documents. Attendance at Court 5 days, research and further financial chronologies.

August 2011

31 and 29  11.17

September 2011        

2, 4, 5, 6, 7, 15, 16, 17, 18, 19, 20, 21, 22, 28, 29  36.68

Total hours as per time sheets  47.85 hours

$9,460.00

GST  $   946.00

$10,406.00

STATEMENT OF ACCOUNT

7 March 2012

S & T Lawyers
GPO Box 1853
Canberra City 2601

8.2.2012                   Attendance at video conference reviewing of audio
  Transcripts, re assessment of further action re
  abandonment as per time sheets attached  5.25 hours

16 and 19 2.2012
  Review of written transcripts as per times sheets
  As per time sheets attached  3.5 hours

Total hours as per time sheets  8.75 hours

8.75 hours @ $200/hour  $1,750.00

GST  $  175.00

Total due and payable  $1,925.00

EDITED EX TEMPORE REASONS

1.The ACT Civil and Administrative Tribunal has been sitting today in matter number OR13/31, which is an application brought by the Council of the Law Society of the ACT in relation to two Legal Practitioners. Up until now, we have been sitting in a section 33 conference, which is a confidential conference, however, the matters have been resolved by agreement between the parties subject to those agreements being put to the tribunal for consideration under section 55 of the ACT Civil and Administrative Tribunal Act 2008.

2.Having considered the material that has been filed in this application and the terms of agreement that have been submitted I have determined that the proposed orders are appropriate for the tribunal to make under section 55(1)(c) and I make the orders accordingly.

3.I indicated to the parties that I thought it was appropriate to make some comments about this matter, particularly as part of the tribunal’s role is to enable the community to be satisfied that the tribunal is, through its proceedings, protecting the public and enforcing appropriate professional standards. Comment should also be made for the guidance of other practitioners that they may be aware of the unfortunate circumstances that have arisen in this matter.

1. The issues in this case arose originally from the employment of a practitioner of longstanding and experience, on a basis that he be remunerated by payment of a fixed percentage of the costs that he brought into his employer’s practice.  There are dangers and difficulties in adopting this practice. 

2. I am certainly not against remunerating employees appropriately where they work hard and develop a practice for the benefit of their employer.  However, operating on the basis of a fixed percentage remuneration gives the employee an inducement to generate as much work as possible, whatever the quality and whatever prospects, when the employer is ultimately responsible for any problems that arise. To engage in such a practice requires very detailed supervision and control of work that is taken into the practice.  That does not appear to have happened in this case.  It may be that the employer practitioner considered that the employee didn't require much supervision unless requested, but that doesn't remove from him the responsibility to supervise all aspects of the practice.

   6.The second issue about which I want to make comment relates to the way in which the employee was paid his agreed share of the costs by direct payment from the trust account.  Notwithstanding the able submissions of counsel for Mr Giles, in my view that is an unsatisfactory practice.  It brings into play issues of mingling the practitioner's own money with that of the client's, particularly bearing in mind that the liability of the employer is a personal liability of himself to the employee.  It is most unsatisfactory to attempt to discharge that liability by payment out of moneys in the trust account, even in circumstances in which the employer considers that he has an entitlement to those moneys.  In my view, the proper course is to bring those moneys back into the general account and then disburse payment to the employee in the same way as to any other creditor of the practice.

   7.The outcome of these matters, and it would appear the lack of strict supervision in the earlier days by the employer over the trust account affairs, has brought this unfortunate situation about.  I note that a previous partner of the employer had the principal responsibility for administration of the trust account, but that cannot overcome the obligation of every partner to be responsible for the conduct of the trust account. If a fellow partner fails in some way that does not remove responsibility from the ongoing partner.

   8.Having said that, I acknowledge that the agreed terms, which I have approved, impose a substantial penalty on the employer in terms of suspension from the practice. That is regrettable for a practitioner who has been of longstanding in this town.