Legal Services Commissioner v Pennisi (No 2)
[2017] QCAT 160
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- Unreported Judgment
- Legal Services Commissioner v Pennisi (No 2)[2017] QCAT 160
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Legal Services Commissioner v Pennisi (No 2)[2017] QCAT 160
Legal Services Commissioner v Pennisi (No 2)[2017] QCAT 160
CITATION: | Legal Services Commissioner v Pennisi (No 2) [2017] QCAT 160 |
PARTIES: | Legal Services Commissioner (Applicant) v Vincent Pennisi (Respondent) |
APPLICATION NUMBER: | OCR067-16 |
MATTER TYPE: | Occupational regulation matters |
HEARING DATE: | On the papers |
HEARD AT: | Brisbane |
DECISION OF: | Justice DG Thomas, President Assisted by: Ms Julie Cameron, legal panel member Dr Margaret Steinberg, lay panel member |
DELIVERED ON: | 29 May 2017 |
DELIVERED AT: | Brisbane |
ORDERS MADE: |
|
CATCHWORDS: | PROFESSIONS AND TRADES – LAWYERS – COMPLAINTS AND DISCIPLINE – DISCIPLINARY PROCEEDINGS – UNSATISFACTORY PROFESSIONAL CONDUCT – where respondent acted contrary to instructions provided by client – where respondent failed to act with competence and diligence in providing full advice to client as to the matter – where respondent failed to provide the client with the client’s files despite request made – where respondent’s conduct involved isolated failures over a short period of time – where respondent repaid monies to client in accordance with settlement deed entered into – whether conduct fell short of standard of competence and diligence expected – whether conduct unsatisfactory professional conduct or professional misconduct – whether public reprimand and pecuniary fine an appropriate sanction COSTS – ASSESSMENT OF COSTS – where respondent accepted that he must pay applicant’s costs – where respondent asserts costs should be in fixed amount – whether costs should be fixed or assessed – whether adequate basis provided for Tribunal to derive a figure to fix costs Legal Profession Act 2007 (Qld) ss 418, 419, 456, 462, 598 Queensland Civil and Administrative Tribunal Act 2009 (Qld) ss 32, 107 Queensland Civil and Administrative Tribunal Rules 2009 (Qld) r 87 Attorney-General v Bax [1999] 2 Qd R 9 Legal Services Commissioner v Madden (No 2) [2009] 1 Qd R 149 Legal Services Commissioner v Pennisi [2017] QCAT 126 Legal Services Commissioner v Puryer (No 2) [2013] QCAT 407 |
APPEARANCES: |
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’).
REASONS FOR DECISION
- [1]The Legal Services Commissioner brings the following charges against Mr Pennisi:
Charge 1 – Acting contrary to instructions
Between 6 May 2014 and 12 October 2014, Mr Pennisi acted contrary to his client’s instructions in selling shares forming part of the estate of Mr Raymond Henry Lingard.
Charge 2 – Failing to act with competence and diligence
Between 6 May 2014 and 12 October 2014, in his management of the matter, Mr Pennisi’s conduct fell short of the standard of competence and diligence that a member of the public is entitled to expect; or in the alternative, Mr Pennisi’s conduct involved a substantial failure to reach or keep a reasonable standard of competence and diligence.
Charge 3 – Failing to provide documents on a request
Between 3 November 2014 and 3 may 2015, Mr Pennisi failed or refused to provide documents to which his client was entitled, despite a request for the same.
Background
- [2]The parties have filed an agreed statement of facts, dated 20 December 2016.
- [3]From the agreed statement of facts, the Tribunal finds as follows (in paragraphs 4 to 14).
Charge 1
- [4]Mrs Lingard retained Mr Pennisi to act on her behalf in her capacity as sole executor of the estate of the late Mr Raymond Henry Lingard. Mr Pennisi was also retained to act in relation to the management of the estate.
- [5]On or about 6 May 2014, a letter containing instructions was provided to Mr Pennisi. The letter instructed Mr Pennisi to “investigate the share portfolio and transfer the ownership to Mrs Lingard”.[1]
- [6]On the same day, Mr Pennisi made a file note of his discussions in which he noted, amongst other things, “VP to do change in the title (joint) shares (JBWere)”.[2]
- [7]Contrary to the instructions, Mr Pennisi:
- communicated with JBWere;
- prepared forms necessary to sell the shares;
- arranged for those forms to be executed by Mrs Lingard;
- forwarded the forms to JBWere;
- arranged for the shares to be sold; and
- received the share sale proceeds into his trust account.[3]
- [8]On 19 May 2015, Mr Pennisi entered into a deed with Mrs Lingard and Lexon Insurance Pte Ltd (“the settlement deed”) to provide compensation to Mrs Lingard for selling the shares he was instructed to arrange to be transferred to Mrs Lingard. Mr Pennisi “paid the sum of $13,500 as required by clause 1.1b of the deed. Lexon paid the amount referred to in clause 1.1a of the deed”.[4]
Charge 2
- [9]Whilst acting for Mrs Lingard, Mr Pennisi did not:
- Have regard to the instructions provided to him in writing and confirmed by his file note;
- Explain to Mrs Lingard that he was arranging for the shares to be sold;
- Explain the nature and effect of the shares sale forms;
- Advise Mrs Lingard of the nature and effect of the transaction she was entering into by signing those share sale forms;
- Advise Mrs Lingard of the likely effect of that transaction on her entitlement as a beneficiary of the estate; or
- Advise Mrs Lingard of the tax (including capital gains tax) implications of the transaction.[5]
- [10]Mrs Lingard was compensated for consequences of those matters by the settlement reflected in the settlement deed.
Charge 3
- [11]By 13 October 2014, Mr Pennisi’s retainer had come to an end.
- [12]By letter dated 3 November 2014, Cornford-Scott Lawyers were retained by Mrs Lingard. Cornford-Scott Lawyers wrote to Mr Pennisi requesting, amongst other things, that he deliver “all documents you hold on Mrs Lingard’s behalf and in relation to her late husband’s estate”.[6]
- [13]In that respect, Cornford-Scott Lawyers provided the necessary written authority.[7]
- [14]Mr Pennisi did not provide the requested documents until 13 May 2015.[8]
Conduct
- [15]Unsatisfactory professional conduct includes conduct of an Australian legal practitioner happening 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.[9]
- [16]Professional misconduct includes unsatisfactory professional conduct if the conduct involves a substantial or consistent failure to reach or keep a reasonable standard of competence and diligence.[10]
- [17]An Australian legal practitioner must follow instructions given by a client. In this case, the instructions were provided in writing and were easily able to be acted upon and completed. The failure to act upon instructions falls below the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competence Australian legal practitioner.
- [18]It is the duty of a legal practitioner to provide relevant advice to the client and, where necessary in that context, to explain to the client the meaning and effect of documentation being executed by the client. In this case, Mr Pennisi did not provide advice regarding the documents which he prepared for his client to execute. This failure falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonable competent Australian legal practitioner.
- [19]A legal practitioner is also under a duty, within a reasonable time, to provide a client’s documents to the client or former client when so requested. In this case, Mr Pennisi did not provide client documents to his former client within a reasonable time-frame. This failure falls short of the standard of diligence that a member of the public is entitled to expect of a reasonably competent Australian legal practitioner.
- [20]The failures identified in the disciplinary application are isolated failures over a relatively short time frame and do not amount to substantial or consistent failures. They do not fall within the definition of “professional misconduct” as that term is used in section 419 of the Legal Profession Act 2007 (Qld) (‘LPA’).
- [21]The Tribunal finds that Mr Pennisi’s conduct was unsatisfactory professional conduct. The Tribunal notes that, at an early stage, Mr Pennisi admitted the facts alleged in the disciplinary application as well as that his conduct fell short of the required standard and also that his conduct should appropriately be treated as unsatisfactory professional conduct.
Sanction
- [22]Upon a finding of unsatisfactory professional conduct, the Tribunal may make any order it thinks fit including any one or more of the orders set out in section 456 LPA.
- [23]When considering the appropriate sanctions, it is well established that the Tribunal is primarily concerned with the need to protect the public,[11] and maintenance of proper professional standards.[12] The aim is not to punish the practitioner. In the context of protection of the public, principles of general and personal deterrence are relevant. In other words, one of the aims of imposing a sanction is to discourage other practitioners from being involved in similar unsatisfactory conduct.[13]
- [24]The Legal Services Commissioner submits that appropriate orders are the imposition of:
- A public reprimand; and
- A fine in the range of $1,000 - $2,500.
- [25]The respondent accepts that he should be publicly reprimanded but submits that no pecuniary fine should be imposed.
- [26]The respondent submits that the public reprimand is, itself, a substantial penalty and serves to mark the Tribunal’s public condemnation of the conduct of the practitioner as inappropriate, thus serving the purposes of the disciplinary proceedings and the Tribunal’s orders.[14]
- [27]The respondent also submits that the public reprimand is a statement to the profession at large that the relevant conduct is unacceptable and serves the purpose of general deterrence in a significant way.[15]
- [28]As to the question of whether a fine should additionally be imposed, the respondent submits that such an order would serve only to punish him and would serve no proper purpose of the proceeding or the Tribunal’s orders.[16]
- [29]The respondent points to the fact that, as the agreed statement of facts reveals, the respondent has “already voluntarily paid the sum of $13,350 pursuant to the deed referred to in paragraph 10 of the agreed statement of facts and annexed to them as annexure 6.”
- [30]The respondent submits that the combination of a public reprimand and his voluntary payment of $13,350 to compensate his former client for the consequence of his conduct amply serves the proper purposes of the proceedings and the orders which the Tribunal should make in them.[17]
- [31]The agreed statement of facts refers in paragraphs 10 and 12 to the settlement deed.
- [32]The settlement deed recites the allegations which were made by Mrs Lingard against Mr Pennisi and that the parties executed the settlement deed to settle those claims.[18]
- [33]The settlement deed records the sum paid by Mr Pennisi as $13,350. The settlement deed also records that, in consideration of payment of the settlement amount, Mrs Lingard releases, discharges and forever holds Mr Pennisi harmless for all claims which the claimant may have, or in the future make, against Mr Pennisi arising or in any way connected with the claims made by Mrs Lingard.[19]
- [34]The settlement deed continues that the settlement deed operates as an absolute bar to all present and future claims between Mrs Lingard and Mr Pennisi arising from or in any way connected with the claims made by Mrs Lingard.[20]
- [35]The monies paid seem, on the face of the settlement deed, clearly to relate to a liability which was being settled pursuant to the settlement deed. That conclusion flows from the terms of the deed.
- [36]The payment was “voluntary” only in the sense that no court order had been made compelling any payment to Mrs Lingard to compensate her for the loss she suffered. As was said in a letter from Bartley Cohen to the Legal Service Commission dated 27 May 2015, the agreement had been entered into “providing for Mrs Lingard to be compensated for the consequences of that error, that is, Mr Pennisi’s error.” It continues, “However, I think I am permitted to say that the agreement provides for Mrs Lingard to be appropriately compensated for the consequences of my client’s error, including (obviously) the CGT consequences of it.”[21]
- [37]A further advantage to Mr Pennisi in executing the settlement deed was identified in the confidentiality provision in clause 8, which obliged the parties not to make any comment to anyone or engage in any conduct likely to be derogatory or damage the reputation of the other party.
- [38]The Tribunal concludes that the asserted “voluntary” nature of the payment has little weight in consideration of the question of the penalty.
- [39]The fact that a sum of money was paid to settle the claim does go some way to deterring other practitioners from being involved in similar conduct.
- [40]However, in the circumstances, the Tribunal believes that the need to generally deter other practitioners from being involved in such conduct must be served by the imposition of a pecuniary fine. The Tribunal therefore orders that the practitioner pay a pecuniary fine in the sum of $1,000.
Costs
- [41]Upon a finding of unsatisfactory professional conduct, the Tribunal must make an order that the practitioner pay costs unless the Tribunal is satisfied that exceptional circumstances exist.
- [42]There has been some controversy over the question of costs. The Tribunal deals with this controversy in the reasons concerning the miscellaneous matters application made on 8 February 2017.[22]
- [43]There are two non-controversial submissions which touch upon the question of costs.
- [44]The submissions filed by the Commissioner on 20 January 2017 seek an order for costs to be assessed pursuant to section 462(5) LPA.[23]
- [45]The respondent accepts that he should pay the applicant’s costs.[24]
- [46]The respondent submits that the order sought by the Commissioner (that costs be assessed pursuant to section 462(5) LPA) is inconsistent with section 107 of the QCAT Act and is otherwise likely to lead to controversy and unnecessary costs being incurred on both sides.[25]
- [47]After describing the steps taken in the proceedings the respondent submits that the case is “the quintessential case for the costs to be fixed in accordance with section 107 of the QCAT”.[26] The respondent continues, “in previous cases like this one, costs have been fixed in amounts in the order of $1,500 and unless the applicant wishes to submit to the contrary, that is the appropriate order here.”[27]
- [48]The respondent provides no other information or detail.
- [49]Section 107 QCAT Act provides that “if the tribunal make a costs order under this Act or an enabling Act, the tribunal must fix the costs if possible.”
- [50]Section 107(2) continues that “If it is not possible to fix the costs having regard to the nature of the proceeding, the tribunal may make an order requiring that the costs be assessed under the rules.”
- [51]Section 462(5) LPA provides that:
An order for costs may be:
(a) for a stated amount; or
(b) for an unstated amount but must state the basis on which the amount must be decided.
- [52]In order to fix costs, it is necessary for there to be some basis upon which the Tribunal can derive the figure.
- [53]The respondent provides no more information than:
- The disciplinary application was filed in May 2016;
- The respondent filed his response, admitting the alleged conduct and that it fell short of the required standard;
- There was a compulsory conference, a statement of facts was agreed and the matter has proceeded otherwise on the basis of brief written submissions from both sides;
- In previous cases like this one, costs have been fixed in amounts of the order of $1,500.[28]
- [54]The detail provided by the respondent is not sufficient to enable a rational assessment of the appropriate level of costs. The reference to the unnamed previous cases provides no indication as to the work which was completed as compared with the current case or even whether the costs were fixed by the Tribunal based upon an assessment or an agreed figure.
- [55]Without a sensible basis upon which a figure might be determined, it is impossible for the Tribunal to fix the costs.
- [56]In those circumstances, the Tribunal may make an order requiring that the costs be assessed under the rules.[29]
- [57]At the hearing which took place on 11 April 2017, it was common ground between the parties that there was no agreement as to costs and the costs should therefore be assessed in accordance with the rules, as is contemplated by section 107(2) QCAT Act.
- [58]The position taken by the respondent was to note that the Commissioner was seeking an order for costs to be assessed and in response; the submission was “there’s no opposition to that. There never was. But assessed as the Act requires, by an assessor appointed under rule 85.” (the intended reference was to rule 87).
- [59]When, the order is for an unstated amount, (such as that, costs be assessed under the Queensland Civil and Administrative Tribunal Rules 2009 (Qld) (‘QCAT Rules’)) the order must state the basis on which the amount must be decided.[30]
- [60]The Tribunal must be constituted by a Judicial Member who is a Supreme Court Judge or a former Supreme Court Judge nominated by the President to constitute the Tribunal.[31]
- [61]Prior to the matters being heard before the Tribunal, they were heard by the Legal Practice Tribunal, again constituted by a Supreme Court Judge.
- [62]In the circumstances, it is appropriate that the assessment be undertaken on a standard basis as if the matter were conducted in the Supreme Court of Queensland. An order for assessment on that basis does not preclude the respondent making submissions in relation to the matters of controversy to which reference was made.
- [63]The Tribunal may make an order requiring that the costs be assessed under the Rules.[32]
- [64]Rule 87 QCAT Rules provides for how costs are to be assessed under section 107 of the QCAT Act if the Tribunal makes a costs order that requires the costs to be assessed under the Rules.
- [65]In those circumstances, the costs must be assessed by an assessor appointed by the Tribunal.[33]
- [66]It is a matter for the assessor to decide the procedure to be followed on the assessment of the costs. The assessment would necessarily include consideration and determination of matters such as those, to which reference has been made by the respondent.
- [67]The assessor is given wide powers and may decide to do any or all of the following:
- Hear the assessment in private;
- Carry out the assessment on the papers without an oral hearing;
- Not be bound by the laws of evidence or procedure applying to a proceedings in the Tribunal;
- Be informed of the facts in any way the assessor considers appropriate;
- Not make a record of the evidence given.
- [68]As was said by former President Alan Wilson J,[34] “the exercise of costs assessment should be undertaken with a high degree of independence by an experienced and registered costs assessor.”
- [69]Costs assessors are appointed under the Uniform Civil Procedure Rules 1999 (Qld) (‘UCPR’). Assessors appointed under Rule 743L of the UCPR and under Chapter 17A Part 5 of the UCPR, must have satisfied the Principal Registrar that they have the necessary experience and qualifications.
- [70]As the parties have been unable to agree costs and as it is not possible, because of the nature of the matter and the information currently available to the Tribunal, for the Tribunal to fix costs, the Tribunal will appoint an assessor pursuant to Rule 87 of the QCAT Rules.
- [71]Following a procedure similar to that adopted by Wilson J in Puryer, to assist the Tribunal to consider the identity of an appropriate assessor, the Tribunal will order that, the parties endeavour to agree the identity of a costs assessor (who is appointed under the UCPR and who is willing to accept the appointment) and by 9 June 2017, notify the Tribunal of the agreed costs assessor.
- [72]Following receipt of that notification, or if the parties are unable to agree on the name of a costs assessor, the Tribunal will, after 9 June 2017, appoint a costs assessor, pursuant to Rule 87, to assess the costs.
Footnotes
[1]Statement of Agreed Facts, 20 December 2016, annexure 1.
[2]Statement of Agreed Facts, 20 December 2016, annexure 2.
[3]Ibid, paragraph 9.
[4]Ibid, paragraph 10.
[5]Ibid, paragraph 11.
[6]Statement of Agreed Facts, 20 December 2016, paragraph 14.
[7]Ibid, paragraph 15.
[8]Ibid, paragraph 16.
[9]Legal Profession Act 2007 (Qld) (‘LPA’) s 418.
[10]LPA s 419(1)(a).
[11]Attorney-General v Bax [1999] 2 Qd R 9 at [21] per Pincus J.
[12]Legal Services Commissioner v Madden (No 2) [2009] 1 Qd R 149.
[13]Ibid.
[14]Respondent’s Submissions dated 30 January 2017, paragraph 3.
[15]Ibid.
[16]Respondent’s Submissions dated 30 January 2017, paragraph 3.
[17]Ibid, paragraph 6.
[18]Statement of Agreed Facts, 20 December 2016, annexure 6: Settlement Deed, recitals A and B.
[19]Ibid, annexure 6: Settlement Deed, paragraph 3 (containing subparagraphs 4.1, 4.1.1 and 4.1.2.).
[20]Ibid, annexure 6: Settlement Deed, paragraph 4.
[21]Respondent’s Submissions dated 30 January 2017, annexure 1: Letter from Bartley Cohen Law to Legal Services Commissioner dated 27 May 2015.
[22]Legal Services Commissioner v Pennisi [2017] QCAT 126.
[23]Applicant’s Submissions, filed 20 January 2017, paragraph 33.
[24]Respondent’s Submissions dated 30 January 2017, paragraph 2.
[25]Ibid, paragraph 7.
[26]Respondent’s Submissions dated 30 January 2017, paragraph 8.
[27]Ibid, paragraph 9.
[28]Ibid.
[29]QCAT Act s 107(2).
[30]LPA s 462(5).
[31]LPA s 598(1).
[32]QCAT Act s 107(2).
[33]QCAT Rules, r 87(2).
[34]Legal Services Commissioner v Puryer (No 2) [2013] QCAT 407 at [18].