Council of the Law Society of New South Wales v Ashworth

NCAT Occupational|2015-10-22

OD 23 New South Wales Bar Association v Butland [2009] NSWADT 177 New South Wales Bar Association v Meakes [2006] NSWCA 340 The Council of the Law Society of New South Wales v Hussein [2010] NSWADT 182 R v Lawrence [1977] 1 VR 459 Xie v Wen [2016] NSWCATOD 110 Category: Principal judgment Parties: Council of the Law Society of New South Wales (Applicant) Gary John Ashworth (Respondent) Representation: Solicitor: Council of the Law Society of New South Wales (Applicant) File Number(s): 1520091

Introduction

By an application filed on 13 May 2015 the Council of the Law Society of New South Wales (Society) seeks the following orders: "1. The Solicitor's name be removed from the roll. 2. The Solicitor pay the costs of the Society as agreed or assessed. 3. Such further or other order as the Tribunal deems fit."
The application notes that a complainant, Janet Waterlow, seeks compensation in the sum of $800.
The grounds stated in the application allege that Mr Ashworth is guilty of professional misconduct by reason that: 1. He misappropriated trust funds. 2. He wilfully breached ss 255, 263 and 264 of the Legal Profession Act 2004, NSW (LPA). 3. He failed to refund moneys held in trust. 4. He failed to provide a detailed account.
In the reply to the application filed by Mr Ashworth on 17 June 2015, he stated: "1. I do not agree with but do not oppose the Orders sought by the Law Society Council in the application filed 13 May 2015. 2. I am currently bankrupt [relevant file number provided] and unemployed and do not have the resources to contest the matter."

History of the matter before the Tribunal

The filing of the application and reply are referred to above. The proceedings were listed for directions before the Tribunal on 1 July 2015. The Society was represented and Mr Ashworth appeared by telephone. At that time, in addition to the matters the subject of the reply, the Tribunal noted Mr Ashworth's indication that he did not wish to participate in the proceedings or file any further material. The matter was listed for hearing on 22 October 2015 for one half day.
Mr Pierotti appeared on behalf of the Society at the hearing. There was no appearance by Mr Ashworth and the hearing proceeded ex-parte. At the conclusion of the hearing the following directions were made: 1. The applicant to file and serve further submissions on jurisdiction and the operation of the Legal Profession Uniform Law (Uniform Law) on or before 5 November 2015. 2. The respondent to file and serve any submissions in response on or before 19 November 2015. 3. The applicant to file and serve any submissions in reply on or before 26 November 2015.
Submissions dated 3 November 2015 were received on behalf of the Society. No submissions were received from Mr Ashworth.

Jurisdiction

By s 167(a) of the Legal Profession Uniform Law Application Act, 2014 (NSW) (Application Act), the LPA was repealed as from 1 July 2015. It was replaced by the Legal Profession Uniform Law.
A range of consequential amendments commencing 1 July 2015 are provided for in Schedule 2 to the Legal Profession Uniform Law Application Legislation Amendment Act 2015 (Uniform Law Amendment Act). The Civil and Administrative Tribunal Act 2013 (CAT Act) was amended to reflect the commencement of the Uniform Law.
The application in these proceedings was filed on 13 May 2015 prior to the repeal of the LPA. The underlying compliant had been made under Chapter 4 of the LPA.
Relevant transitional provisions are to be found both in Schedule 4 of the Uniform Law and Schedule 9 of the Application Act.
The question arises whether the disposition of the matter before us continue to be governed by the LPA.
The Society made reference to Clause 3 of Part 2 in Schedule 9 of the Application Act provides as follows: "3 General Savings and Transitional Provisions (1) This clause has effect subject to this Act and the Legal Profession Uniform Law (NSW). (2) Each person, body, thing and circumstance appointed or created under the repealed Act or existing or continuing under that Act immediately before the commencement of relevant provisions of the Legal Profession Uniform Law (NSW) continues to have the same status, operation and effect as it would have had if this Act had not been enacted. (3) Any act, matter or thing subsisting immediately before the commencement of relevant provisions of the Legal Profession Uniform Law (NSW) that: (a) was done or omitted under the repealed Act, and (b) could have been done or omitted under that Law (with any necessary modifications) if that Law had been in force when it was done or omitted, is taken to have been done or omitted under that Law."
The Society further made reference to Clause 2 of Part 1 of Subsection 3 of the Uniform Law which provides as follows: "2 General savings and transitional provision (1) … (2) If anything of a kind required or permitted to be done under a provision of this Law as applied in this jurisdiction was done under a corresponding provision of the old legislation and still had effect immediately before the commencement day, the thing continues in effect on and after that day as if- (a) this Law as applied in this jurisdiction had been in force when it was done; and (b) it had been done under this Law as applied in this jurisdiction. (3) If subclause (2) applies in relation to the execution, lodgement, issue or publication of a written instrument, any reference in the instrument to a provision of the old legislation is, for the purposes of that subclause, to be read as a reference to the corresponding provision of this Law as applied in this jurisdiction. (4) Without limiting subclauses (2) and (3), if a provision of the old legislation that corresponds to a provision of this Law as applied in this jurisdiction would, but for its repeal by the Legal Profession Uniform Law Act of this jurisdiction, have applied in relation to anything done or being done or in existence before the commencement day, the provision of this Law applies in relation to that thing, and so applies with any necessary adaptations."
The Society submitted that, on a proper construction of Schedule 9 Part 1 Clause 3(3) of the Application Act, as an application for orders required or permitted under s 302 of the Uniform Law had been made under a corresponding provision (being s 562 of the LPA 2004) and that application still had effect immediately prior to 1 July 2015, then by virtue of clause 2(2) of Schedule 4 of the Uniform Law the application continues in effect on and after 1 July 2015 as if the Uniform Law had been in force on 9 December 2014 and as if the application was made under the Uniform Law.
No authority was cited in support of the proposition which the Society sought to put on the issue of jurisdiction. With great respect to the Society its submission is against the weight of authority. The question of jurisdiction in the context of the repeal of the LPA was considered by the Tribunal in detail in its decision in Council of New South Wales Bar Association v Breeze [2015] NSWCATOD 152 in which it said at paras [41] to [49] as follows: "41 Before we proceed to make the consent findings and orders sought, briefly, we set out our reasons for concluding that the pertinent provisions of the now repealed 2004 LPA govern the disposition of these matters. The parties do not contend otherwise. In this regard, we were greatly assisted by submissions from Senior Counsel for Ms Graves. 42 The proceedings in each of these matters were commenced in October 2014, at which time the 2004 LPA was in force. The complaints the subject of the proceedings were made under Chapter 4 of that Act. 43 With effect from 1 July 2015, the 2004 LPA was repealed and replaced by the Legal Profession Uniform Law (NSW) (the Uniform Law). Savings and transitional provisions are contained in both Schedule 4 of the Uniform Law and Schedule 9 of the Legal Profession Uniform Law Application Act 2014 (NSW) (the Application Act 2014), by which the Uniform Law was introduced as part of the law of New South Wales. 44 Clause 26 of Schedule 4 of the Uniform Law addresses the present situation reasonably precisely. It provides in part as follows: Division 7 Dispute resolution and professional discipline 26 Current complaints and investigations (1) This clause applies to - (a) a complaint made under old Chapter 4 but not disposed of before the commencement day; or (b) an investigation referred to in old Chapter 4 that had begun but had not been completed before the commencement day. (2) On and after the commencement day - (a) the complaint or investigation is to continue to be dealt with in accordance with the provisions of the old legislation; and (b) for that purpose, the complaint or investigation is to continue to be dealt with by the entity responsible for dealing with it under those provisions (the current entity). (3) Subclause (2)(b) does not apply if a local regulation or other legislation of this jurisdiction directs that another entity referred to in this Law (the substituted entity) is to deal with the complaint or investigation instead of the current entity. 45 The definitions of "commencement date", "Chapter 4" and "old legislation" in Clause 1 of Schedule 4 make it clear that on and after 1 July 2015 these proceedings are to continue to be dealt with in accordance with the provisions the 2004 LPA. 46 In view of the specific coverage of the issue in Clause 26, the general savings provisions in clause 2(2) of Schedule 4 and Clause 3(3) of Schedule 9 of the Application Act do not apply. Each is, in effect, expressly subjugated to other more specific provisions: see clause 2(6) of Schedule 4 of the Uniform Law and clause 3(1) of Schedule 9 of the Application Act. On their face, these general savings provisions, otherwise appear to mean that the new Uniform Law would govern the situation. 47 Further, in our opinion, because specific provisions have been made for savings and transitional issues in the Uniform Law and the Application Act, the sections dealing with the effect of repeal of an Act in the relevant Interpretation Act do not apply, assuming that they otherwise did, as to which we express no opinion; see, for example, Adco Constructions Pty Ltd v Goudappel (2004) CLR 1; see plurality at [27]-[29] and Gageler J at [52]. That is because of the principle that a specific provision will take precedence over a general provision, and because of the term in the relevant Interpretation legislation providing that the legislation applies except in so far as a contrary intention appears in the other legislation. 48 Probably, if they had been applicable, the effect of the pertinent provisions of the relevant Interpretation Act would be that these proceedings brought under the 2004 LPA remained unaffected by the repeal of that Act and the Tribunal continued to have the powers of determination set out in s 562 of the 2004 LPA. However, in view of our conclusion that the savings and transitional provisions take precedence, it is unnecessary for us to express a final view on this point. 49 For the same reason, it is also unnecessary that we resolve the question as to which Interpretation Act is applicable. It is possible that it is the Victorian Interpretation of Legislation Act (1984) that applies for present purposes. This possibility arises because it is the new Victorian legislation concerning the legal profession that is made a law of New South Wales by the Application Act (s 4(a)) and the New South Wales Interpretation Act 1987 (NSW) is expressly excluded from applying to the Uniform Law; s 5(1)(a). However, it is the Application Act (a law of New South Wales) that repealed the 2004 LPA (by s 167, now itself repealed because its operation is spent) and the Interpretation Act 1987 (NSW) applies to that Act: s 5(2)(a). In any event, similar provisions exist in both the New South Wales and Victorian legislation concerning the effect of repeal, most pertinently, s 14(2)(g) of the Victorian Act and s 30(1)(e) of the New South Wales Act."
As the Tribunal said in the Council of the Law Society of New South Wales v Gates [2016] NSWCATOD 35 at [10] the reasoning Breeze does not appear to be in error or demonstrably wrong in principle. We are satisfied that it is appropriate to determine the matter before us in accordance with provisions of the LPA, the relevant statutory power enabling us to make orders being s 562; see also Legal Services Commissioner v Searle [2016] NSWCATOD 23 at [17]; Legal Services Commissioner v Miskell [2016] NSWCATOD 95 at [35] (both in respect of applications filed after the commencement of the Uniform Law in respect of investigations begun but not completed before the commencement of the Uniform Law) and Council of the New South Wales Bar Association v Berwick [2016] NSWCATOD 81 at [10].
Notwithstanding Mr Ashworth's position of not opposing the orders sought the Tribunal retains a discretion as to whether or not to make the orders; see in respect of an instrument of consent under s 564 of the LPA as it then was New South Wales Bar Association v Butland [2009] NSWADT 177 at [29]. In Butland reference was made at [31] to the decision of Barrett J in Australian Securities & Investments Commission v Elm Financial Services Pty Ltd (2005) 55 ACSR 411; [2005] NSWSC 1020 where his Honour outlined the proper approach to consent orders in regulatory matters saying at [9]: "The parties have, in each case, agreed the duration of the disqualification. That, however does not absolve the Court of its duty to consider the appropriateness of the penalty in light of the agreed facts and the surrounding circumstances."
Additionally although the orders are not opposed in these proceedings, Mr Ashworth's reply expressly states that he does not agree with the orders. We consider it appropriate that the Tribunal proceed to determine of the matter on the merits.

Evidence before the Tribunal

The Society read in its case the affidavits of Peter Leslie Edwards, trust account investigator in the employ of the Society, sworn 30 April 2015, Antony John Fairbairn, trust account investigator in the employ of the Society sworn 5 May 2015 and Anne-Marie Foord, solicitor for the Society sworn 14 May 2015. In the absence of any appearance by Mr Ashworth this evidence was admitted without objection. The witnesses were not required for cross examination.
There was no formal evidence from Mr Ashworth. There was in evidence in the Society's case some material provided by him to the Society to which we shall refer.

Relevant background and findings of fact

Mr Ashworth was admitted to practice as a solicitor in New South Wales on 4 October 2002. The records of the Society indicate that he worked as an employee or non-principal in private practice between February 2004 and July 2011. He was the principal of Ashlaw Associates between 7 May 2007 and 30 June 2014. He has not sought to renew his practising certificate from June 2014.
Mr Ashworth practised as Ashlaw Associates from premises in Edwards Street, Gunnedah in New South Wales. The firm operated a general trust account and an office account with the ANZ Bank at North Sydney in its name.
There was evidence that Mr Ashworth made withdrawals from his firm's trust account as follows: July 2013 16 July 2013 $ 250.00 17 July 2013 $ 250.00 17 July 2013 $ 250.00 17 July 2013 $ 250.00 18 July 2013 $ 250.00 18 July 2013 $ 302.50 19 July 2013 $ 250.00 19 July 2013 $ 500.00 Total $ 2,302.50

August 2013 5 August 2013 $ 250.00 5 August 2013 $ 252.50 16 August 2013 $ 502.00 19 August 2013 $ 500.00 19 August 2013 $ 500.00 19 August 2013 $ 500.00 19 August 2013 $ 500.00 19 August 2013 $ 502.50 17 August 2013 $ 60.00 27 August 2013 $ 251.50 27 August 2013 $ 500.00 29 August 2013 $ 500.00 29 August 2013 $ 1,000.00 30 August 2013 $ 1,000.00 Total $ 6,818.50

October 2013 10 October 2013 $ 821.50 11 October 2013 $ 501.50 11 October 2013 $ 502.00 14 October 2013 $ 250.00 14 October 2013 $ 300.00 14 October 2013 $ 301.50 14 October 2013 $ 302.50 14 October 2013 $ 500.00 14 October 2013 $ 500.00 14 October 2013 $ 500.00 14 October 2013 $ 501.50 15 October 2013 $ 100.00 11 October 2013 $ 40.00 24 October 2013 $ 200.00 24 October 2013 $ 600.00 Total $ 5,920.50

November 2013 25 November 2013 $ 500.00 25 November 2013 $ 1,000.00 26 November 2013 $ 202.50 26 November 2013 $ 251.50 Total $ 1,954.00

December 2013 6 December 2013 $ 352.60 9 December 2013 $ 350.00 13 December 2013 $ 15.80 Total $ 718.40

January 2014 31 January 2014 $ 2.00 Total $ 2.00

These withdrawals were not supported by an invoice issued to any client. There was no evidence that they were otherwise authorised.
On 24 June 2014, Anthony Fairbairn made an inquiry of Mr Ashworth as to why he had not completed annual trust money statements for Ashlaw Associates. Mr Ashworth informed Mr Fairbairn that trust money had been held in trust for the 2013/2014 year, that the trust account records were not up to date, that he had not been working for some six months due to drug and alcohol abuse and that his financial position was "dire".
Peter Edwards was allocated the matter to investigate on 30 June 2014. A formal interview was conducted by Mr Edwards of Mr Ashworth at the Gunnedah premises on 7 July 2014 and the signed record of interview was in evidence. Relevantly, the transcript of the record of interview contains the following admissions by Mr Ashworth: "I [Peter Edwards] said: You told me on the telephone last week that you have taken money from your law practice trust account without any authority from your clients. Is that correct? He [Mr Ashworth] said: Yes. I said: You also told me that these unauthorised withdrawals from the trust account had been made by you from various ATMs. Is that correct? He said: Yes I have identified these withdrawals on an internet printout of my trust account (produced as two pages of ANZ internet bank statements for the period 8 July 2013 - 30 August 2013. Ref 13). I said: Do you agree that the withdrawals you have marked with the colour yellow are all withdrawals that you made from your account without any authority from your clients? He said: Yes. I said: Do you also agree that these unauthorised withdrawals total $9,121? He said: Yes. The first unauthorised withdrawal on this list is on 16 July 2013 for $250. The last one is on 30 August 2013 for $1,000. They were made at various ATMs in Sydney, including North Sydney, Crows Nest and the Downing Centre. I said: Did you make any unauthorised withdrawals before 16 July 2013? He said: No. I said: Do you agree that the unauthorised withdrawals on the internet printout were made from ATMs? He said: Yes."
After discussion about Mr Ashworth's circumstances at the time the transcript continues: "I said: You have told me earlier today that there have been other unauthorised withdrawals by you from the trust account. Is that correct? He said: Yes, I cleaned up my act after 30 August 2013 for the month of September when I got rid of the girlfriend but she resurfaced later. By this stage I had no money. Through September 2013 I was seeing my GP and he suggested a referral to the psychiatrist but I had no money. I was also referred to a drug and alcohol counsellor but it took me until 19 November 2013 to see him, Dr Hardie. On 10 October 2013 I withdrew $821.50 from the trust account by ATM without authority. I withdrew $501.50 from the trust account without authority on 11 October 2013 and a further $502 on the same day. On 14 October 2013 I made a further eight withdrawals without authority from the trust account. … I said: Do you agree that the bank statements for the trust account show eight ATM withdrawals on 14 October 2013 being $250, $300, $301.50, $302.50, $500, $500, $500 and $501.50 and these were all made by you without any client authority? He said: Yes I also withdrew from the trust account without authority $100 on 15 October 2013. The context here is I have no other money. Further unauthorised withdrawals were made by me from the trust account being $40 on 16 October 2013, $200 and $600 on 24 October 2013, $500 on 25 November 2013, $202.50 and $251.50 on 26 November 2013, $352.50 on 6 December 3013, $350 on 9 December 2013 and $15.80 on 13 December 2013. … I said: As I explained earlier, were you aware when you first started making withdrawals from the trust account at ATMs, that these were prohibited in any circumstances under the Legal Profession Act and Regulations? He said: Yes the trust account bank statements also show a withdrawal of $2 on 31 January which is when I went to an ATM for a balance inquiry. … Further unauthorised withdrawals were made by me from the trust account on 28 March 2014 for $2 and $225.50 and $820 on 31 March 2014. I said: Do you agree that the total of unauthorised withdrawals by from the trust account is $9,121 during the period 16 July 2013 to 30 August 2013 and $8,639.30 during the period 10 October 2013 to 31 March 2014 giving a total amount of $17,760.30 unauthorised withdrawals made by you? He said: Yes but most of it has gone back. I said: What hasn't gone back? He said: I have no idea. … I said: You said earlier that you have no idea what money hasn't been repaid by you to the trust account. You have identified that you have repaid $6,121 on 13 September 2013 when I first arrived this morning. Can you explain why you have no idea what other repayments you have made? He said: The trust account records are not up to date. I am now unravelling them. They are a bloody mess. I said: Could the deficiency be more than $800? He said: Yes but I don't know as the book work is not completed. I said: You have agreed that you have withdrawn a total amount of $17,760.30 without authority from the trust account and you have repaid $6,121 on 13 September? He said: Yes that's correct but I'm not saying that's the limit. I said: What do you mean by the limit? He said: There could be further unauthorised withdrawals but the $17,760.30 is easily and readily identified by me."
It is noted that the amount referred to in the record of interview of $17,760.30 is $50 more than the amount referred to in paragraph 20 of the application. Mr Ashworth did not admit to the unauthorised withdrawal of $1,000 on 25 November 2013.
In the matter of Waterlow there was evidence that Mr Ashworth was engaged to act on behalf of her daughter, Philippa Bebonis, in respect of a divorce settlement. Ms Waterlow paid into his trust account deposits on 23 October 2013 and 28 March 2014 totalling $1,900. Mr Ashworth withdrew $800 from the trust account (by way of two withdrawals of $200 and $600 respectively) on 24 October 2014, $224.50 from the trust account on 28 March 2014 and $820 on 31 March 2014. He has admitted the unauthorised withdrawals of $224.50 and $820 respectively. On 24 September 2014, Mr Ashworth raised a tax invoice addressed to PM Bebonis in the amount of $1,100 including GST referring to legal work undertaken on behalf of Ms Bebonis. We are satisfied on the evidence that $800 of the amounts deposited by Ms Waterlow on account of Ms Bebonis are not attributable to the invoice which has been raised. These moneys have not been refunded to Ms Waterlow.
There was evidence that the solicitor repaid funds to the trust account as follows: 12 September 2013 $ 500.00 11 September 2013 $ 15.00 13 September 2013 $ 6,121.00 23 September 2013 $ 2,500.00 Total $ 9,136.00

There was also evidence that on 13 November 2013, Mr Ashworth raised an invoice to JD Pearce in an amount of $7,095.95. On 24 February 2014, he raised an invoice to R Treminio for $8,415. $4,700.50 was credited against Mr Treminio's invoice as being held in trust. On 24 December 2014 the solicitor raised the invoice addressed to Ms Bebonis in the amount of $1,100.
The Society submits and we are satisfied on the evidence that taking into account the unauthorised withdrawals which have been admitted the repayments by Mr Ashworth and the invoices generated to which we have referred there remains a deficiency in the trust account of at least $1,983.55.
Misappropriation of trust funds
The Society seeks a finding that Mr Ashworth has misappropriated trust funds.
The expression "misappropriation" is not found in LPA. What constitutes misappropriation was considered in Council of the Law Society of New South Wales v Doherty [2010] NSWCA 177, by Young J (with whom Tobias and Campbell JJA agreed) who said at [41]: "41. There was discussion both before the Tribunal and before us as to the width of the word 'misappropriation'. The base meaning of the word is 'wrongful conversion' (Stroud's Judicial Dictionary, 7th Ed, vol 12 at 1689). It must be noted that in most cases of appropriation of the property of another, claim of right is a good defence and to establish a claim of right, all the accused need show is that he or she had an honest belief in the claim and not also that that belief was based on logic or reason: R V Nundah (19616) 16 SR (NSW) 482, a proposition that has never been doubted."
In Brereton v Legal Services Commissioner [2010] VSC 378 in the Supreme Court of Victoria, Bell J further considered the meaning of misappropriation saying at paras [47] - [58]: "47 A term like misappropriation can have a particular meaning depending on the context. In the present case, the term was used in charge 5 by which the commissioner alleged that Mr Brereton, a practising lawyer, had committed misconduct at common law in that he had 'misappropriated trust moneys'. Misappropriation has been used here to describe the legal character of conduct which, because it had that character, allegedly constituted misconduct at common law. The term is not used here in any special sense. No statutory definition of the term applies. Thus 'misappropriated' here refers to what would be misappropriation according to the ordinary meaning of that word. 48 The ordinary meaning of 'misappropriate' is to 'appropriate to wrong uses; chiefly, to apply dishonestly to one's own use (money belonging to another)' (OED). Likewise, 'misappropriation' is appropriation to wrong uses (OED). 49 The legal dictionaries define 'misappropriation' consistently with that ordinary meaning. According to Jowitt's Dictionary of English Law, misappropriation is: the misdemeanour which is committed by a banker, factor, agent, trustee, etc., who fraudulently deals with money, goods, securities, etc., entrusted to him, or by a director or public officer of a corporation or company who fraudulently misapplies any of its property. In Stroud's Judicial Dictionary of Words and Phrases, 'misappropriate' is defined to mean 'the wrongful conversion of or dealing with anything by the person to whom it was entrusted'. 50 It follows that the word 'misappropriation' in its ordinary sense involves a mental element. Misappropriation is dishonestly misapplying property, including money, held on behalf of another. In the criminal context, misappropriation by and to the trustee personally is not a crime at common law because the trustee already has the property; but it is conduct which, but for that, would be theft. It is 'stealing' in another guise because it is wrongful appropriation by the trustee of property being held for another. 51 Because dishonesty is a mental element of misappropriation in its common law sense, it is necessary to consider what dishonesty means, remembering here we will be doing so in a civil context. The Court of Appeal examined what dishonesty meant in that context in Harle v Legal Practitioners Liability Committee. At issue was whether a solicitor was entitled to indemnity under an insurance policy which did not cover the 'dishonesty or fraudulent act or omission of any insured'. 52 As to the meaning of 'dishonesty', Chernov JA (Callaway and Buchanan JJA agreeing) held: It seems clear enough that where, as here, dishonesty is not used in a special sense in relation to statutory offences, it is not a term of art and is to be given its ordinary meaning. It embraces deliberate conduct which is considered to be dishonest by the standard of ordinary decent people, or, put another way, the ordinary standards of reasonable and honest people. Whether particular conduct amounts to dishonesty involves the consideration of the mental state - the knowledge, belief or intention - of the person whose conduct is impugned. 53 While an allegation of dishonesty requires consideration of the person's mental state, in neither the criminal nor the civil context is it necessary to establish that the person subjectively knew or believed that the actions concerned were dishonest. What must be established is that the person subjectively intended to do the acts which are said to be objectively dishonest by the ordinary standards of reasonable and honest people. Thus the course to be adopted in determining whether conduct is dishonest was explained by Toohey and Gaudron JJ in Peters v R as follows: In a case in which it is necessary for a jury to decide whether an act is dishonest, the proper course is for the trial judge to identify the knowledge, belief or intent which is said to render that act dishonest and to instruct the jury to decide whether the accused had that knowledge, belief or intent and, if so, to determine whether, on that account, the act was dishonest ... If the question is whether the act was dishonest according to ordinary notions, it is sufficient that the jury be instructed that that is to be decided by the standards of ordinary, decent people. 54 The steps involved in this formulation are: (1) identify the knowledge, belief or intent which is said to render the acts dishonest; (2) determine whether the accused (or defendant in the civil context) subjectively had that knowledge, belief or intent; and (3) determine whether, on that account, the acts were objectively dishonest according to the standards of ordinary and decent (that is reasonable and honest) people. 55 When applying these principles in a civil case, the civil standard of proof on the balance of probabilities applies. Of course, where the allegation in a civil case is of misappropriation, a high standard of probability is required, due to the gravity of the allegation. In a criminal case, the criminal standard of proof beyond reasonable doubt applies. 56 This approach to identifying whether alleged conduct was dishonest was applied by the Court of Appeal in the civil insurance context in Harle v Legal Practitioners Liability Committee and by Layton J in the Supreme Court of South Australia in the lawyers' disciplinary context in Legal Practitioners Conduct Board v Jones. 57 In the present case, the tribunal did not address the dishonesty issue. It did not identify the knowledge, belief or intent said to render the making of the payments by Mr Brereton dishonest. It did not determine whether he subjectively had that knowledge, belief or intent. It did not judge his actions in making the payments against the objective standard of dishonesty of reasonable and honest people. It found that Mr Brereton was guilty of misconduct at common law by having 'misappropriated trust moneys' and that he 'well knew (or ought to have known)' what his responsibilities were. It is the alternative state of mind - 'ought to have known' - that is the problem. 58 Generally, professional misconduct at common law is conduct which 'would reasonably be regarded as disgraceful or dishonourable by solicitors of good repute and competency ... Mere negligence, even of a serious character, will not suffice.' Therefore the tribunal could not have found Mr Brereton guilty of misconduct at common law because he had failed to act in accordance with what he 'ought to have known'. There had to be more than that. Yet the tribunal did not base its misconduct finding only on what Mr Brereton 'well knew', but on that and the alternative finding about what he 'ought to have known'."
On appeal from that decision in Legal Services Commissioner v Brereton [2011] VSCA 241, Tate J (with whom Nettle and Ashley JJA agreed) said (at [69]): "However, and with great respect for the trial judge, it is unclear whether dishonesty is a necessary element of misappropriation in the common law sense. In my opinion, there is room for doubt whether dishonesty is always an integral element of a charge of misappropriation, within a professional disciplinary context."
As the Administrative Decisions Tribunal noted in Council of the Law Society of NSW v Ross [2013] NSWADT 106 at [48] in dismissing that appeal the Court ultimately found that it was not necessary to decide whether dishonesty needed to be proved to establish misappropriation in that case. Tate J in Brereton did refer to various dicta to support a view that dishonesty is not "always an integral element of misappropriation, within a professional disciplinary context" (R v Lawrence [1977] 1 VR 459 at [466] per Galloway JA; Daley v Sydney Stock Exchange Ltd (1986) 160 CLR 371 at [380] per Gibbs CJ with whom Wilson and Dawson JJ agreed; Legal Practitioners Board v Jones [2010] SAS CFC 51).
The Tribunal in Council of the Law Society of NSW v Coombes [2015] NSWCATOD 108 at [36] - [43] approved and adopted Bell J's analysis in Brereton at [53] - [55] of the three step formulation of what is required by way of proof of dishonesty in a misappropriation case. As the Tribunal pointed out in Coombes at [36] the formulation in Brereton has been applied in subsequent decisions of the Administrative Decisions Tribunal in Council of the Law Society of NSW v Clapin [2011] NSWADT 83, Council of the Law Society of NSW v Pizzinga [2012] NSWADT 211 and Council of the Law Society of NSW v Nicholls [2012] NSWADT 222 although it was not satisfied on the findings of fact in each instance.
The Tribunal in Coombes however did not apply the formulation in its terms. It found that the application might be qualified depending on whether there is a finding of deliberate or subjective dishonesty saying at [41]: "In our view where there is no finding of deliberate or subjective dishonesty, and the Tribunal is required to consider whether ordinary and decent people would consider particular conduct in relation to the trust account, dishonest, it is appropriate for the Tribunal to consider [mitigating factors]."
In considering that issue, the Tribunal made reference at [38] and [39] to the decision of the NSW Court of Appeal in Kumar v Legal Services Commissioner [2015] NSWCA 161 in which the Tribunal's finding that a solicitor's conduct in directing a trust cheque to pay a personal debt involved deliberate dishonesty on his part was upheld and the finding of deliberate dishonesty confirmed. On appeal in Kumar, Leeming JA said at [61] "These conclusions (of deliberate dishonesty) are not inconsistent with a genuinely held belief that the $12,000 was only a small fraction of the proceeds of settlement, and would only be taken for a short period of time, and was expected to be repaid speedily, perhaps in such a way that Mr Malik would ever know…….. Lest there be any doubt about it, even a temporary use by Mr Kumar of his client's funds without prior approval amounts to serious and deliberate dishonesty. That is precisely the sort of conduct which is antithetical to the trust and confidence which is required by a solicitor with custody of his or her client's money."
The Tribunal in Coombes distinguished the finding in Kumar saying at [40] that: "… This paragraph must be read in the context of the overall finding by the Court of Appeal that the solicitor's conduct amounted to deliberate dishonesty. It was in this context that Leeming JA said that these mitigating factors set out in the passage above, did not detract from dishonesty."
However, even on the analysis in Coombes the statement of Leeming JA is apposite where a finding of deliberate or subjective dishonesty is available.
The Tribunal determined (at [42]) that the Society did not have to establish that the solicitor in that case had the relevant mental element noting their conclusion on the evidence that in any event there could not be a finding of deliberate or subjective dishonesty on the facts. In Coombes at [43] the Tribunal then proceeded to determine the matter by reference to two questions, namely: "Whether the Solicitor intended to do the acts which are the subject to the complaint and secondly whether ordinary and decent people would regard these acts as dishonest."
For the reasons which follow we are satisfied on the evidence that unlike the position in Coombes the appropriation of the money by Mr Ashworth was deliberate and subjectively dishonest. In those circumstances it is unnecessary to consider whether the approach suggested in Coombes (where there was no relevant mental element) need be applied in this instance. We will accordingly proceed to apply the formulation as set out by Bell J.
Turning to consideration of the steps involved in the formulation to which we have referred the relevant acts are the withdrawals which have been identified from the firm's trust account between 16 July 2013 and 31 January 2014. The knowledge, belief or intent which is said to render the acts dishonest is that the withdrawals to which we have referred were not at the time supported by an invoice issued to any client and were not otherwise authorised. Knowledge, belief or intent to withdrawal trust moneys without authority will render such withdrawals dishonest.
The next step is to determine whether Mr Ashworth subjectively had that knowledge, belief or intent. In the transcript of the record of interview to which we have referred, Mr Ashworth agreed that he had taken money from the law practice trust account without any authority from his clients. He agreed that withdrawals totalling $9,121 which had been identified were made from the trust account without authority. He also agreed that the withdrawals on 14, 15, 16, 24 October and 25, 26 November and 6, 9 and 13 December were also without authority. He agreed that the making of withdrawals in those circumstances was prohibited under the Legal Profession Act and Regulations being the withdrawals from automatic teller machines. He agreed that the total of unauthorised withdrawals was in an amount of $17,760.30. He also said that there could have been further unauthorised withdrawals. These admissions reflect an understanding at least at the date of interview that the withdrawals were prohibited. Most relevantly when asked when he first started making withdrawals from the trust account at automatic teller machines, Mr Ashworth was aware that these were prohibited in any circumstances under the Legal Profession Act and Regulations. He admitted that he was.
On the basis of these admissions the Tribunal is satisfied that Mr Ashworth had the knowledge, belief or intent required to render the withdrawals dishonest. We have no doubt that Mr Ashworth acted with "subjective" dishonesty. He was on his admission entirely aware of his obligations with respect to the maintenance of the trust account and the circumstances in which money might be withdrawn but converted funds the subject of unauthorised withdrawals to his own use on over forty occasions.
We are satisfied to the higher standard of probability required by reason of the gravity of the allegations that a finding of deliberate dishonesty is appropriate in this case.
As to the third part of the formulation, considering the totality of the evidence, we conclude that each of the withdrawals by which the proceeds were converted to Mr Ashworth's own use were objectively dishonest according to the standards of ordinary, decent and honest people.
The moneys were and Mr Ashworth knew them to be trust moneys. He knew that he was not lawfully entitled to the moneys. He had not issued an invoice to his client for costs. He had an understanding of the statutory obligations pertaining to the operation of trust accounts and he was aware that a client's authority was required to withdraw funds and that he did not have it. The withdrawal was not otherwise authorised. Mr Ashworth applied the moneys to his own purposes for his personal benefit and to the exclusion of the client for whose benefit they were held. By his own admission, Mr Ashworth intended to engage in the withdrawals. He did so from automatic teller machines. Any competent solicitor would and indeed Mr Ashworth himself did recognise that his conduct was wrongful.
Applying the formulation set out in Peters and restated in Brereton, we are satisfied that the allegation of misappropriation has been established.

Breach of s 255 of the Legal Profession Act

The Law Society also seeks a finding that Mr Ashworth "wilfully" breached s 255 of the LPA which provided: "255 Holding, disbursing and accounting for trust money (1) A law practice must: (a) hold trust money deposited in a general trust account of the practice exclusively for the person on whose behalf it is received, and (b) disburse the trust money only in accordance with a direction given by the person. Maximum penalty: 50 penalty units. (2) Subsection (1) applies subject to an order of a court of competent jurisdiction or as authorised by law. (3) The law practice must account for the trust money as required by the regulations. Maximum penalty: 50 penalty units."
"Law practice" was defined in s 4 of the Legal Profession Act to mean: "'Law practice' means: (a)An Australian legal practitioner who is a sole practitioner …"
Section 7(3) of the LPA provided: "3. For the purposes of this Act, a 'principal' of a law practice is an Australian legal practitioner who is (a) A sole practitioner (in the case of a law practice constituted by the practitioner)."
Mr Ashworth was the principal of Ashlaw Associates at the relevant times and thereby a sole practitioner and so falls within the definition of "law practice".
The question of what constitutes "wilfulness" in the contravention of a statutory provision was considered by the Administrative Decisions Tribunal in Council of the Law Society of New South Wales v Halligan [2009] NSWADT 317 at [64] by reference to the decision of the New South Wales Court of Appeal in Re Mayes and the Legal Practitioner's Act [1974] 1 NSWLR 19 saying at [53]: "53. … in that case, the Court, constituted by Hardie, Reynolds and Hutley JJA confirmed a decision of the Statutory Committee under the Legal Practitioners Act 1898 that a solicitor who failed to supervise the activities of his partner with regard to the firm's trust account, thereby enabling the partner to misappropriate substantial amounts of money belonging to the firm's clients, was guilty of professional misconduct. 54 All three members of the Court held that this behaviour involved 'wilful' contravention of provisions of the 1898 Act similar to subsections (1) and (2) of section 61 of the LP Act 1987 and was therefore statutory misconduct under a provision similar to subsection (8) of section 61. 55 On this matter, Hardie JA said (at 21-22):- It is well settled law that there can be wilful failure within the meaning of the section without any positive intention to breach the law; breaches committed over a period of time can, in the light of the relevant circumstances, be so substantial and reckless and show such complete indifference on the part of the solicitor to his important obligations to his clients and to the public, as to amount to wilful failure:… It is true that the solicitor did have complete trust in his partner. However, in the special circumstances of this case, I am satisfied that the existence of that trust was accompanied by a complete indifference on the part of the solicitor as to the performance of his statutory obligations in relation to the trust account. The matters brought to his notice over a period of years were such that failure to inquire and ascertain what was happening in relation to the trust account was, under the circumstances, recklessly careless and properly found to constitute wilful failure within the meaning of the section. 56 In their joint judgment, Reynolds and Hutley JJA held that the solicitor was also guilty of professional misconduct at common law (this being a matter on which Hardie JA expressed no opinion). It is sufficient here to quote the following short extracts from the joint judgment, at 25-27:- It is no answer for the appellant to claim that he left the conduct of his financial affairs of the firm to his partner. It would be no answer generally and certainly not in this case where the appellant neglected his responsibilities despite warnings that all was not well. The overall disregard of the obligations to the Law Society of a solicitor, those obligations being laid down for the protection of the general public who deal with solicitors, is in this case in our opinion so gross as to amount to professional misconduct at common law. Wilful misconduct can be established by evidence that a person acts with reckless carelessness, not caring what the results of his carelessness may be. [The solicitor's] failure was wilful, despite his personal innocence."
The Tribunal in The Council of the Law Society of New South Wales v Hussein [2010] NSWADT 182 upon analysis of the relevant authorities dealing with what constituted a "wilful breach" said at [65]: "The cases require examination of solicitor's state of mind, knowledge and intention at the time of the alleged breach."
The Tribunal found at [66] that it was satisfied that by his conduct in releasing funds, although in that case motivated by compassion for the circumstances of another, the "solicitor demonstrated a reckless indifference to his obligations under s 61 and s 62 of the Act." The Tribunal was comfortably satisfied that the complaints had been made out, finding that the requirement of wilfulness could be satisfied by conduct which is reckless or indifferent.
By letter dated 30 October 2014 to the Society which was in evidence, Mr Ashworth stated the following: "To be guilty of breaches of LPA 255, 262, 263 & 264 the conduct has to be wilful. Without dwelling on the definitions and observing that wilful at law generally means 'deliberate' as distinct from 'accidental' (I am aware that the test is objective) it is broadly my case that those alleged breaches occurred last year incidentally to and during a period of serious mental illness I was suffering. During the periods of July/August and around October last year I was also under considerable extortionate pressure from criminal elements but I cannot prove that."
As we have indicated, Mr Ashworth did not appear at the hearing. Nor did he seek to tender any evidence which would support the asserted serious mental illness or the "extortionate pressure from criminal elements" to which he refers. Nor did he make submissions as to how such matters would justify a finding that the alleged breaches were not "wilful". They could not have been "accidental" as he suggests. We have found that Mr Ashworth deliberately withdrew money from the automatic teller machine on each occasion knowing that he was not entitled to them. We are satisfied on the basis of the material in evidence before us that the failure to hold trust money was wilful.
We are satisfied to the requisite standard upon the basis of the evidence to which we have referred, including the admissions by Mr Ashworth, that in the respects referred to he has wilfully failed to hold trust money deposited in the general trust account of the practice exclusively for the person on whose behalf it has been received and to disburse the trust money only in accordance with the direction given by the person. He was aware of his obligation to do so. In this regard, we find that the law practice has wilfully breached s 255 of the LPA.

Breach of section 263 of the LPA

The Society seeks a finding of a breach of s 263 of the LPA. This provided: "263 Reporting certain irregularities and suspected irregularities (1) As soon as practicable after a legal practitioner associate of a law practice becomes aware that there is an irregularity in any of the practice's trust accounts or trust ledger accounts, the associate must give written notice of the irregularity to: (a) the Law Society Council, and (b) if a corresponding authority is responsible for the regulation of the accounts concerned-the corresponding authority. Maximum penalty: 50 penalty units. (2) If an Australian legal practitioner believes on reasonable grounds that there is an irregularity in connection with the receipt, recording or disbursement of any trust money received by a law practice of which the practitioner is not a legal practitioner associate, the practitioner must, as soon as practicable after forming the belief, give written notice of it to: (a) the Law Society Council, and (b) if a corresponding authority is responsible for the regulation of the accounts relating to the trust money concerned-the corresponding authority. Maximum penalty: 50 penalty units. (3) An Australian legal practitioner is not liable for any loss or damage suffered by another person as a result of the practitioner's compliance with subsection (1) or (2)."
Section 6 of the LPA 2004 "legal practitioner associate" of a law practice means an associate of the law practice who is an Australian legal practitioner; "associate" of a law practice means a person who is one or more of the following- (a) a principal of the law practice; (b) a partner, director, officer, employee or agent of the law practice; (c) an Australian legal practitioner who is a consultant to the law practice;"
Accordingly, Mr Ashworth was a legal practitioner associate within the meaning of s 263. We are satisfied on the basis of the evidence to which we have referred including his admissions that Mr Ashworth was aware of the irregularity in the practice's trust account by his unauthorised withdrawal of moneys from time to time. In each instance he failed to given written notice of the irregularity to the Law Society Council as soon as practicable in breach of s 263(1). The irregularities were only discovered upon enquiry by the Society in June 2014 about outstanding trust account statements. There is no evidence that the failure was intentional. However, we are satisfied that Mr Ashworth a legal practitioner associate of Ashlaw Associates was at least reckless or indifferent to compliance with s 263 in which event such failure was also wilful within the meaning identified in Mayes and Hussein.

Breach of section 264 of the LPA

The Society seeks a finding of breach of s 264 of the Legal Profession Act which provided: "264 Keeping trust records (1) A law practice must keep in permanent form trust records in relation to trust money received by the practice. Maximum penalty: 100 penalty units. (2) The law practice must keep the trust records: (a) in accordance with the regulations, and (b) in a way that at all times discloses the true position in relation to trust money received for or on behalf of any person, and (c) in a way that enables the trust records to be conveniently and properly investigated or externally examined, and (d) for a period determined in accordance with the regulations. Maximum penalty: 100 penalty units."
Mr Fairbairn gave evidence that he had a telephone conversation with Mr Ashworth on 24 June 2014. Mr Fairburn advised Mr Ashworth that he had not completed his Law Practice Declaration Statements for the trust period to 31 March 2014 and that his trust records had not been the subject of external examination. Mr Ashworth replied that his trust records were not up to date and that he owed his bookkeeper money. He believed that the trust account had a nil balance at the end of March 2014. He said that the external examiner had not been paid for the 2012/2013 examination.
There was also in evidence an email from Mr Ashworth to Mr John Mitchell the Chief Trust Account Inspector of the Society dated 30 June 2014 which reads in part: "In addition I have not complied with my obligations to the Law Society including completing MCLE units and submitting annual declarations. I have not been able to afford to have my bookkeeper and accountant prepare statements and my trust account has not been audited (no funds currently held in trust)."
We are satisfied on the basis of the evidence to which we have referred including the admissions which he has made that Mr Ashworth as principal of the law practice failed to keep in permanent form trust records in accordance with the regulations for the relevant period in breach of s 264 of the Legal Profession Act. There is evidence which we accept that Mr Ashworth was aware of his obligations under s 264. We find that this failure was accordingly wilful.

Failure to refund trust moneys

The Law Society also seeks a finding that Mr Ashworth failed to refund moneys held in trust. Again we are satisfied by the evidence including Mr Ashworth's own admission that although $17,760.30 was taken by him from the trust account in the period referred to a total of $9,136 only has been repaid. Taking into account those repayments and the invoices subsequently rendered in the matters of Pearce, Treminio and Bebonis there remains a deficiency of $1,983.55. We find that Mr Ashworth has failed to refund moneys held in trust including in the matter of Waterlow

Failure to provide accounts

Lastly, the Law Society seeks a finding that Mr Ashworth failed to provide a detailed account. Mr Ashworth admitted in the record of interview that "the trust account records are not up to date. I am now unravelling them. They are a bloody mess." He admitted that there could be a further deficiency "but I don't know as the bookwork is not completed". He also admitted that "there could be further unauthorised withdrawals but the $17,760.30 is easily and readily identified by me." These admissions justify a finding that Mr Ashworth has failed to provide a detailed account.

Professional misconduct

The Society alleges that Mr Ashworth has been guilty of professional misconduct. Section 497 of the Legal Profession Act provided: "497 Professional misconduct (1) For the purposes of this Act: "professional misconduct" includes: (a) unsatisfactory professional conduct of an Australian legal practitioner, where the conduct involves a substantial or consistent failure to reach or maintain a reasonable standard of competence and diligence, and (b) conduct of an Australian legal practitioner whether occurring in connection with the practice of law or occurring otherwise than in connection with the practice of law that would, if established, justify a finding that the practitioner is not a fit and proper person to engage in legal practice. (2) For finding that an Australian legal practitioner is not a fit and proper person to engage in legal practice as mentioned in subsection (1), regard may be had to the matters that would be considered under section 25 or 42 if the practitioner were an applicant for admission to the legal profession under this Act or for the grant or renewal of a local practising certificate and any other relevant matters."
Section 498(1)(a) provided: "498 Conduct capable of being unsatisfactory professional conduct or professional misconduct (1) Without limiting section 496 or 497, the following conduct is capable of being unsatisfactory professional conduct or professional misconduct: conduct consisting of a contravention of this Act, the regulations or the legal profession rules,"
As the Law Society has pointed out, the statutory definitions of professional misconduct are inclusive meaning that regard might be had to the common law for guidance. At common law professional misconduct includes conduct in pursuit of professional activities which would reasonably be regarded as disgraceful or dishonourable by professional colleagues of good repute and competency, see Council of the New South Wales Bar Association v Sahade [2007] NSWCA 141 at [54] (per Basten JA). In that decision the Court noted the adoption for legal practitioners of the test propounded in Allinson v General Council of Medical Education and Registration [1894] 1 QB 750 at [763] for medical practitioners. In Allinson, Lopes LJ put it in this way: "If it is shown that a medical man, in pursuit of his profession, has done something with regard to it which would be reasonably regarded as disgraceful and dishonourable by his professional brethren of good repute and competency, then it is open to the General Medical Council to say that he has been guilty of 'infamous conduct in a professional respect'".
As the Law Society also submitted, the wide breadth of the concept might be observed from the judgment of McClellan CJ at CL in Bechara v Legal Services Commissioner [2010] NSWCA 364 at [44] in which his Honour said: "44. As Klein [Klein v NSW Bar Association (1960) 104 CLR 186] made plain, there are no fixed categories of professional misconduct. Much depends on whether the conduct falls outside 'generally accepted standard[s] of common decency and common fairness'."
In this instance as we have said the trust account remains in deficit in an amount of $1,983.55. In considering whether the conduct constitutes professional misconduct the fact that money has been repaid or that ultimately the clients suffered no loss is irrelevant in determining whether the conduct constitutes professional misconduct; see Council of the Law Society NSW v Pizzinga [2012] NSWADT 211.
Ridge J in Kennedy v Council of the Incorporated Law Institute of New South Wales (1939) 13 ALJ 563 considered the parameters of a charge of misconduct saying: "… a charge of misconduct as relating to a solicitor need not fall within any legal definition of wrongdoing. It need not amount to an offence under the law. It was enough that it amounted to grave impropriety affecting his professional character and was indicative of a failure either to understand or to practice the precepts of honesty or fair dealing in relation the courts, his clients or the public. The particular transaction the subject of the charge must be judged as a whole and the conclusion whether it betokened unfitness to be held out by the court as a member of the profession in whom confidence could be placed, or on the other hand, although a lapse from propriety, was not inconsistent with general professional fitness and habitual adherence to moral standards, was to be reached by a general survey over the whole transaction."
The misappropriations were numerous and occurred over several months. Sometimes they occurred on the same day. There were also breaches of the LPA enacted to maintain and regulate the lawful operation of trust accounts.
In the Law Society of New South Wales v Jones [unreported Court of Appeal (NSW) 27 July 1978] Street CJ with which the other members of the Court agreed said: ""Reliability and integrity in the handling of trust funds are fundamental prerequisites in determining whether an individual is a fit and proper person to be entrusted with the responsibilities belonging to a solicitor."
Judged as a whole we are satisfied that Mr Ashworth's conduct is inconsistent with general professional fitness and habitual adherence to moral standards. It reflects a failure to practice the precepts of honesty and fair dealing in relation to the clients and the public. We are satisfied that the conduct amounts to a grave impropriety affecting Mr Ashworth's professional character. There was no evidence to the contrary.
The finding which we have made as to misappropriation which upon the basis of his admissions includes an element of subjective dishonesty justifies a finding that Mr Ashworth is not a fit and proper person to engage in legal practice within the meaning of s 497(1)(b) of the LPA and accordingly that he is guilty of professional misconduct.
The misappropriation which we have found is also conduct which in our view would reasonably be regarded as disgraceful and dishonourable by his professional brethren of good repute and competency and justifies a finding of professional misconduct at common law.
The conduct is compounded by the findings as to breaches of ss 255, 263 and 264 of the Legal Profession Act, Mr Ashworth's failure to refund moneys in trust and his failure to provide a detailed account. These are individually capable of constituting unsatisfactory professional conduct or professional misconduct.. In our view the continuing repetitive breaches of ss 255 and 263 which we have found to be wilful, the breach of s 264, the failure to refund trust moneys in full and the failure to provide accounts taken collectively also justify a finding that Mr Ashworth is not a fit and proper person to engage in legal practice within the meaning of s 497(1)(b) of the LPA that he is guilty of professional misconduct. The failures would also be conduct reasonably regarded as disgraceful and dishonourable by his professional brethren such as to justify a finding of professional misconduct at common law.

Mr Ashworth's position

Mr Ashworth filed no evidence. There was in the Society's case some evidence in the form of the signed record of interview to which we have referred and other documents forwarded by Mr Ashworth to the Society which although not admissible as statements of the truth of their contents were nevertheless put forward by Mr Ashworth, at least to the Society, as relevant matters for consideration. The record of interview reads relevantly as follows: "I [Peter Edwards] said: What were the circumstances of this withdrawal [16 July 2013]? He [Garry Ashworth] said: I needed money for drugs, cocaine and ice. … I said: What were the circumstances of these withdrawals? [17 July 2013] He said: The same as before. I was in a relationship with a woman who was also taking drugs. I was at the time heavily addicted to ice, and [sic] amphetamine. I said: … What were the circumstances of these withdrawals? [18 July 2013] He said: The same … I said: The next withdrawals are on 19 July 2013 … What were the circumstances of these withdrawals? He said: The same, I needed the money for drugs. I said: Did you have any other funds available at the time? He said: No. At the time my general bank account on 24 July 2013 was in debit $5,469.58. I said: … What were the circumstances of these withdrawals? [5 August 2013] He said: The same, drugs. I said: At the time of the first unauthorised withdrawal on 16 July 2013, what was the position with your practice? He said: I was still trying to work. At the end of June I got involved with a woman who got me into drugs. I said: Where were you living at the time? He said: At [address supplied] McLaren Street, North Sydney. I was paying rent of $3,000/month. I split up with my partner at Christmas 2012. We were living together at the same apartment building. I moved from my partner's unit to number [number supplied] on Australia Day 2013. From the point of our separation onwards, my personal and professional position deteriorated. My work entailed mostly family and criminal law. My net income was about $100,000 per annum until my personal life deteriorated. […] I said: What were the circumstances of these withdrawals? [16 and 30 August 2013] He said: By early July 2013, I had taken up with a woman, she moved into my unit and I was drinking. My depression was becoming unmanageable. I saw a doctor and he prescribed medication. … I had no income from July 2013 as I was incapable of working. I have no gambling problems nor had at any time … He said: Yes I cleaned up my act after 30 August 2013 for the month of September when I got rid of the girlfriend but she resurfaced later. By this stage I had no money. Through September 2013 I was seeing my GP and he suggested a referral to a psychiatrist but I had no money. I was also referred to a Drug and Alcohol Counsellor but it took me until 19 November 2013 to see him, Dr Hardie. … On 14 October 2013 I made a further eight withdrawals without authority from the trust account. It was my birthday. I went to a party at Kings Cross and my rent was also due at the time. I knew it was wrong but I was under pressure from a criminal element at the time. … He said: … I also withdrew from the trust account without authority $100 on 15 October 2013. The context here is I have no other money. … Further unauthorised withdrawals were made by me from the trust account being … and $15.80 on 13 December 2013, the last one for $15.80 being at the Rag & Famish Hotel which I think was for three beers. My ANZ eftpos card operated both my trust account and my general account. … He said: … The trust account bank statements also show a withdrawal of $2 on 31 January 2014 which was when I went to an ATM for a balance inquiry. At the time I still had a serious drug problem with both alcohol and other drugs. … It was not all drugs … I said: Why didn't you report the trust irregularities to the Law Society as and when they occurred? He said: For the nine months from July 2013 I was mentally ill. I said: Do you have a medical report? He said: No but my treating specialist has said that he will provide me with one when I need it. The nature of the mental illness is depression and anxiety caused by the breakdown of my relationship in December 2012. I then started to drink more heavily, a bottle of gin or vodka a night, and used cocaine starting about May 2013. If I had the money I could employ a bookkeeper to get the records up to date which would have made the position with the trust account clearer. I could then have reported the unauthorised withdrawals with a set of records that I could have showed the Law Society. I could ameliorate the position of the unauthorised payments by getting the records up to date."
In his email to Mr Mitchell dated 30 June 2014, Mr Ashworth said: "As outlined to Tony [Fairburn] I am recovering from a long period of illness which outline I can expand upon now. Following separation from my long term partner (after almost 10 years) on Boxing Day 2012 I became extremely depressed and anxious and began drinking too much. That alcohol use contained to accelerate apart from which I also began using various drugs and subsequently developed a heavy dependence. My drug and alcohol problems continued unabated for several months before I sought treatment and my work and practice suffered. I have barely worked since about mid October and what work I have done has primarily been attending to 'finishing off' what surviving family law files I had and a handful of small local court criminal matters a couple of them on a pro bono basis. I had virtually no income from about October 2013 to May living firstly off loans from friends, credit card and savings from my then small superannuation payout. When those funds were exhausted I was supported by my father and sister until Centrelink payments began in May. I was hospitalised with an infection in Sydney in early April and upon my release and after rehabilitation later that month went to stay with my sister and her husband in the Newcastle area. I registered with Centrelink and have been receiving $519 per fortnight (New Start Allowance). I had a medical certificate which exempted me from work until the close of May. I am receiving treatment inter alia from Dr Mark Hardie [details given] or Sydney Clinic College [details given]. I relocated to the below country address about 7 weeks ago where I am living indefinitely with my elderly Dad. I am now fit and well clean and sober and looking for work. My next appointment with Dr Hardie is 29 July 2014. My health issues and lifestyle particularly over the past 12 months have decimated my life and my law practice. I failed to lodge a BAS Statement since I think September last year (but noting I have done negligible work since then). In addition I have not complied with my obligations to the Law Society including completing MCLE units and submitting annual declarations. I have not been able to afford to have my bookkeeper and accountant prepare statements and my trust account has not been audited (no funds currently held in trust). I am also in arrears with the funder of my professional indemnity insurance premium for this financial year (I think one instalment). At the time of writing I have not applied to renew my practising certificate or PI insurance for 2014-2015 because I do not have the necessary funds. I am surviving on my Centrelink income which while I am not paying rent is only enough to feed me and keep my telephone and internet services alive. I have made employment related inquiries with the local law firms one of which I had previously worked for about 5 years. There are currently no positions available and the response from those principals generally indicated that any work they might source from me would need to be done 'under my own steam' i.e. as an unrestricted principal. Clearly I need to work to raise the necessary funds to resurrect my life and practice and to service a large amount of personal debt including business creditors, loans from colleagues, family and friends and the ATO. I am determined not to go bankrupt. I have been actively searching for work for the last month. I am prepared to do anything at all. Apart from formal qualifications and experience as a lawyer and teacher I have in the past worked as a licensed carpenter and still have those skills. I can drive tractors, work with stock and dig posts holes but although I have many contacts here in my home town and the surrounding district there is nothing going right now. I am involved with the local golf and tennis clubs and have been doing a little charity and volunteer work including pro bono court work (when practising I averaged 4 hours pro bono every week). So things are crook. I am however ready to work again and of course seek to continue as an unrestricted principal and re-establish my practice. To that end I seek advice from the Law Society as to what if any waivers, exemptions, extensions etc may apply or be available to me while I figure something out."
A medical report was also submitted by Mr Ashworth to the Society. It is from Dr Mark A Hardie and dated 19 August 2014. Dr Hardie states that he is a Consultant Specialist in addiction medicine. He gained his primary medical degree from the University of Sydney in 1988. He has completed a Fellowship of the Australian Chapter of Addiction Medicine within the Royal Australasian College of Physicians in 2011. He is a staff specialist in addiction medicine at Royal Northshore and Manly Hospitals. He is a visiting medical officer, specialising in addiction medicine at the Sydney Clinic and Mosman Private Hospital. He consults to the Kedesh (Phoenix) Rehabilitation Service in Manly. He stated that he is familiar with the Local Court, District Court and Supreme Court Code of Conduct for Expert Witnesses and agreed to be bound by it.
Dr Hardie stated that as a Consultant Specialist in addiction medicine he is qualified to give expert medical opinions on matters of substance dependence as well as inter-current medical and psychiatric disorders including acquired brain injury, hepatitis C, major depression, post-traumatic stress disorder, schizophrenia, personality disorders, drug induced delirium and drug induced psychosis. He is an accredited medical practitioner for assessment of suitability of patients for involuntary treatment under the Drug and Alcohol Treatment Act (2007).
Dr Hardie stated that up to the date of his report he has managed Mr Ashworth's care since first meeting him on 19 November 2013 in the context of assessment and treatment of poly-drug and alcohol dependence. He states that Mr Ashworth had three main problematic areas of addiction being: "a. Alcohol: first use at 18, problematic at 52. He consumed between 100 gram to 400 gram (10-40 standard drinks) per day. The preceding 9 months had been the most difficult. However he described a considerable abstinence period of 6 to 7 months in 2007. His drinking would commence after completing work, usually after 4.00 pm, if there were no afternoon clients, or later if there was. b. Cannabis: first use at 18, problematic soon after. He continued to smoke two joints per day, approximately a quarter to half of a gram per day. c. Amphetamines: first use at 29, problematic soon after. Intravenous use; he continued to inject two to three points (0.2 - 0.3 grams per day) up until the time of assessment. He became dependent upon amphetamines after detoxing from heroin, which he had used in his young adulthood, with his first wife."
Dr Hardie identified a number of significant stressors described by Mr Ashworth including: 1. Separation from his partner on 26 December 2012. 2. Losing most of his business to drug use. 3. Deteriorating relationship with his children. 4. His first wife still uses drugs (mainly heroin).
He has other medical history including major depression and is on an anti-depressant, a hiatus hernia and hepatitis C (eradicated via anti-viral treatment).
On examination, Mr Ashworth was found to be co-operative in good mood and with normal and reactive affect. There was no evidence of psychosis. In Dr Hardie's view Mr Ashworth had good insight into his problems.
In Dr Hardie's opinion substance dependence states are chronic, relapsing, remitting conditions. He stated that over time with careful management relapses tend to decrease and periods of sustained abstinence tend to extend. He stated in the context of mental health co-morbidity, those who seek treatment for both are likely to do very much better than if either condition is managed at the exclusion of the other. In his opinion, Mr Ashworth had adopted a reasonable approach of co-managing his dependence and other conditions, rather than to address them separately. In his view this vastly improved Mr Ashworth's chances of success.
Dr Hardie gave details of access to treatment services including urgent admission to offset any future potential lapses. He noted that prior to diagnosis and treatment, Mr Ashworth was self-managing with little treatment support. He said that Mr Ashworth has expressed to him sincere regret in respect of his current situation and the trouble it has caused. It was Dr Hardie's opinion that this reduced his chances of relapse and improved the chance of success in his endeavour to maintain long term abstinence.
Dr Hardie noted that Mr Ashworth was subsequently admitted to Royal North Shore Hospital in April 2014 with a complicated wound infection arising from sustaining a leg laceration. He underwent detoxification from alcohol and other drugs at that time. Mr Ashworth commenced follow up treatment in May 2004 in the form of a brief cognitive-based intervention for dependence. He was last seen by Dr Hardie (by reference to his report) on 29 July 2014 and he spoke with him on 19 August 2014. Dr Hardie stated (at the time of his report) Mr Ashworth had remained clean and sober.
In Dr Hardie's opinion, given the severity of the conditions which he had described and which he stated were recognised mental illnesses, he believed it appropriate that ongoing registration be allowed unrestricted on condition that he adhere to a strict treatment plan. The treatment plan that he recommended was in the following terms: 1. Ongoing attendance and counselling with Dr Hardie and medications prescribed by Dr Hardie as he requires; 2. Medical examinations and special tests as Dr Hardie requires including but not limited to urine drug screening; 3. Ongoing pharmacological therapy, selective management of amphetamine, cannabis and alcohol dependence; including, but not limited to inpatient or outpatient detoxification, should he lapse; 4. Specific counselling for major depression; 5. Possible long term residential rehabilitation at a facility recognised for the purposes of drug treatment, drug education and relapse prevention at Dr Hardie's discretion; 6. Attendance at group therapy including but not limited to 12 Step Programs, Smart Recovery or other groups as Dr Hardie deems necessary; 7. Regular ongoing engagement of Dr Hardie's services for a minimum of a further 12 months.
In a letter to the Society dated 30 October 2014, referring to Dr Hardie's report, Mr Ashworth says that he remains clean and sober and in exceptionally good health. He does raise issue with some matters in Dr Hardie's report. He says that it is inaccurate to perceive that he ever drank on a daily basis between 10 and 40 drinks. He said that during the 9 months preceding and during the early part of his attendance upon Dr Hardie in 2013 he was drinking very heavily. He said that the period of abstinence described as being in 2007 is inaccurate. He recalled being sober for about 3 to 4 months after that period in about mid-2008.
He said he had not smoked any cannabis since some time in 2013 which he does not recall.
He said that it is incorrect to say that he injected 0.2 - 0.3 grams of amphetamines per day since 1982. His instructions to Dr Hardie were that heavy use of amphetamines occurred through much of 2013 only in addition to cocaine use.
Mr Ashworth said that he attended further sessions with Dr Hardie in May and July 2014 and has undertaken to participate with the regime described in paragraph 13 of the report if necessary whether he continues to practice law or not.
Mr Ashworth explains his conduct in the following terms: "The real damage done during my demise last year was due largely to me forming a relationship with a particular woman. I met her while I was suffering addiction, depression and anxiety following the breakdown of my long term relationship around Christmas 2012. She beguiled me and I fell in love with her. She has a heavy intravenous drug user and seemed to be very connected in drug circles. What I didn't realise at first was that she was part of a criminal enterprise (an outlaw motor cycle gang) and once my addiction was rife and I had run up significant debt her associates began to threaten and extort me. She was aware that I had control of the trust account and I was pressured to borrow from it. I was at all times by then in the grip of a shocking addiction. Then it was too late."
Mr Ashworth's states: "I am not intrinsically a bad person. As outlined above I have had problems with alcohol and other drugs from time to time in my life and occasionally those problems have been acute enough to land me in trouble. I have consequently had two failed 'marriages' behind me. However I have no history of violence or deceit and until Ms Waterlow lodged her unnecessary complaint with OLSC in August this year I had been practising 11 years (the last 7 on my own account) without any 'client problem'. I had never let a client down and never stuffed up a matter. I am a person who is always willing to help people and have all my adult life been involved in community organisations often serving on boards and holding executive positions. Apart from charging generally low rates for my professional work I have always been willing to do legal aid and pro bono work. I have done more pro bono over the years than any solicitor I know." He continued: "The public do not need to be protected from me and apart from some close family members and a couple of friends and now necessarily the attached referees nobody outside the Law Society is aware of what has happened. I am now 6 months clean and sober the longest such period of my life. I am determined to continue and apart from the obvious financial imperative I need to get back to work while I still have the skills and knowledge to be effective and sort things out. Should I be punished for having been ill and if so forever."
There were attached to Mr Ashworth's letter references from his father, a justice of the peace, a friend and client, a chartered accountant, a barrister, clients and a solicitor. These generally spoke of the referees' awareness of disciplinary matters facing Mr Ashworth, his history of drug and alcohol addiction and as to their view of Mr Ashworth's character, honesty, trustworthiness and capacity as a lawyer.
We have had regard to this material tendered as it was in the Law Society's case and going to matters which Mr Ashworth could have put to the Tribunal by way of direct evidence had he wished to do so but chose not to.

Consideration and appropriate orders

Where the issue is one of the misuse of entrusted funds by a solicitor the New South Wales Court of Appeal in Dupal v Law Society of New South Wales [unreported, Court of Appeal, 26 April 1990 - NSW Law Society Journal, Supplement, September, 1990, p 60] per Kirby P (as he then was) said (at p 3): "… (the) normal consequence of the misuse of entrusted funds by a solicitor and the finding of wilful breaches of the statutory prohibition in that regard, is the removal of the name of the solicitor from the roll."
Handley JA in the same case at p 64 put it in this way: "This Court would be departing from a long course of authority if it were to allow the appeal and substitute a period of suspension for the order of the Tribunal removing the appellant from the roll. Counsel were not able to refer me to any case where a solicitor found guilty of misappropriation or wilful contraventions of s. 41(1) has not been struck off the roll. Any decision to the contrary would signal to the profession and the community that this Court was no longer insisting on solicitors maintaining the highest standards of personal honesty and integrity in their dealings with clients and the public and in the handling of moneys entrusted to their charge."
In Dupal, the Society established misuse by Mr Dupal of the moneys received by him on behalf of other persons (namely his sister and when she called for repayment of moneys taken) another trust. The sum involved (in 1982) was $80,000. There were some favourable aspects of Mr Dupal's conduct including his frankness and candour in his evidence before the Tribunal and dealings with the Law Society and expression of genuinely felt contrition and remorse, the fact that full restitution had been made and what was described as an "impressive" character evidence from practitioners of good standing and eminence who had personal knowledge of and contact with Mr Dupal when was in practice. The Court of Appeal found that the misappropriations were associated with or in due course resulted in the production of false records and attempts to deceive the Law Society involving deliberate lies and the subsequent preferring of the solicitor's interest to his duty which continued for some time after his dealings with the Law Society began. Complete restitution was not made until 5 years after misappropriation of the funds commenced.
The Law Society in its submissions referred us to several authorities where after a finding of misappropriation the solicitor in question had not had his or her name removed from the roll. The facts in those cases do not in our view bare such a similarity with the factual circumstances of this matter so as to justify a departure from the general principle outlined in Dupal.
In Law Society of New South Wales v McNamara [2007] NSWADT 162 there was a course of dishonest conduct over a period of 11 months where the solicitor misappropriated funds given to him by clients on twenty-four occasions totalling $5,227.50. There was one testimonial by way of mitigation from the solicitor's wife and none from any fellow practitioner or former clients or other associates. The moneys had been repaid in full by May 2006 shortly after misappropriations were discovered.
The Tribunal was satisfied as to the solicitor's genuine remorse noting, that he had received ongoing treatment for a depressive illness and then secured further employment. The Tribunal accepted that the solicitor had already been severely punished in a financial, personal and professional sense. The Tribunal at [108] distinguished the gravity of the offence in Dupal finding that Mr McNamara's established contrition made it comfortably satisfied that he was not permanently unfit to practice. At [109], the Tribunal found that based on the evidence from the solicitor and his treating doctor it was satisfied that Mr McNamara was a person who if faced with the same professional difficulty again would take a different course.
In McNamara the Tribunal also considered submissions by the Law Society concerning circumstances in which the Tribunal had determined not to strike off a solicitor for misappropriation saying at [30] - [33]: "30 We note that in Goold, the Tribunal was concerned with a solicitor who in circumstances of significant personal stress, misappropriated moneys totalling $1,500 that he received from a client on account of costs due to the firm that employed him. The Tribunal determined that this single instance of professional misconduct, which the Solicitor admitted, did not necessitate the making of a striking off order. It accepted that the Solicitor had been contrite and ashamed and noted that his employer spoke highly of his competence and integrity. It ordered that his practising certificate should be restricted for a period of three years, preventing him from practising as a principal, and that he pay a fine of $10,000. 31 We further note that in Penfold, the Tribunal took into account that the theft was of a relatively small amount and noted that, although $6,000 was misappropriated, less than $2,500 had been paid by the Solicitor to his own purposes. There was no compounding of that theft by other thefts from other clients to make good the theft from the first client. By the day of confession almost half the money had been repaid and the remainder of the debt to the client was paid within a further eight months. The Solicitor satisfied the Tribunal of his genuine remorse. Further, the Solicitor was bankrupt and virtually unemployed; he had previously been able to make no reserve provisions for his family; the family home had been sold and his personal life and that of his family is deeply affected. It stated: … the tribunal is inclined to ask the question, as did James QC in the matter of Jauncey , "should the Solicitor be given a sentence of 'professional death'"? It is clear that, if our task be merely punitive, then there would be no question of what the Tribunal would wish to do. The Solicitor has already been severely punished in a financial, personal and professional sense, and further punishment would seem to serve little purpose. But the law is that the public must be protected and the various decisions quoted to the Tribunal in argument are replete with those observations. The closing words of the Judgment of Starke J in ex parte Lenehan at page 431 are as clearly in point as any. His Honour, having resolved that Lenehan (contrary to the majority decision) should not be re-admitted, observed that the New South Wales Supreme Court was right in concluding that: … it would be guilty of dereliction of duty if it were to admit the appellant, tainted as he is, as a fit and proper person to be enrolled as a solicitor of the Court and to stand in the ranks of an honourable profession to whom the public might resort or assist in the conduct and management of their affairs with confidence and security. 32 In Peck, the Solicitors Statutory Committee stated: The Committee finds that the Solicitor has been guilty of professional misconduct and that he is not a fit and proper person to practise as a solicitor on his own account. Having regard to the frankness with the Law Society and this Committee and his contrite approach the Committee finds that after a period of suspension he will be a fit and proper person to practise as an employed solicitor. 33 The Committee ordered that Colin Walter Peck be reprimanded and suspended from practice for a period of two years."
In the matter of Colin and Walter Peck [Statutory Committee 23 April 1981] the underlying event was singular. This is to be contrasted with Mr Ashworth who has admitted making unauthorised withdrawals over a period of some months. Referring to Peck, Kirby P said in Dupal (at p 3): "I regard to (sic) the decision in Peck, which is not a decision of this Court, as wholly exceptional."
The decision in McCarthy concerned misappropriation of $3,000 paid to the solicitor on account of counsel's fees which the solicitor placed into his personal account. The money was subsequently paid to counsel. He had previously engaged in a similar practice. While finding misconduct, the Society was not satisfied that it was "so heinous as to render the practitioner unfit to continue to practice"; see McCarthy at [52].
In our view the authorities to are not apposite to the circumstances of these proceedings. There is no evidence on oath from Mr Ashworth before the Tribunal placing his admitted conduct into any context where its seriousness may be diminished or otherwise explained. He has had the opportunity but chosen not to go into evidence to provide any explanation for his conduct, contrition or remorse, rehabilitation or his continuing fitness to practice.
In NSW Bar Association v Meakes [2006] NSWCA 340 Tobias JA said at [70]: "70 In my opinion, the Tribunal also erred in declining to criticise the respondent's decision not to give sworn evidence at the hearing. It is true that in professional disciplinary proceedings the onus of proving of misconduct lies with the party bringing the charges and, it should be noted, a practitioner is not required to give evidence. However, as this Court observed in Coe v NSW Bar Association [2000] NSWCA 13, there is an expectation that legal practitioners will mount the witness box to provide some explanation as to their conduct, rather than simply relying on evidence from the Bar table. In Coe, Meagher JA (at [21]), with the agreement of Priestley JA, repeated with approval the following observations made by the Tribunal in that case and which are apposite to the present case: "In the circumstances where a prima facie [case] against a legal practitioner has been presented and where the practitioner wishes the Tribunal to accept an explanation as to how the conduct came about it is inappropriate and irregular for the legal practitioner to attempt to do so through submission from the Bar table. If he wishes the Tribunal to accept some explanation as to how the conduct came to take place then in our view he has an obligation to meet the situation by explanation on oath."
Although there was material in the evidence placed before us by the Society going to Mr Ashworth's explanation for the relevant conduct and his medical condition we can place no weight on that material in the absence of hearing from Mr Ashworth on oath.
If such evidence had been given in the form provided to the Society the Tribunal would have had concerns about several matters going to Mr Ashworth's fitness to practice. Firstly, is the question of self-realisation as to his wrongdoing. Mr Ashworth readily admitted the conduct breaches on investigation. That is in his favour. However, he did not disclose the breaches to the Society. They were discovered on investigation.
Mr Ashworth attributes the cause of the conduct breaches to the forming of a relationship with a woman and by reason of drug addiction and what he refers to as threats and attempts at extortion by his partner's associates. This tends to apportion blame to third parties rather than his own shortcomings. Mr Ashworth said to the Society that he had no history of deceit notwithstanding the many withdrawals which had been established.
Mr Ashworth also makes reference to Ms Waterlow's "unnecessary complaint" notwithstanding subsequently admitting the debt to her in respect of trust moneys which he had misappropriated.
Nor is there evidence of rehabilitation in Dr Hardie's report or evidence that Mr Ashworth is undertaking the treatment plan recommended by Dr Hardie by reason of the severity of the conditions which he had diagnosed as recognised mental illnesses.
In considering appropriate orders, the jurisdiction of the Tribunal is protective and not punitive. Shellar JA in Law Society of New South Wales v Bannister (1993) 1 LPDR 24 at [28] said: "When the jurisdiction of the Tribunal is invoked under part 10 … of the Act to conduct the hearing into a complaint of professional misconduct by a legal practitioner, the primary consideration is to protect the public by preventing a person unfit to practice from holding himself or herself out to the public as a legal practitioner in whom members of the public might repose confidence. The Tribunal must also act so as to deter the offender in the future and any other practitioner minded to behave in a like manner. In the case of a solicitor these elements together or separately may call for the removal of the solicitor's name from the roll or the imposition of a substantial fine."
The function is also educative. In Law Society of New South Wales v Foreman (No 2) (1994) 34 NSW LR 408 at [441] the Court referred to the importance of "publicly marking the seriousness of what the instant solicitor has done". The duty to protect the public is not confined to the protection of the public against further misconduct by the particular practitioner. It extends to protecting the public from similar defaults by other practitioners; see Law Society of New South Wales v Walsh (unreported, December 1997).
As the Law Society has submitted it is accordingly relevant to take into account the effect the orders to be made will have upon the understanding in the profession and the public of the standard of behaviour required of solicitors. The Court said in Harvey v Law Society of New South Wales (1975) 49 ALJ 362 at [364]: "The function of a Court called upon to consider an application to remove the name of a practitioner from the Roll of Practitioners is to examine the material proffered to it in order to determine whether that material establishes that the solicitor has failed, by action or inaction, to maintain in his conduct the standards required of him as a member of the profession. The Court sees the Court's duty is to ensure that those standards of the profession are fully maintained particularly in relation to the proper relationship of a practitioner with a practitioner, practitioner with the Court and practitioner with the members of the public who find the need to use the services of the profession. It is no part of that function to punish the solicitor whose conduct the Court finds to be in breach of those professional standards."
The Court of Appeal in Jones (referred to above) said (at p 10): "Members of the public, many of them wholly inexperienced and unskilled in matters of business or of law, inevitably must put great faith and trust in the honesty of solicitors in the handling of moneys on their behalf. The Courts must ensure that this trust is not replaced."
On the question of what orders should be made the Civil and Administrative Tribunal also said in Legal Services Commissioner v Papantoniou (No 2) [2014] NSWCATOD 141 at [11]: "11. … all proven facts and circumstances need to be taken into account. They will include the objective seriousness of the matters constituting the professional misconduct and an assessment of whether the Solicitor is presently a fit and proper person to practice law. The latter consideration requires inter alia a finding as to whether the solicitor is likely to repeat the conduct found against her or him."
In considering appropriate orders the Tribunal is bound to consider the views of the Law Society. In Re Clayton (1961) SR 132 which concerned an application under clause 19 of the then Solicitor's Practice Rules the Court said: "There is another matter for consideration, that the views of the Law Society must be given due and proper weight."
The orders sought in the application reflect the Law Society's view that the appropriate order is that Mr Ashworth's name be removed from the Roll.
The misconduct which we have found is grave. It comprises misappropriation involving subjective dishonesty on numerous occasions. It includes statutory breaches some of them also numerous. Mr Ashworth has declined to provide evidence on oath as to any context for, insight into or explanation for his conduct. Nor has he provided any evidence as to his remorse, contrition, rehabilitation or continuing fitness to practice including going to the likelihood of him re-offending. Taking into account these matters, the need to both protect the public and educate the public and the profession of the standard of behaviour required of solicitors and the views of the Law Society it is appropriate that the orders sought by the Society be made and that the solicitor's name be removed from the local roll.

Costs

The Law Society has sought an order that Mr Ashworth pay the costs of the Society as agreed or assessed.
Clause 23(1) of Schedule 5 to the CAT Act 2013 requires the Tribunal to order that the costs of the Law Society be paid by an Australian legal practitioner where a finding has been made that the legal practitioner is guilty of professional misconduct and there are no exceptional circumstances. No exceptional circumstances have been raised which would justify a different order. Accordingly there should be an order for the solicitor to pay the Society's costs of the proceedings.

The claim for compensation

In her letter to the Society dated 20 August 2014 Mrs Waterlow said: "I would be most grateful if you could assist in ensuring that I am refunded the amount of $1,075 owing to me."
There was in evidence subsequent correspondence by which this amount was reduced to $800.
In its submissions the Society stated: "A complainant, Janet Waterlow, seeks compensation in the sum of $800. That application has been deferred until the completion of the applicant's proceeding."
It is unclear whether Mrs Waterlow has made or seeks to make a formal claim for compensation and whether to the Tribunal or the Office of the Legal Services Commissioner. If a claim was made to the Tribunal before the commencement of the Uniform Law, it will be governed by the operation of Part 4.9 of the LPA. If a formal claim is yet to be made it will be governed by Part 5.5 of the Uniform Law and leave will be required; see Xie v Wen [2016] NSWCATOD 110. One matter for determination in any claim will be whether the prerequisites for the making of a compensation order are satisfied. These include whether Mrs Waterlow has received or is entitled to receive compensation under an order made by a court or from a Fidelity Fund; see s 572 LPA; s 309 of the Uniform Law. There is presently no evidence about this. Accordingly, it is appropriate to grant leave to Mrs Waterlow to list her compensation claim for directions if she wishes to proceed before the Tribunal such application to be made within 14 days and notified to the respondent.

Decision and orders 1. The respondent is guilty of professional misconduct. 2. The respondent's name be removed from the local roll. 3. The respondent to pay the applicant's costs as agreed or assessed. 4. Grant leave to the complainant to approach the Registry within 14 days to list her claim for compensation for directions on a date to be fixed.

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 11 November 2016

New South Wales Interpretation Act 1987(NSW)

(1994) 34 NSW LR 408

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