Terepo v Council of the Law Society of New South Wales

1. [1]

   THE COURT: In a judgment of 2 July 2018 the Occupational Division of the Civil and Administrative Tribunal of New South Wales (“the Tribunal”) found, on the application of the Council of the Law Society of New South Wales (“the Law Society”), that the present appellant, Ms Sesilia Terepo, a solicitor, was guilty of professional misconduct on three grounds and of unsatisfactory professional conduct on a fourth ground ([2018] NSWCATOD 106) (“the Stage 1 Decision”). In a further judgment of 26 April 2019 the Tribunal recommended that Ms Terepo’s name be removed from the Roll kept by the Supreme Court of New South Wales and the Australian Legal Profession Register, and that Ms Terepo pay the Law Society’s costs (Council of the Law Society of NSW v Terepo (No 2) [2019] NSWCATOD 60) (“the Stage 2 Decision”).

2. [2]

   The Law Society applied to this Court seeking that the Court implement the Law Society’s recommendation by removing Ms Terepo’s name from the Roll (see s 23(1) Legal Profession Uniform Law 2014 (NSW) (“the Uniform Law”)). Section 23 supplements the Court’s inherent jurisdiction (Council of the Law Society of New South Wales v Yoon [2020] NSWCA 141 at [18]).

3. [3]

   Subsequently Ms Terepo appealed to this Court, out of time, against the two decisions of the Tribunal. The Law Society however accepted Ms Terepo’s explanation for her delay and, in light of the strength of her appeal, consented to the order then made by this Court on 16 August 2022 extending the time for Ms Terepo’s appeal.

4. [4]

   Following consideration of the grounds of Ms Terepo’s appeal, the Law Society conceded that the Tribunal erred in the respect stated in Ground 1 of the appeal. The Law Society and Ms Terepo then reached agreement as to the orders that they considered that this Court should make. As a result, they presented consent orders to the Court, designed to dispose of both proceedings. In doing so, they acknowledged that, in professional disciplinary matters, even where there is consent by both parties to proposed orders, the Court needs to satisfy itself that it is appropriate for those orders to be made (see Council of the Law Society of New South Wales v Jafari [2020] NSWCA 53 at [3]).

5. [5]

   After the Court brought various matters to their attention, the parties reformulated the proposed orders. The detail of them as restated is referred to below. It is sufficient at this stage to indicate that they do not provide for Ms Terepo’s name to be removed from the Roll but instead provide for an order precluding her from applying for a new practising certificate (she not having held such a certificate for many years) unless a stipulated educational condition is satisfied.

Ms Terepo’s background and conduct

1. [6]

   The following matters may be stated briefly as none are in dispute.

2. [7]

   In 2014 Ms Terepo was a sole legal practitioner and the principal of LMJ Lawyers. She subsequently ceased, and has not resumed, practice. She presently has seven children and at times assists her husband in his construction business.

3. [8]

   In about November 2014 Ms Terepo gave her husband access to her law practice’s trust account. In the period 3 November 2014 to 1 December 2014, without Ms Terepo’s or clients’ authority, her husband made some 37 transfers ranging in amounts from $50 to $2000 and totalling $12,070.50 from the trust account into the law practice’s office account or Ms Terepo’s account. A further amount of $100 was transferred out of the trust account without authority on 2 February 2015.

4. [9]

   In an affidavit dated 20 October 2021 Ms Terepo stated that in 2014 she was struggling with her mental health and experiencing difficulties with her marriage. She said that in 2014 she made two trips to her home country, Tonga, in the hope that they would help her condition. She said that she was “not thinking straight” at that time and gave her husband “authority to manage all [her] accounts including [her] Trust Account”. She continued:

5. [10]

   The other transaction which was the subject of the Law Society’s subsequent complaint was Ms Terepo’s withdrawal on 9 December 2014 from her trust account and transfer to her personal account of an amount of $850. Again, this was not a withdrawal that was authorised by any of her clients. When this transaction and the $100 referred to in [8] above are added to the other transactions referred to in that paragraph, the total number of transactions complained of is 39, involving a total amount of $13,020.50.

6. [11]

   In her affidavit, Ms Terepo subsequently proffered the following explanation for the transaction:

7. [12]

   These matters were the subject of the first two grounds on which the Tribunal found Ms Terepo guilty of professional misconduct. The third related to Ms Terepo’s failure to comply with a requirement to provide information under s 371 of the Uniform Law. On 9 December 2015 and 29 February 2016 the Law Society sent letters to Ms Terepo requesting information regarding her trust account irregularities, and on 30 May 2016 a section 371 notice was served on her. Ms Terepo provided an undated letter sent by email on 4 November 2015 which responded to the Law Society’s complaint; and she provided a further undated letter which was received on 8 July 2016. There was no evidence before the Tribunal of any further correspondence from Ms Terepo dealing with or responding to the requests for information or the s 371 notice. Ms Terepo’s letters did not respond to all the questions posed by the Law Society, were vague, and did not provide full information and disclosure.

8. [13]

   In the letters Ms Terepo however expressed contrition for her conduct and made statements relating to her mental health.

The Law Society’s application to the Tribunal

1. [14]

   The Law Society’s application to the Tribunal stated the following grounds warranting an order that Ms Terepo’s name be removed from the Roll. The references to files constitute the identification of Grounds 1, 2, 3 and 4. For the sake of clarity (which is lacking in the application) the file references have been emboldened and the word “GROUND” added as appropriate.

2. [15]

   As is obvious, the grounds of complaint could and should have been stated much more clearly than they were.

3. [16]

   As to the legislation applicable to Ms Terepo’s conduct and referred to in the Law Society’s Grounds:

4. [17]

   The particulars given in the application indicated that the conduct referred to in paragraphs [8] and [10] above was the subject of the four grounds. The only reference in the application to recklessness was in paragraph 7 (relating to Ground 1) which alleged that by virtue of those transactions “the Solicitor failed to hold trust funds in a general trust account as required by Section 255 of the Legal Profession Act 2004 and was, at least, recklessly careless in that regard”.

5. [18]

   The Tribunal gave the following reasons for its finding that Ms Terepo was guilty of professional misconduct on Grounds 1-3:

6. [19]

   As to Ground 4, it found that the breach of clause 66(2) of the Regulation was conduct that “… fell short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent lawyer”.

7. [20]

   Ms Terepo did not appear at the hearing of either Stage 1 or Stage 2 of the Tribunal proceedings.

Ms Terepo’s appeal

1. [21]

   Ground 1 of the Amended Notice of Appeal relates to the Tribunal’s decision of 2 July 2018 and is expressed in the following terms:

2. [22]

   In its written submissions to this Court, the Law Society emphasised the need for disciplinary tribunals to keep within the boundaries of the cases put to them, by referring in particular to the following observations of McHugh, Kirby and Callinan JJ in Walsh v Law Society of New South Wales (1999) 198 CLR 73; [1999] HCA 33:

3. [23]

   The Law Society noted that these statements were made in relation to earlier legislation, being the Legal Profession Act 1987 (NSW), but submitted, correctly, that they were equally applicable to the Legal Profession Act 2004 (NSW).

4. [24]

   Walsh accordingly confirms that if the Tribunal determined a matter outside the complaint made to it (without varying the complaint), it exceeded its jurisdiction.

5. [25]

   Returning to the present case, the Law Society concurred with Ms Terepo’s contention in her Ground 1 (see [21] above) that the Tribunal erred in taking into account an irrelevant consideration on the basis that the Tribunal determined the proceedings against Ms Terepo in a significant respect on the basis of a finding of professional misconduct that was not sought by the Law Society. It referred to the Tribunal’s finding in paragraph [101] that:

6. [26]

   The Law Society pointed out that the allegation in its application that Ms Terepo was “recklessly careless” was confined to an allegation of a breach of s 255 (see [14] above) and that the Law Society had not otherwise alleged that Ms Terepo had acted recklessly. The Tribunal’s finding that Ms Terepo was “recklessly indifferent” was not so confined but was stated in support of its finding of professional misconduct on Grounds 1, 2 and 3. These Grounds were based on breaches of a number of statutory provisions (see [18] above), not limited to s 255. The Law Society submitted that, as a result, the Tribunal went beyond the jurisdiction conferred by s 138 of the Legal Profession Uniform Law Application Act 2014 (NSW) to “conduct a hearing into each allegation particularised in a disciplinary application made to the Tribunal”.

7. [27]

   The Law Society’s submissions correctly reflect the factual position in the proceedings in the Tribunal and the legal consequences of it. Accordingly the Tribunal exceeded its jurisdiction and its relevant orders must be set aside.

The consent orders

1. [28]

   In light of the above, and the additional observations below, this Court considers it appropriate to make the orders set out at [34] and [35] at the end of this judgment. These orders reflect the terms of the orders proposed by the parties, with some adaptation.

2. [29]

   Order 1 in [35] appropriately refers only to appeal Ground 1 as Ms Terepo indicated that she did not press her remaining grounds of appeal in the event that Ground 1 succeeded.

3. [30]

   The finding of professional misconduct in Order 1 below is appropriate and reflects findings of the Tribunal that were within jurisdiction. It also reflects the following observations of Meagher JA (Beazley P and Leeming JA agreeing) in Prothonotary of the Supreme Court of New South Wales v Dimitrious [2015] NSWCA 258 at [21]:

4. [31]

   The setting aside of Order 1 made by the Tribunal on 26 April 2019, that being the recommendation that Ms Terepo’s name be removed from the Roll, is appropriate as it was in part based on the Tribunal’s impermissible finding of recklessness. In any event whilst the findings of professional misconduct against Ms Terepo are serious, they are not, in light of the circumstances in which Ms Terepo’s conduct occurred, so serious as to warrant an order for the removal of her name from the Roll and, in any case, the Law Society no longer seeks such an order.

5. [32]

   Order 2 made by the Tribunal on 2 July 2018 will be left unaffected by the orders to be made on this appeal. Order 2 related to Ground 4 of the Law Society’s application pursuant to which the Tribunal found Ms Terepo guilty of unsatisfactory professional conduct (see [19] above).

6. [33]

   In light of the contrition expressed by Ms Terepo and the circumstances applicable when her conduct occurred, it is sufficient that, as contemplated by this Court’s orders, her conduct be addressed by a finding of professional misconduct and, in one respect, a finding of unsatisfactory professional conduct, together with a restriction on her ability to apply for a practising certificate.

Orders

1. [34]

   The Court orders that the Law Society’s summons in proceedings 2020/301529, being the proceedings for removal of Ms Terepo’s name from the Roll, be dismissed with no order as to costs.

2. [35]

   In proceedings 2021/00075408, being Ms Terepo’s appeal against the Tribunal’s orders, the Court makes the following orders:

   1. (1)

      Appeal allowed in relation to Ground 1 of the Amended Notice of Appeal filed on 21 October 2021.

   2. (2)

      Order 1 made by the New South Wales Civil and Administrative Tribunal on 2 July 2018 is set aside and in lieu thereof, the Court declares that the Appellant is guilty of professional misconduct in respect of the following conduct:

   3. (3)

      Order 1 made by the Tribunal on 26 April 2019 is set aside and in lieu, the Court orders that:

   4. (4)

      Note that the Court makes no order as to the costs of the proceedings in the Court of Appeal.