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Hellfire Club
19 January, 2010  
Appeal court nixes tribunal's spank findings

Solicitor not guilty of professional misconduct only unsatisfactory conduct … Penalty halved … Basten calls for proper judges to preside over tribunal hearings into lawyer misconduct … Court of Appeal to the rescue


imageSydney solicitor Chang Yuan Xu has succeeded in his appeal against the Law Society of NSW with findings of professional misconduct being unanimously converted by the Court of Appeal to unsatisfactory professional conduct.

The original spanking was imposed by the Administrative Decisions Tribunal for sloppy conveyancing work.

The appeal judges (Tobias, Basten and Handley) also overturned the tribunal’s finding that Xu acted improperly when he held on to a client’s passport until all his fees were coughed-up.

John Basten appeared a little grumpy about the tribunal process – in particular that, “a legal practitioner can face loss of his or her professional status by the determination of a tribunal including only two practitioners (together with one or two lay members) and without a judicial member”.

Doctors, he said, are better “protected”:

“A greater level of protection is accorded medical practitioners whose names can be removed from the roll only by a tribunal presided over by a District Court judge.”

The Law Society had brought three charges of professional misconduct against Xu in the tribunal over events which occurred in 2003 and 2004. The first two charges related to a conveyance.

Xu had properly witnessed the signature of his client, Rong Zhang, on a contract to purchase a home unit in Mascot.

Zhang sat on the contract for a few days. Then he indicated that his wife, Ms Liu, would be buying the property with him.

Liu’s purported signature in Chinese had been added. Xu then exchanged contracts without witnessing Liu’s signature.

Liu subsequently wanted to repudiate the contract and get out of a loan agreement.

She claimed that her signature was a forgery, and her passport showed that she was not in Australia when she supposedly signed the contract.

The second charge related to a s.66W certificate for the same transaction.

The certificate waives the five days cooling-off period for residential property purchases.

The solicitor had signed and sent the certificate to the vendors with the space for the purchasers’ names left blank

Xu admitted that he had signed the certificate and said: “I careless. I did not read it. I did not check. It’s my mistake.”

In the third charge of professional misconduct, Xu had appeared for a Angie Ning at Burwood Local Court while Ms Ning was being held at Silverwater jail.

Ning terminated his retainer, but Xu witheld her passport from her new solicitors for about three weeks until his fees were paid.

The solicitor denied he had the intention of exercising a lien over the passport.

Ning complained to the Bureau de Spanque that she had to spend extra time in jail because the passport was required by her new solicitors for a bail application.

The tribunal thought that because the Passports Act said, “an Australian passport remains always the property of the Commonwealth”, it could not be the subject of a solicitor’s lien.

imageThe Court of Appeal had other ideas.

Possession of a chattel, Ken Handley (seen here) wrote, is a good title against anyone who does not have a better title. This meant that Xu had a “reasonable excuse” under the Passports Act.

Passport holders can, the appeal court said, entrust their passports to whomever they want – and solicitors can exercise liens over them until proper costs and disbursements are paid.

The only exception would be if the Commonwealth wanted the passport back.

The court noted that a solicitor might not be able to keep a passport in circumstances where it deprived an impecunious client of freedom of movement or where it was required by a court.

In any case, the appeal judges found that Ning’s bail application and time in jail was not actually affected by Xu holding onto the passport.

They did think the conveyance “incredibly sloppy [and] irresponsible”, but it fell short of amounting to professional misconduct.

The bar is set high for professional misconduct – it needs to involve a substantial or consistent failure to reach or maintain a reasonable standard of competence and diligence.

Unsatisfactory professional conduct is less onerous, amounting to conduct that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent legal practitioner.

The court substituted the lesser finding of unsatisfactory professional conduct and reduced the $3,000 penalty imposed by the tribunal (J. Greenwood, M. Riordan and E. Hayes) to $1,500.

Xu is also relieved of the burden of paying the Law Society’s costs.

Jonathan Gadir reporting