Two Solicitors Charged with Misconduct and Unsatisfactory Professional Conduct
Two solicitors from a Victorian firm were to recover unpaid tolls incurred by motorists resident in New South Wales driving on roads in NSW (the interstate debtors). It is disputed whether or not debt collection proceedings against the interstate debtors could properly be brought in the Magistrates’ Court of Victoria. The Court, in adjudicating this dispute and determining corresponding penalties, referred to the Legal Profession Uniform Law ss 296, 297 and the Professional Conduct and Practice Rules 2005, rules 14.1, 14.2 and 29.2.3.
Facts:
Mr Bloom was the principal of the firm Geoffrey Mendleson Lawyers Pty Ltd (GML) from 2007 – 2016. From 2011, Ms Ching-Fei Chiu was an employee solicitor of the firm. From 2007-2015, at least 333 debt collection proceedings were commenced by GML against NSW residents, in relation to NSW road toll charges. They were filed in the Victorian Magistrates’ Court, using its electronic filing system, EDI (Electronic Data Interchange). A default judgement was obtained against the defendant.
Mr Bloom was taken on as the principal of the newly established firm created by the mercantile agent Probe Australia Pty Ltd (Probe) in March 2007. It was the sole shareholder of GML. Mr Bloom conducted the debt collection practice from GML’s office in Caulfield. But in 2011 another office, in the city, was opened. Ms Chiu’s role became to manage the debt collection practice which was still run from the Caulfield office, while Mr Bloom spent most of his time in the new Melbourne office.
In November 2014, a NSW resident, a Mr Controna, made applications to set aside two default judgments which had been obtained against him. In one of the cases, the plaintiff was Roam Tolling Pty Ltd (Roam). In the other, the plaintiff was Tollaust Pty Ltd (Tollaust). Both are companies in the Transurban Group. Mr Controna stated that he was a a pensioner, and not aware of the default judgments against him until he had received notice from the Sheriff in NSW.
On 23 September 2014 a warrant of seizure of his Toyota Corolla was executed by the Sheriff and his car was due to be sold on 25 November 2014. On 26 November 2014, Mr Bloom appeared for the plaintiffs. Magistrate Maxted made it clear that his view was that the two Complaints had wrongly been brought in Victoria, since the contract arose in NSW, with NSW statutory provisions being applicable. On 10 February 2015, Ms Chiu appeared for the plaintiff, Roam. Magistrate Maxted reiterated the view he had expressed to Mr Bloom on 26 November 2014 that the Magistrates’ Court did not have jurisdiction and that pursuing such applications was an abuse of process.
Mr Bloom was charged for failing to supervise staff, such that 333 proceedings were wrongly commenced in Victoria over the period 2007-2015. After being told in a hearing by a Magistrate on 26 November 2014 that the court did not have jurisdiction, he nevertheless failed to prevent two NSW debt-collection cases from being commenced, and steps being taken in 10 existing cases. He was also charged for failing to supervise staff, such that two affidavits were sworn by a law clerk in 2014 containing false information. Ms Chiu was charged with recklessly making misleading statements to the same Magistrate in a hearing on 10 February 2015.
Between 27 November 2014 and 30 June 2015, she failed to supervise staff, and to correct misleading statements made to the Magistrates’ Court. She also witnessed (the same) two affidavits sworn by a law clerk in 2014 containing false information. Thus, both solicitors are charged with statutory professional misconduct and statutory unsatisfactory professional conduct. The two solicitors pleaded guilty to three disciplinary charges under the Legal Profession Uniform Law (the Uniform Law).
Issues:
I. Whether or not the Magistrates' Court has jurisdiction.
II. Whether or not Mr Bloom and Ms Chiu should be reprimanded and suspended.
Applicable law:
Legal Profession Uniform Law ss 296, 297 - defines unsatisfactory professional conduct as conduct of a lawyer occurring 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 lawyer.
Professional Conduct and Practice Rules 2005, rules 14.1, 14.2 and 29.2.3 - provides that a practitioner must not knowingly make a misleading statement to a court and must take all necessary steps to correct any misleading statement made by the practitioner to a court as soon as possible after the practitioner becomes aware that the statement was misleading.
Stirling v Legal Services Commissioner [2013] VSCA 374 - where charges are founded on the same inextricably interwoven facts relating to a single course of conduct.
New South Wales Bar Association v Hamman[1999] NSWCA 404; (1999) 217 ALR 553 - the NSW Court of Appeal noted that the underlying purpose of imposing a penalty in a disciplinary proceeding is to protect the public and to maintain proper standards.
Pillai v Messiter [No 2] (1989) 16 NSWLR 197 - provided that the public is entitled to be protected from delinquent wrongdoers within professions, who are ignorant of basic rules or indifferent as to rudimentary professional requirements.
Brott v Legal Services Commissioner[2009] VSCA 55 - previous disciplinary decision relating to practitioners having misled courts.
R v Merrett [2007] VSCA 1; [2007] 14 VR 392 - provides that delay constitutes a ‘powerful mitigating re factor’. In particular, it focuses attention on the issues of rehabilitation and fairness.
Guss v Law Institute of Victoria[2006] VSCA 88 at [39] - Maxwell P said that where there is any conflict or risk of conflict between that duty and what the practitioner perceives to be his/her duty to the client, the duty to the court must always prevail.
Council of the Law Society of NSW v a Solicitor[2002] NSWCA 62 at [1013] - Sheller JA the administration of justice depends in large measure on the trust the courts and the public place in those who practise law.
Legal Services Commissioner v Nomikos[2014] VCAT 251 - the Tribunal said that while suspension might have been justified in the interests of general deterrence, the seven specified mitigating factors swung the balance in favour of a fine of $25,000 instead.
Kyle v Legal Practitioners Complaints Committee [1999] WASCA 88 at [39] - held that the justification of the duty of the counsel not to mislead the court, and the reason for its fundamental importance in the due administration of justice, is that an unswerving and unwavering observance of it by counsel is essential to maintain and justify the confidence which every court rightly and necessarily puts before counsel who appear before it.
Analysis:
Both Mr Bloom and Ms Chiu accept the facts which form the basis of their charges, and also that their conduct amounts to statutory professional misconduct and unsatisfactory professional conduct respectively. The VLSC submitted that both Mr Bloom and Ms Chiu should be reprimanded and suspended for a period of between six and nine months, as well as being required to complete a Practice Management Course. On behalf of both Mr Bloom and Ms Chiu, it was submitted that the needs of the community and the profession could be adequately met by a reprimand and a fine. Mr Bloom's conduct is serious and undermines the integrity of, and public confidence in, the legal profession and in the Court.
There was serious misuse of the electronic filing system which was undetected for seven years and involved hundreds of matters. It was said on behalf of Mr Bloom that the process by which some debt proceedings were initiated in Victoria had been in place before he commenced with GML in 2007. Prior to his departure as a director of GML in early 2016, Mr Bloom put in place systems to ensure that there will be no recurrence of such errors. Four character references provided evidence in support of Mr Bloom describing him as a man of integrity.
Mr Bloom’s conduct in allowing the high-volume debt collection practice to proceeded for seven years, on the basis of false assertions that the Magistrates’ Court had jurisdiction to deal with interstate debts, was, in effect, a blind spot, inconsistent with his normal careful way of operating.
Ms Chiu displayed a lack of insight and remorse in that her attitude to the conduct did not alter during the investigation or afterwards, up until the time she decided to plead guilty in September 2020. When Ms Chiu commenced with GML in 2011, the firm had been issuing proceedings in Melbourne on behalf of entities operating toll roads in NSW for a number of years. She assumed that proceedings had a significant connection with Victoria and that there was a legitimate basis for such claims being issued in Victoria, up until November 2014. It was put that the conduct is a source of acute embarrassment for Ms Chiu and not reflective of the responsible approach which she takes to her work, as, in the words of one of her referees, ‘a professional, trustworthy and hard-working solicitor’.
Conclusion:
The Court found Mr Bloom guilty of two charges of professional misconduct, and one charge of unsatisfactory professional conduct. Mr Bloom’s local practising certificate is suspended for six months from the end of 1 October 2021. Mr Bloom is to be reprimanded. Mr Bloom is required to complete a Practice Management Course to the satisfaction of the Victorian Legal Services Commissioner (VLSC).
Mr Bloom is to pay the VLSC’s costs in the agreed sum of $63,000. Ms Chiu is likewise found guilty of two charges of professional misconduct, and one charge of unsatisfactory professional conduct. Ms Chiu’s local practising certificate is suspended for three months from the end of 1 October 2021. Ms Chiu is also reprimanded and required to complete a Practice Management Course to the satisfaction of the VLSC. Ms Chiu is to pay the VLSC’s costs in the agreed sum of $51,000.
