In these proceedings, the Council of the Law Society of New South Wales ("The Law Society") seeks an order prohibiting any law practice from employing or paying Berkeley Braham ("the Respondent") without the consent of the Law Society and an order that the Respondent pay its costs of the proceedings.
The prohibition order was sought pursuant to s 18 (2) of the Legal Profession Act 2004 ("the LP Act"). That sub-section provides that on the application of the Law Society, this Tribunal may make an order prohibiting any law practice (without the Law Society's consent under s 17 of the LP Act ), from employing or paying a specified person if:
1. the Tribunal is satisfied that the person is not a fit and proper person to be employed or paid in connection with the legal practice, or
2. The Tribunal is satisfied that the person has been guilty of conduct that, if the person were an Australian legal practitioner, would have constituted unsatisfactory professional conduct or professional misconduct.
S 18 (1) of the LP Act provides that the section applies to persons who are or were lay associates of a law practice or who are or were employed by that practice.
[2]
The Uniform Law
On 1 July 2015 the LP Act was repealed. The Legal Profession Uniform Law Application Act 2014 No16 ("the Application Act") and the Legal Profession Uniform Law (NSW) ("the Uniform Law") came into force in NSW on the same day. Ss 119 (1) and (2) of the Uniform Law provide as follows:
1. The designated tribunal may, on the application of the designated local regulatory authority, make an order disqualifying a person who is a person (other than an Australian legal practitioner) for the purposes of this Law, for a specified period or indefinitely, if it is satisfied that -
1. a ground for making the order under this section has been established (see subsection 2); and
2. the disqualification is justified.
1. Any of the following are grounds for disqualifying a person -
1. that the person has been convicted of a serious offence;
2. that the person is not a fit and proper person to be employed or paid in connection with the practice of law or to be involved in the management of a law practice;
3. that the person was formerly an Australian legal practitioner and has, when an Australian legal practitioner, been guilty of conduct that constituted unsatisfactory professional conduct or professional misconduct;
4. that the person has been guilty of conduct that, if the person were an Australian legal practitioner, would have constituted unsatisfactory professional conduct or professional misconduct;
5. that the person could be disqualified under sections 206C - 206F of the Corporations Act from managing a law practice if the law practice were a corporation.
Council of the Law Society of New South Wales v Braham [2015] NSWCATOD 98 | Case summary | Zoe
S 121 of the Uniform Law provides that a law practice which employs a lay associate who is a disqualified person, contravenes this section unless the lay associate has first been approved by the designated local regulatory authority. Similarly s 122 provides that a person who is a disqualified person must not seek employment as a lay associate of a law practice without first informing the law practice of the disqualification. The definition of disqualified person in s 6 of the Uniform Law includes a person who is disqualified under s 119. Under the LP Act, the definition of disqualified person included a person against whom an order under s 18 of that Act had been made.
Whilst ss 119(2) (b) and (d) of the Uniform Law replicate the grounds for disqualification found previously in ss 18(2) (a) and (b) of the LP Act, there are differences in these new provisions. First, the order under s 119 is made against the law associate personally, and not in relation to law practices generally. Secondly this Tribunal, as the designated tribunal under the Uniform Law, has the option to make the order for a specified period or indefinitely. Thirdly it must be satisfied not only that the grounds for making the disqualification order have been established, as was the case under the LP Act, but also that the disqualification is justified.
The definitions of professional misconduct and unsatisfactory professional conduct in the Uniform Law appear unchanged from the definitions in the LP Act.
Sch 9, Part, 1 cl 3(3) of the Application Act provides:
Any act, matter or thing subsisting immediately before the commencement of the 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.
Also Sch 4, Part 1, cl 2 (4) of the Uniform Law provides that:
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 adaptions.
Ms Groenwegen, who appeared for the Law Society, submitted that these provisions mean that the Law Society's Application under the LP Act is taken to have been commenced under the Uniform Law as it could have sought an order under s 119 were the Uniform Law in force at the time that the Application was filed in December 2014. We note the schedule to the Uniform Law specifies that there must be a provision in repealed legislation that corresponds to a provision of the Uniform Law. As we have set out above, s 119 of the Uniform Law is not in identical terms to s 18 of the LP Act, and in particular any order that we might make, will be against the Respondent personally and not in relation to law practices generally. Nevertheless we will proceed on the basis submitted by the Law Society, albeit with some reservations.
[3]
The Parties
The Respondent was employed as the Office Manager of the law firm known as Stuart Cook & Braham, at Tenterfield in NSW (the Law Practice") between about 2001 and 2012. Mr Roger Hardinge Braham ("the Solicitor") was the sole principal of that law practice. The Respondent is the son of the Solicitor.
[4]
Service
The Respondent did not appear at the hearing nor had he attended any of the directions hearings (in person or by telephone), nor filed a Reply or any evidence in response to the Law Society's Application. Ms Groenewegen tendered an affidavit deposing to the personal service of the Application on the Respondent and a bundle of emails and letters from the Law Society to the Respondent informing him of the date of the directions hearings and subsequently, advising him of the date of the hearing.
Ms Groenewegen also advised the Tribunal that she had left voicemail messages for the Respondent upon a mobile telephone number that she had been provided and that the answering message on the telephone was, "Hello, this is Berkeley's phone". The Tribunal was satisfied that sufficient steps have been taken to bring the hearing date to his attention and we proceeded to deal with the matter in his absence.
[5]
Conduct Relevant to the first Ground for Disqualification
The conduct of the Respondent, which was the subject of the Application before us, concerned the Estate of the late Beryl Joan Welsh. Mrs Welsh died in 2009. In 2007 she had made a will nominating the Respondent as her executor, and her son, Dennis Joseph Welsh as the sole beneficiary.
The Respondent retained the Law Practice to obtain probate and to finalise the Estate. A trust ledger - Matter #20690 Estate was opened in February 2010. Following the sale of Mrs Welsh's real estate, the proceeds were paid into that account and the ledger was used to collect the other assets of the estate and to pay liabilities. It was closed in March 2011, and the balance was transferred to trust ledger #2135 - Dennis Joseph Welsh. At that time it had a credit balance of $386,312.72.
All of these administrative steps were carried out by the Respondent in his capacity as office manager of the Law Practice. In this role he was responsible for maintaining the trust and office accounting records, including staff wage records and for effecting electronic transfers to and from the general office account of which he was a signatory. He also conducted some conveyances, general litigation and other matters under the supervision of the Solicitor. The Respondent had attended Law School and progressed some way towards his degree, but had not enrolled in any further law course subjects for some years.
The Application alleged that between September 2010 and October 2012, the Respondent forged the Solicitor's signature and drew money by way of cheques from the Trust account in matter number #2135, being the money held on trust for the beneficiary, Mr Welsh. In total the Respondent drew 55 cheques amounting to $239,227.27, thereby creating a deficiency of this amount in trust money attributable to the Estate.
Most of these cheques were for relatively small amounts - between $300 and $700 - paid approximately each fortnight to the beneficiary Mr Welsh, and apparently received by him. However there were other cheques forged by the Respondent amounting to approximately $190,000, which were drawn payable to the Law Practice, but not for the payment of fees or disbursements. There was also a cheque drawn from the trust account in favour of the OSR for $6,048.60, and another in favour of a barrister, I W Raine for $5,300. The Respondent forged the Solicitor's signature on these cheques as well. In relation to the first of these cheques, the Respondent recorded on the trust ledger the notation Pay 9158 Denis Welsh Reason Advance $6,048.
The evidence in support of all these matters was contained in the exhibits to the affidavit of John Ernest Mitchell sworn 18 December 2014. The second exhibit contained a record of interview between Mr Mitchell and the Respondent which was conducted on 28 November 2012. The Respondent was shown the trust account cheques purportedly drawn to pay costs and disbursements referred to above. The interview proceeded as follows:
Mitchell: Are these all in your handwriting?
Braham: Yes.
Mitchell: Who signed each of these cheques?
Braham: I did.
Mitchell: Dennis Welsh when interviewed on 26 November 2012 stated that he had not received a bill of costs for any of the transfers. Is that correct?
Braham: That's correct.
Mitchell: He also stated that he did not authorise the transfers. Is that correct?
Braham: That's correct.
Later in the interview when asked why he paid one of the cheques drawn purportedly for costs to the office account of the Law Practice, he said: To stop it going overdrawn I presume, and when it was put to him that he had paid in total $187,000 from the estate's funds in this manner, he said: Yeah.
Also the Solicitor was shown all of the cheques drawn on the Welsh Estate. He was able to identify the cheque signature as his on only 5 of these cheques.
In relation to the cheque drawn payable to the OSR the record of interview proceeded as follows:
Mitchell: Is that your handwriting on the cheque?
Braham: Yeah.
Mitchell: Who signed the cheque?
Braham: I did.
Mitchell: You signed the cheque as Roger Braham?
Braham: Yes.
Mitchell: The cheque is made payable to the office of, sorry, OSR. Would you explain why money from the Estate of the Late Beryl Joan Welsh has been used to pay the Office of State Revenue?
Braham: No I can't recall that, I was um um do you want some background into what around about this time and beforehand that was happening as far as medically as concern(s) me?
In relation to the cheque drawn in favour of IW Raine for $5300, the interview proceeded:
Mitchell: Is that your handwriting on the cheque?
Braham: Yes.
Mitchell: Who signed the cheque?
Braham: I presume that I did. I'm sure that I did.
Mitchell: I have been advised that the payment of $5300 relates to a barrister's fee for matter #19120 in the name of Mr Joseph Gasparin. Is that correct?
Braham: Yeah.
Mitchell: Why would you pay $5,300 from Dennis Welsh's matter for the Gasparin matter?
Braham: Again I go back to the difficulties I was having.
In the circumstances we find that the evidence supports the allegation that the Respondent forged the Solicitor's signature on each of the cheques listed in paragraph 10 of the Application, and that, except in relation to the cheques made payable to DJ Welsh or Dennis Welsh, the proceeds were misapplied, thereby causing a deficiency of trust money properly attributable to the Estate.
[6]
The Additional Ground for Disqualification
An additional ground relied upon by the Law Society was that the Respondent had a conflict of interest between his position as office manager of the Law Practice of which the Estate was a client, and his role as Executor of the Estate including the interests of Dennis Welsh as the beneficiary.
Ms Groenewegen submitted that this would have amounted, if the Respondent were a legal practitioner, to a breach of Rule 10.1.1 of the Revised Professional Conduct and Practice Rules (Solicitors) 1995 - now Rules 4.1.1, 4.1.2, 4.1.5 and 12.1 of the Legal Profession Uniform Law Australian Solicitor's Conduct Rules 2015 ("the Uniform Rules"). Those Rules relevantly require solicitors to act honestly and in the best interests of their clients, and not to prefer their own interests over those of their clients. R 2.3 of the Uniform Rules and s 298 (b) of the Uniform Law itself, provides that contravention of the Uniform Rules is capable of being unsatisfactory professional conduct or professional misconduct. We find that the evidence supports this ground as well.
[7]
Our Findings in relation to Section 119 of the Uniform Law
In our view the forgery by the Respondent of his father's signature on the relevant trust account cheques and the misapplication of the proceeds, means that the Respondent is not a fit and proper person to be employed in connection with a law practice. Also this conduct, if the Respondent were an Australian legal practitioner, would have constituted professional misconduct. Similarly the contravention of the Uniform Rules, if the Respondent were an Australian legal practitioner, would have constituted professional misconduct.
We are therefore satisfied that the grounds for making an order disqualifying the Respondent under s 119 (2) (b) and (d) of the Uniform Law have been established and that the disqualification is justified. Further we believe that the circumstances warrant that the disqualification be indefinite.
[8]
Costs
The Law Society also sought an order that the Respondent pay its costs. We were referred to S 60 of the Civil and Administrative Tribunal Act 2013 ("the CAT Act"). S 60 (1) provides that each party to proceedings in the Tribunal is to pay the party's own costs. S 60 (2) then provides that the Tribunal may award costs in relation to proceedings before it, only if it is satisfied that there are special circumstances warranting an award of costs. S 60 (3) sets out a non-exclusive list of relevant factors which the Tribunal may have regard to when determining whether there are special circumstances.
Cl 23 (1) of Sch 5 of the CAT Act provides that where this Tribunal has found that a respondent lawyer has engaged in professional misconduct (or unsatisfactory professional conduct), it must make an order requiring that lawyer to pay costs unless it is satisfied that exceptional circumstances exist. In other words the general position with regard to costs in s 60 is reversed. However this provision does not appear to extend to lay associates of law practices.
Ms Groenewegen submitted that because the Law Society is funded by the Public Purpose Fund in disqualification proceedings of this nature, it would not be fair to spend public money seeking orders the effect of which is, essentially to protect the public and the legal profession. These are fundamental objects of the LP Act and now the Uniform Law, and this itself should constitute special circumstances under s 60 of the CAT Act.
The difficulty with that submission is that it could be made whenever the Law Society initiates proceedings against a lay associate, or at the least whenever it obtains a disqualification order in such proceedings. In our opinion something further is required. In this case we believe that there is an additional factor and it is that the Respondent made no attempt to respond to or participate in these proceedings. Had he done so, the many attempts to make contact with him in relation to directions hearings and the date for the hearing, could have been avoided. Further, the hearing time itself could have foreshortened, had the Respondent appeared and Law Society had not been required to prove every element of its case. We believe that these factors constitute special circumstances warranting an order of costs to be made against the Respondent.
[9]
Orders
We make the following orders: -
1. that pursuant to s 119 of the Legal Profession Uniform Law (NSW), the Respondent be disqualified indefinitely.
2. that the Respondent pay the Law Society's costs as agreed or assessed.
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: 21 September 2015