Council of the Law Society of New South Wales v Elina

Grounds of Complaint

1. In the Instrument of Consent, the parties consent to a finding that the Solicitor is guilty of professional misconduct, under s 297(1)(a) of the Uniform Law, on the 5 grounds of complaint alleged by the Law Society in its Application as set out at [2] above.

Factual background

1. The Solicitor was admitted to the Roll of the Supreme Court of NSW on 5 December 2008.
2. Relevantly, from 31 March 2011 to 15 March 2021, the Solicitor was the sole Principal of the law firm, GNB Lawyers (law firm).
3. Between 4 and 6 July 2012, the Solicitor attended the Practice Management Course conducted by FMRC.
4. On or about 8 February 2012, the Solicitor opened the law firm's General Trust Account (Trust Account).
5. On or about 15 November 2018, Mr Greg Livermore, Trust Account Investigator, produced a report pursuant to s 165 of the Uniform Law (report). That report was referred to the Professional Standards Department of the Law Society.
6. On 26 June 2019, the Applicant made a complaint to the Office of the Legal Services Commissioner (Legal Services Commissioner).
7. By letter dated 2 July 2019, the Legal Services Commissioner referred the complaint to the Law Society for assessment, investigation and determination under Chapter 5 of the Uniform Law.
8. The Application was filed on 15 March 2021, setting out the 5 grounds of complaint (as per [2] above).
9. The Instrument of Consent was filed on 9 June 2021. It contains an Agreed Statement of Facts. This Agreed Statement of Facts sets out the relevant conduct of the Solicitor in respect of the five grounds of complaint. For convenience of reference, the relevant text of the Instrument of Consent is annexed as the Appendix to these reasons for decision.
10. The Instrument of Consent is signed by the Law Society and the Solicitor. It seeks a finding of professional misconduct and the making of protective orders to the effect that the Solicitor be reprimanded, ordered to undertake an approved practice management course and achieve an agreed pass mark, and that the Solicitor be ordered to pay the Law Society's costs as agreed or assessed.

Jurisdiction

1. It is not disputed that these proceedings are governed by the Uniform Law and that the Tribunal has jurisdiction to deal with the matter.

Legislation

1. The Instrument of Consent is formulated on the basis that the Solicitor concedes that he is guilty of professional misconduct. Misconduct of this kind is defined in the Uniform Law by reference to the definition of unsatisfactory professional conduct. The relevant provisions of the Uniform Law (ss 296 and 297) are in the following terms: 296 Unsatisfactory professional conduct For the purposes of this Law, unsatisfactory professional conduct includes conduct of a lawyer occurring in connection with the practice of law that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent lawyer. 297 Professional misconduct (1) For the purposes of this Law, professional misconduct includes - (a) unsatisfactory professional conduct of a lawyer, where the conduct involves a substantial or consistent failure to reach or maintain a reasonable standard of competence and diligence;… …
2. The grounds of complaint include contentions that the Solicitor contravened ss 137 and 146 of the Uniform Law (Complaints 1 and 2). These sections relevantly provide that: 137 Certain trust money to be deposited in general trust account A law practice must deposit trust money (other than cash) into the law practice's general trust account as soon as possible after receiving it unless - (a) the law practice has a written direction by a person legally entitled to provide it to deal with the money otherwise than by depositing it in the account; or (b) the money is controlled money or transit money; … … 146 Intermixing money A law practice must not mix trust money with other money unless authorised to do so by the designated local regulatory authority, and only in accordance with any conditions the designated local authority imposes in relation to that authorisation.
3. Complaint 4 is that the Solicitor failed to appoint an External Examiner in breach of s 274 of the Legal Profession Act 2004 (NSW) (LP Act) (repealed) and s 155 of the Uniform Law. Those provisions are as follows: 274 Trust records to be externally examined (now repealed) (1) A law practice must at least once in each financial year have its trust records externally examined by an external examiner appointed in accordance with the regulations. … (2) The Law Society Council may appoint an external examiner to examine a law practice's trust records if the Council is not satisfied: (a) that the practice has had its trust records externally examined as required by this section, or (b) that an external examination of the practice's trust records has been carried out in accordance with the regulations. (3) Without affecting the generality of section 300, this section has effect subject to any exemptions provided by or given under the regulations from the requirement to have trust records examined as otherwise required by this section. 155 Appointment of external examiner to conduct external examination of trust records (1) A law practice must once in each financial year have its trust records externally examined by a suitably qualified person appointed in accordance with the Uniform Rules as an external examiner. … (2) The designated local regulatory authority may examine, or may in writing appoint a suitably qualified person as an external examiner to examine, a law practice's trust records if the designated local regulatory authority is not satisfied - (a) that the law practice has had its trust records externally examined as required by this section; or (b) that an external examination of the law practice's trust records has been carried out in accordance with the Uniform Rules. (3) An appointment by the designated local regulatory authority may be made generally or for the law practice specified in the instrument of appointment, or in relation to a particular external examination. (4) If the only trust money received or held by a law practice during a financial year is transit money, its trust records in respect of that year are not required to be externally examined. (5) The designated local regulatory authority may exercise the functions of an external examiner, and references in this Law to an external examiner appointed to examine a law practice's trust records include references to the designated local regulatory authority when exercising those functions.
4. Complaint 5 is that the Solicitor failed to maintain adequate trust accounting records as required by rules 44(1) and (3), 45(1) and (2)(b), 48(2)(a) and (b) and (3) and 93 of the General Rules. Those rules provide as follows: 44 Trust account receipts cash books (1) A law practice that maintains a general trust account must keep a trust account receipts cash book in which the following particulars must be recorded in respect of each receipt of trust money - (a) the date a receipt was made out for the money and, if different, the date of receipt of the money, (b) the receipt number, (c) the amount of money received, (d) the form in which the money was received, (e) the name of the person from whom the money was received, (f) details clearly identifying the name of the client in respect of whom the money was received and the matter description and matter reference, (g) particulars sufficient to identify the reason for which the money was received, (h) details clearly identifying the ledger account to be credited. … (3) The particulars in respect of receipts must be recorded in the order in which the receipts are made out and must be recorded within 5 working days of the receipt being made out. 45 Trust account payments cash book (1) A law practice that maintains a general trust account must keep a trust account payments cash book in which the following particulars are recorded in respect of each payment of trust money - (a) the date and number of the cheque or electronic funds transfer, (b) the amount ordered to be paid by the cheque or the amount transferred, (c) in the case of a cheque, the name of the person to whom the payment is to be made or, if the cheque is made payable to an ADI, the name or BSB number of the ADI and the name of the person receiving the benefit of the payment, (d) in the case of an electronic funds transfer - (i) the name and number of the account to which the amount was transferred and the relevant BSB number, and (ii) the name of the person to whom the payment was made or, in the case of a payment to an ADI, the name or BSB number of the ADI and the name of the person receiving the benefit of the payment, (e) details clearly identifying the name of the person on whose behalf the payment was made, the matter description and the appropriate ledger reference, (f) particulars sufficient to identify the reason for payment. (2) The particulars in respect of payments must be recorded - … (b) within 5 working days of the day the payment was made. 48 Reconciliation of trust records … (2) The trust records relating to a general trust account are to be reconciled as at the end of each named month by preparing - (a) a statement - (i) reconciling the general trust account balance as shown in ADI records with the balance of the practice's trust account cash books, and (ii) showing the date the statement was prepared, and (b) a statement - (i) reconciling the balance of the trust ledger accounts with the balance of the practice's trust account cash books, and (ii) containing a list of the practice's trust ledger accounts showing the name, identifying reference and balance of each and a short description of the matter to which each relates, and (iii) showing the date the statement was prepared. (3) The statements must be prepared within 15 working days after the end of the month concerned. … 93 Register of files opened (1) A law practice must maintain a register of files opened. (2) The register of files opened must, in respect of each matter for which the law practice receives instructions to provide legal services to a person, record the following - (a) the full name and address of the person, (b) the date of receipt of the instructions, (c) a short description of the services which the law practice has agreed to provide, (d) an identifier, (e) the location of any regulated property relating to the matter. (2A) For the purposes of subrule (2)(e), if the regulated property is a document that is stored on a server and may be accessed from multiple locations, the location of the regulated property is to be recorded as the law practice's principal place of practice. (3) Subrules (1) and (2) do not apply to a barrister.
5. Section 144 of the Uniform Law Application Act makes provision for the Tribunal to make consent orders with or without conducting or completing a hearing. Subsections (1), (6) and (10) provide: 144 Consent orders (1) The Tribunal may, with the consent of the Solicitor lawyer contained in a written instrument, make orders without conducting or completing a hearing in relation to the complaint. … (6) The instrument of consent must be filed with the Tribunal. … (10) In deciding whether to make orders pursuant to an instrument of consent, the Tribunal may make such inquiries of the parties as it thinks fit and may, despite any such consent, conduct or complete a hearing in relation to the complaint if it considers it to be in the public interest to do so.

Hearing

1. As required by s 144, the parties agreed on the terms of an Instrument of Consent which was signed by both parties, set out an Agreed Statement of Facts and was then filed with the Tribunal on 9 June 2021, meeting the requirements of s 144.
2. A hearing of the Application took place before us on 30 June 2021. Mr C Flax appeared for the Law Society and the Solicitor was self-represented.

The evidence

1. The Law Society tendered the following evidence without objection: 1. Affidavit of Anthony James Lean affirmed on 15 March 2021 (including Exhibit AJL-1 to that affidavit) (Exhibit A1); and 2. Affidavit of Gregory William Livermore sworn on 15 March 2021 (including Exhibit GL-1 to that affidavit) (Exhibit A2).
2. The Law Society also filed written submissions.
3. It was agreed at the hearing that the matter was not advanced by the inclusion of the names of the Solicitor's clients to whom the grounds of complaint relate. The Appendix to these reasons which sets out the relevant text of the Instrument of Consent, is in the agreed de-identified form.
4. The Solicitor did not rely on any affidavit evidence in these proceedings, nor did he file any written submissions. He did however make some short submissions orally at the hearing and answered questions from the Tribunal on relevant issues.
5. We have also had regard to a letter dated 24 June 2021 from the Legal Services Commissioner tendered by the Law Society (Exhibit A3). In that letter, the Commissioner states that he is of the view that there is objective seriousness of the five admitted grounds of complaint contained in the Application and in the Agreed Statement of Facts in the Instrument of Consent. He further states that the proposed orders reflect the Tribunal's disapproval of the Solicitor's conduct.
6. Although the Uniform Law does not require the agreement of the Legal Services Commissioner, his views are of assistance as they come from the person with statutory responsibility for enforcing professional standards of the legal profession in NSW, in conjunction with the Law Society. Accordingly, the Commissioner's views are persuasive.

The parties' submissions

1. The Law Society submitted that the Agreed Statement of Facts supported by the evidence contained in the Exhibits should satisfy the Tribunal that the Solicitor has been guilty of professional misconduct and that the orders set out earlier, namely a reprimand, an order for further education and an order for costs, are appropriate in the circumstances. The Solicitor agreed.
2. The Solicitor confirmed at the hearing (consistent with correspondence with the Law Society which is included in Exhibits A1 and A2), that he is a sole practitioner who conducts his own daily office administration and bookkeeping without the financial means to hire a bookkeeper. He submitted to the Tribunal that he realises that he did not have an adequate understanding of the concept of trust money and his various trust accounting obligations in relation to client money that was entrusted to him as a solicitor. The instances of breaches in the Agreed Statement of Facts for the intermixing of trust money with other money due to the deposit to the law practice office account of trust money that was intended for the payment of stamp duty, payment to FIRB or settlement in conveyancing matters, resulted from his lack of proper understanding of trust account procedures and obligations. There was no dishonesty or misappropriation. With respect to the declarations to the Law Society, the Solicitor says he believed at the time that he made the correct declarations and that he was not required to appoint an External Examiner. This resulted from his mischaracterisation of the trust money as transit money.

Consideration and Findings

1. We considered submissions made about the approach to be taken by the Tribunal in considering the making of the consent orders sought as set out in the Instrument of Consent.
2. The relevant approach was discussed in Legal Services Commissioner v Searle [2016] NSWCATOD 23 at [21] by reference to the Administrative Decisions Tribunal's decision in Council of the New South Wales Bar Association v Butland [2009] NSWADT 177. As the Tribunal noted in Searle at [23], the approach in Butland has been followed in subsequent decisions of the Tribunal, including Council of the New South Wales Bar Association v Breeze [2015] NSWCATOD 152.
3. While the decision in Butland concerned the operation of s 564 of the LP Act (repealed), this is relevantly in identical terms to s 144 of the Uniform Law Application Act and the principles in Butland continue to apply to Instruments of Consent under s 144 of the Uniform Law Application Act (see for example Council of the New South Wales Bar Association v Hanrahan [2018] NSWCATOD 44 at [83] and, more recently, Council of the Law Society of NSW v Low [2020] NSWCATOD 142 at [68]-[69], where, in both matters, Butland was considered in the context of an Instrument of Consent under s 144 of the Uniform Law Application Act).
4. Relevantly, in Butland (at [29]) the Tribunal observed that the Tribunal does not act, nor should it be seen to act, as merely a "rubber stamp" for agreed positions of the parties, however the consent of the parties deserves significant weight. Accordingly, while we have regard to the parties' views and consent in this case, we must make our own judgment on both the conduct and any appropriate orders.
5. The Instrument of Consent filed on 9 June 2021 complies with the requirements of s 144 of the Uniform Law Application Act, providing an Agreed Statement of Facts and being signed by the parties. In addition to the Agreed Statement of Facts, the Tribunal considered the evidence and submissions provided in these proceedings in written form and at the hearing.

Issues to be determined

1. We must determine whether, on the evidence presented in this case, the Solicitor is guilty of professional misconduct (Uniform Law, s 302). Consideration must be given to the admissions he has made.
2. If we make a finding that the Solicitor is guilty of professional misconduct, s 302 permits us to make any orders that we think fit. That section relevantly provides that the Tribunal may make orders including any of the orders that a local regulatory authority can make under s 299 of the Uniform Law. Section 299 permits us to make orders, among others, issuing a Solicitor with a reprimand (subs (1)(b)) and requiring the Solicitor to undertake training or education (subs (1)(e)).

Did the Solicitor's conduct amount to professional misconduct?

1. We find each of the facts set out in the Agreed Statement of Facts in the Instrument of Consent established and proven. The evidence confirms the contents of paragraphs 6-44 of the Agreed Statement of Facts as reproduced in the Appendix to these reasons.
2. The evidence of Mr Livermore in his affidavit (Exhibit A2), which was admitted by the Solicitor during the hearing, establishes the particulars of each ground of complaint set out in the Agreed Statement. They are identical grounds to those pleaded in the Application. At the hearing, the Solicitor also specifically admitted the conduct the subject of the grounds of complaint and indicated that he does not dispute the facts set out in them.
3. As noted earlier, professional misconduct is defined in s 297(1) of the Uniform Law (see [17] above).
4. With respect to the meaning of the words "substantial" and "consistent" in s 297(1), in Council of the Law Society of New South Wales v Webb [2013] NSWCA 423 Meagher J, with whom Leeming JA and Simpson J agreed (see [29] and [30]), stated (at [22]) with reference to the definition of professional misconduct in s 497(1)(a) of the LP Act (which is relevantly in identical terms to s 297(1) of the Uniform Law): "The distinction made by that definition is between conduct which involves a 'substantial' failure to reach or maintain the required standard and conduct which involves a 'consistent' failure to do so. The former directs attention to the nature and consequences of the failure, which may be sufficiently serious to raise questions as to the lawyer's competence and diligence and thereby warrant the description 'substantial'. The reference to a 'consistent failure' is to ongoing or persisting acts of failing on different occasions to reach or maintain the required standard. The same or similar failures which occur on a series of related occasions and are explained by an overarching error of judgment on the part of the lawyer (which is not itself the or a relevant failure which is the subject of complaint) do not involve a 'consistent failure' in the sense in which that expression is used in this definition."
5. The Solicitor rightly concedes, in the Instrument of Consent, that this Tribunal would find that the conduct described in the grounds of complaint, and particularised in the Agreed Statement of Facts, amounts to professional misconduct.
6. We are satisfied that the Solicitor's conduct set out in the Instrument of Consent does constitute professional misconduct under s 297(1)(a) of the Uniform Law. This is because the conduct: 1. constitutes unsatisfactory professional conduct for the purposes of s 296 of the Uniform Law in that it was conduct occurring in connection with the practice of law that fell short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent lawyer; and 2. constitutes a substantial and consistent failure by the Solicitor to reach or maintain a reasonable standard of competence and diligence.
7. The serious nature of the Solicitor's breaches renders his conduct a substantial failure to reach or maintain the requisite standard of competence and diligence. The Solicitor's conduct involves making false declarations to the professional regulator as well as multiple breaches by him of legislative provisions in respect to his dealings with trust money. The legal profession holds solicitors to a very high standard in relation to their handling of trust money. The legal profession regards failures to uphold those standards to be very serious matters. This is exemplified, for instance, in: 1. Barwick v Council of the Law Society of New South Wales [2004] NSWCA 32 at [118] per Ipp JA: "The trust and confidence which clients place in their solicitors are a basic element of the administration of justice in this country. Violations by legal practitioners of trust accounts betray that trust and harm public confidence in the legal system. This explains the sacrosanct nature of trust accounts and the acute concern that courts have when practitioners, in breach of their fiduciary obligations, misuse trust monies for their own benefit."; 1. Law Society of New South Wales v Jones (Court of Appeal (NSW), 27 July 1978, unrep) per Street CJ: "The 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 … Members of the public, many of them wholly inexperienced and unskilled in matters of business or law, inevitably must put great faith and trust in the honesty of solicitors in the handling of monies on their behalf. The courts must ensure that this trust is not misplaced."
8. The Solicitor's failure to reach or maintain the requisite standard in respect of the conduct the subject of the grounds of complaint can also be properly characterised as a "consistent" failure for the purposes of s 297(1)(a) because the Solicitor's conduct: 1. resulted in multiple separate legislative breaches; 2. the subject of Complaints 3 and 4 occurred over a period of four consecutive years; and furthermore 3. involved the provision by the Solicitor of false declarations to the professional regulator over a number of years.
9. We agree with the Legal Services Commissioner (expressed in his letter Exhibit A3) that there is objective seriousness of the five admitted grounds of complaint set out in the Application and in the Agreed Statement of Facts.
10. In conceding that his conduct amounted to professional misconduct, the Solicitor has acknowledged the seriousness and gravity of the conduct and he has also acknowledged that the conduct was of such a nature as to warrant the orders sought. The Solicitor has also recognised that his failure to adhere to fundamental ethical standards amounted to professional misconduct. In admitting the misconduct, including the serious breaches relating to trust monies and trust accounts, the Solicitor has acknowledged that his conduct was inappropriate and misguided.
11. Legal practitioners are privileged to practice in an honourable profession and must act appropriately and with integrity at all times. We are comfortably satisfied that the Solicitor's conduct amounts to a serious and substantial failure to meet reasonable standards of competence and diligence, and therefore clearly falls within the statutory definition of professional misconduct (Uniform Law, s 297(1)(a)). Accordingly, we have no hesitation in finding the Solicitor guilty of professional misconduct.

Protective orders

1. It is well-established that the jurisdiction of both the courts and this Tribunal in legal professional disciplinary matters is protective, not punitive.
2. The Tribunal's power is to be exercised in a manner that is likely to achieve the maintenance of a high standard of conduct within the profession, which will continue its good reputation. In considering the matter of penalty, we have considered specific deterrence and protection of the public as necessary aims as they relate to the Solicitor and the accompanying aims of general deterrence and education of the legal profession.
3. As expressed in Law Society of New South Wales v Bannister (1993) 4 LPDR 24 (at 28) per Shellar JA, the jurisdiction of the Tribunal is protective, not punitive: "When the jurisdiction of the Tribunal is invoked under Part 10 ... of the Act to conduct a 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 practise 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 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."
4. In The Prothonotary of the Supreme Court of New South Wales v Dimitrious [2015] NSWCA 258, Meagher JA set out the relevant standards with reference to, but not restricted to, trust account obligations, when he said: "Legal practitioners are expected to act and must act with scrupulous honesty when discharging their obligations generally and specifically with respect to the receipt and payment of monies on behalf of clients. There is an unqualified expectation that they will adhere to those standards."
5. The principles which apply to the formulation of appropriate protective orders are well established. They are conveniently summarised in Law Society of New South Wales v Maharaj [2017] NSWCATOD 79 at [24] and following. The Tribunal said: "It is well-established, without the necessity for resort to authority, that there are four principal aspects to be considered in determining what protective orders are appropriate in any particular case. These are; (1) the gravity of the misconduct (2) the deterrent effect of any protective order on the further conduct of the practitioner (3) the deterrent effect of any protective order on the conduct of other practitioners (4) the enhancement of confidence in the public in the integrity of the profession"
6. Having found the Solicitor guilty of professional misconduct, the Tribunal may make "any orders that it thinks fit" (Uniform Law, s 302).
7. We noted above that disciplinary proceedings are concerned with the protection of the public and the Tribunal's role is to protect clients and members of the public from harm that could be caused by dishonest, incompetent or non-diligent legal practitioners. The Tribunal's duty to protect the public is not confined to the protection of the public against further misconduct by the practitioner who is the subject of the disciplinary proceedings. The duty extends to the protection of the public from similar defaults by other practitioners, in acting as a deterrent to other practitioners who may be tempted to engage in similar conduct the subject of the proceedings.
8. The extent of the duty was explained by Beazley JA in Law Society of New South Wales v Walsh [1997] NSWCA 185 at 40. Her Honour, in considering a claim of professional misconduct against a legal practitioner, and after referring to the fact that such disciplinary proceedings were concerned with the protection of the public, said: "The court's duty to protect the public is not confined to the protection of the public against further misconduct by the particular practitioner who is the subject of the disciplinary proceedings. It extends to protecting the public from similar defaults by other practitioners. Thus, it is relevant to take into account the effect the order will have upon the understanding in the profession and amongst the public of the standard of behaviour required of solicitors. In this sense, any penalty imposed should contain an element of general deterrence, 'publicly marking the seriousness of what the instant solicitor has done'..."
9. Thus, it is relevant to consider the effect the orders sought would have on the understanding of the profession and the public as to the standard of behaviour required of legal practitioners.
10. As Street CJ said in Ex parte Macaulay (1930) 30 SR (NSW) 193 at 193-4: "Unless the Court insists on a high standard of conduct on the part of solicitors - unless the Court punishes severely every lapse from the proper standard - the public will never be properly guarded and the profession will never retain the respect which it ought to have in the community."
11. The Solicitor appears to have cooperated fully with the Law Society in its investigation. The evidence shows that he provided timely and frank admissions as to the conduct to the Law Society and admitted the misconduct at the first available opportunity.
12. The evidence also shows that the Solicitor has held a practising certificate for some 13 years and has no other adverse disciplinary finding recorded against his name.
13. We are satisfied from our consideration of the evidence and, in particular, from the report annexed to Mr Livermore's affidavit (Exhibit A2), that the Agreed Statement of Facts accurately reflects the relevant events and, in particular, that there had been no misappropriation of funds by Mr Elina, and his conduct was not wilfully negligent.
14. In determining the appropriateness of the protective orders sought, we have borne in mind the readiness of the Solicitor to concede his misconduct, his insight into his wrongdoing and his expression of remorse and contrition which he made in correspondence with the Law Society and again to us and the Law Society during the course of the hearing in this matter. We accept that this was made with sincerity.
15. We considered whether the ground of Complaint 3 (false declarations) might deserve more protective orders than the penalties sought and agreed. We are satisfied that the evidence suggests that the false declarations were based on a misunderstanding by the Solicitor, rather than dishonesty. We believe this misunderstanding has now been overcome and the Solicitor's understanding of relevant trust account principles will be reinforced by a further course of study in practice management. The Solicitor has also duly acknowledged the seriousness of the conduct and he has admitted that it was behaviour inconsistent with the ethical principles to which a lawyer is bound.
16. The Solicitor has provided an assurance that all future transactions will be regulated appropriately. We note that the parties agreed during the hearing that from 2019 onwards the Solicitor has encountered no issues with his trust account obligations. The Solicitor has also acknowledged the importance of strict compliance with the Uniform Law and has unreservedly apologised for his conduct.
17. Accordingly, in our view, the Instrument of Consent appropriately reflects orders which are commensurate with the circumstances of this case and adequately protect the public interest.
18. We consider an order imposing a public reprimand together with an order for education as set out in the Instrument of Consent to be sufficient deterrent and admonishment and an appropriate and proportionate way to protect the public and mark the necessity for the maintenance of the high standards of the legal profession. Such orders will protect the public by deterring the Solicitor from engaging in similar conduct in the future and deterring other practitioners from behaving in a similar manner. We consider the proposed orders will also properly reflect the Tribunal's disapproval of the Solicitor's conduct.
19. In making these orders, we have also taken into account the mitigating circumstances which apply to the Solicitor, as well as his exposure to an adverse costs order to which he has rightly agreed.

Costs

1. Where a finding has been made that a solicitor has engaged in professional misconduct, in the absence of exceptional circumstances the Tribunal is bound by Schedule 5, clause 23 of the Civil and Administrative Tribunal Act 2013 (NSW) to order costs in favour of the Applicant. There are no mitigating circumstances in this case and the Solicitor has rightly agreed to pay the Law Society's costs.

Finding and Orders

1. The Tribunal finds that the conduct of the Solicitor particularised in the Agreed Statement of Facts below in the Appendix amounts to professional misconduct within the meaning of s 297(1)(a) of the Uniform Law, in that the Solicitor: 1. contravened section 137 of the Uniform Law, 2. mixed trust money with other money in contravention of section 146 of the Uniform Law, 3. made false declarations in the annual Law Practice Confirmation and Trust Money Statement Part A for the following financial year periods: 2013/14, 2014/15, 2015/16 and 2016/17, 4. failed to appoint an External Examiner for his law practice for the following financial year periods: 2013/14, 2014/15, 2015/16 and 2016/17, and 5. failed to maintain adequate trust accounting records as required by rules 44(1) and (3), 45(1) and (2)(b), 48(2)(a) and (b) and (3) and 93 of the General Rules.
2. Consequent upon the finding of professional misconduct, the Tribunal orders that: 1. The Solicitor is reprimanded. 2. The Solicitor must undertake further education in the following terms: 1. the Solicitor is to undertake, complete and pass, at his own expense, within 12 months of the date of the orders made by the Tribunal (and during which the solicitor holds a practising certificate) (the Time Period), a Practice Management Course that is approved by the Director, Legal Regulation (Director) and therein achieve a pass mark of not less than 65% (Pass Mark); 2. the Solicitor shall, within seven (7) days of receipt of notification of the result of his participation in the course, provide to the Director the original of such notification; 3. should the Solicitor fail to achieve the Pass Mark in the course, he shall complete such further course (in which he may not have achieved the Pass Mark) as approved by the Director until such time as he achieves the Pass Mark in the course within the Time Period; and 4. if, at the end of the Time Period, the Solicitor has failed to achieve the Pass Mark in the course, any practising certificate then held by him shall be suspended until such time as he achieves the Pass Mark in the course and should he then not hold a practising certificate, no further practising certificate shall be issued to him until he achieves the Pass Mark in the course. 1. The Solicitor pay the Law Society's costs as agreed or assessed.

Agreed Statement of Facts (Reproduced from the signed Instrument of Consent provided by the parties with client information de-identified.) 1. The Solicitor was admitted to the Roll of the Supreme Court of NSW on 5 December 2008. 2. Relevantly, from 31 March 2011 the Solicitor has been the sole Principal of the law firm, GNB Lawyers (law firm). 3. Between 4 and 6 July 2012 the Solicitor attended the Practice Management Course conducted by FMRC. 4. On or about 8 February 2012, the Solicitor opened the firm's General Trust account (trust account). COMPLAINTS 1 AND 2 A. Client A - PROPERTY PURCHASE MATTER 6. The Solicitor acted for a client (Client A) in the purchase of a property. 7. On 2 June 2017, Client A deposited $7,500.00 to the law firm's Office Account (office account) (deposit). Of this amount, $5,500.00 was for a disbursement payable to the Foreign Investment Review Board (FIRB) and $2,000.00 is alleged to have been for the payment of the Solicitor's costs. 8. The Solicitor has not produced an invoice regarding the costs in paragraph 7 above. 9. On 28 August 2017 (67 days after the deposit had been made) $5,500.00 was paid by the Solicitor from the office account to the FIRB. 10. On 20 September 2018, Mr Greg Livermore, a Trust Account Inspector, had a conversation with the Solicitor regarding this deposit: During that conversation the Solicitor conceded that he had: (a) Incorrectly directed Client A to deposit the sum of $7,500 into the Office Account, rather than the trust account (b) He did not consider transferring the $7,500 to the trust account. (c) He was unable to locate any invoice for the sum of $2,000 referred to in paragraph 8 above, although he believed that he had issued such an invoice. In any event, the Solicitor maintained that he had undertaken substantial work for Client A before the funds were received. 11. By email dated 23 October 2018, the Solicitor wrote to Mr Livermore and advised that at the time of engagement, he had informed Client A that the FIRB prescribed fee was $5,500.00 and the legal costs were $2,000.00. 12. Accordingly, the Solicitor was aware at the time the deposit was made by Client A that the $7,500.00 included $5,500.00 which was for payment of the FIRB, that sum of money was trust money and should have been deposited into the law firm's Trust Account. The failure to do so was a breach of sections 137 and 146 of the Uniform Law. B. Client B 13. On or about 29 August 2017, the Solicitor acted for a client (Client B) and the Vendor in the purchase of a property. 14. A copy of the sale contract on file is dated 25 October 2017. 15. On or about 12 December 2017, Client B deposited $30,000.00 into the firm's office account, of which $25,885.00 was for stamp duty and which was paid to Revenue NSW on 18 December 2017. 16. The remaining $4,115.00 was applied in payment of invoices issued on 29 August 2017 in the amount of $2,970.00 and 18 December 2017 in the amount of $1,145.00. Relevantly, the bank account details for payment recorded on the invoice were the details of the law firm's office account. 17. The Solicitor informed Mr Livermore that the deposit into the office account had been made in error - he had asked the client to deposit the funds into the Trust Account. 18. The deposit of $30,000.00 included the sum of $25,885.00 for stamp duty and the invoice with respect to the $1,145.00 was issued after the deposit of the $30,000.00 into the office account. Accordingly, part of that deposit - $25,885.00 plus $1,145 - was trust money and should have been held in the firm's trust account until the payment was due. The failure to do so was a breach of sections 137 and 146 of the Uniform Law. C. Client C 19. The Solicitor acted for a client (Client C) in relation to the purchase of a property. 20. A copy of the sale contract on file is dated 7 December 2017 and settlement occurred on or about 22 January 2018. 21. On 18 January 2018, Client C deposited $29,500.00 into the firm's office account. Of that amount and according to an (undated) handwritten note on file, the sum of $27,526.33 was for payment to the ANZ Bank, leaving a balance of $1,973.37. The office account statement indicates that on 19 January 2018, $27,526.33 was paid to the ANZ Bank. 22. On 22 January 2018, the Solicitor issued a tax invoice in the amount of $1,650.00 for legal costs. 23. On 6 September 2018, Mr Livermore had a conversation with the Solicitor and during which the Solicitor conceded that Client C had overpaid the Solicitor the sum of $323.67 ($29,500.00 less $27,526.33 [stamp duty] less of $1,650 [paid to Solicitor in respect of the 22 January 2018 invoice]) - the Solicitor placed a note on the matter file - "shortfall for stamp duty". The Solicitor further stated that he had produced the note at the time of settlement and, for various reasons thought that further stamp duty might be incurred on the purchase. Notwithstanding that no further stamp duty was payable, the Solicitor did not transfer the additional $323.67 into the trust account. That sum was only paid to Client C on 24 July 2018. 24. In light of the above the Solicitor was aware that there was an overpayment of $323.67 and that it was trust money that should have been transferred to the trust account. Rather, it was held in the Office Account for a consecutive period of 187 days. 25. Based on the above, the failure to transfer the total amount of $29,500.00 (or at least the subsequent amount of $323.67) to the trust account was a breach of sections 137 and 146 of the Uniform Law. D. Client D 26. The Solicitor acted for a client (Client D) in the purchase of two properties. One of those properties was located in Box Hill. The other property was located in North Albury. 27. A copy of the contract for sale for the North Albury property on file is dated 15 March 2018. 28. On 22 March 2018, Client D paid $600.00 to the law firm for legal costs in relation to the Box Hill property matter. 29. On 26 March 2018, $314,000.00 was deposited into the law firm's Office Account in relation to the North Albury property matter. The Solicitor states that the deposit was in error, he having given the client the wrong account number. 30. According to an undated Statement of Account, the sum of $314,000.00 was to have been applied as follows: Description Hand to Receive Amount required to settle $298,738.02 Stamp Duty $10,450.00 Legal fees $1,250.00 request review and receipts Disbursements at settlement $1,455.66 Government fee & charges $1,018.37 Registration of title $1,087.95 Amount provided by you $0.00 $314,000.00 $314,000.00 $314,000.00

31. Notwithstanding, the Solicitor informed Mr Livermore that of the $314,000.00 deposited by Client D, $298,750.02 was applied to various parties for settlement of the North Albury property and the remaining balance of $15,249.98 was applied to the following: i. 29 March 2018: $10,450.00 to Revenue NSW for stamp duty; ii. 29 March 2018: $1,250.00 for payment of legal costs for an invoice dated the same day; iii. 29 March 2018: $600.00 for payment of legal costs for an invoice issued in relation to the Box Hill property dated 22 March 2018; iv. Unknown date: $182.98 of which the Solicitor says he was owed of $794.98 incurred by "disbursements and government charges"; and v. 24 July 2018: Refund of $2,767.00 to Client D following a complaint made to the OLSC. 32. On 6 September 2018, Mr Livermore had the following conversation with the Solicitor regarding the Client D matter and in particular, the payment of $2,767.00 back to the client on 24 July 2018: Mr Livermore: In your letter to the [Office of the Legal Services Commissioner] OLSC dated 30 May 2018, you offered to repay the client $2,767. You have previously shown me how you calculated this figure. Regardless of the complaint that was made, does this amount represent costs that you overcharged the client and if yes, when did you know that you had overcharged the client? Solicitor: I found out on the same day that I wrote the letter that I should reimburse the client. It was anticipated that the costs would be greater because there may have been a financial agreement between the client and her mother regarding the property purchase. The financial agreement did not eventuate. Mr Livermore: You made an offer in your letter to the OLSC dated 30 May 2018 that you would refund the client $2,767, which you paid to the client on 24 July 2018, 55 days later. If you identified this amount as an overpayment, then why didn't you transfer this money to the general trust account pending settlement of this matter? Solicitor: I was thinking about it. Definitely. Mr Livermore: Then why didn't you move the money to the general trust account? Solicitor: It would have been additional work for me. Mr Livermore: Do you mean the trust record keeping? Solicitor: Yes the trust account record keeping. Mr Livermore: You have since paid the client the $2,767 on 24 July 2018 from your office account. It therefore took you 12 days between 12 July 2018, when you were notified by the Legal Services Commissioner that the client had accepted your offer and 24 July 2018, when you paid the client this money from the office account. Why didn't you pay the client immediately upon receiving this notification? Solicitor: The complainant is the complaining type of person. I wanted to send the money to her mother's account, not her, because I didn't trust her. Mr Livermore: So why did it take you another six days to pay the money on 24 July 2018 after I told you to repay? Solicitor: I waited for the mother's account number. That's why I didn't pay. I decided if it didn't come within five days, I would pay the daughter. 33. Accordingly, from about 30 May 2018, the Solicitor was aware that he owed Client D the sum of $2,767.00 in overpayment and had offered to make the repayments to her however, the Solicitor retained the funds in the office account and did not pay same to the client until 24 July 2018. 34. The Solicitor's failure to transfer the deposit of $314,000.00 from the Office Account to the Trust Account or to immediately pay it to authorised persons/entities, was a breach of sections 137 and 146 of the Uniform Law. COMPLAINTS 3 AND 4 35. For the year ending 31 March 2013 the Solicitor submitted a "Law Practice Confirmation and Trust Money Statement "- "Part A" and "Part B". The Solicitor declared that during that year he had held trust moneys and had maintained a general Trust Account. 36. For the years 2013/14, 2014/15, 2015/16 and 2016/17 (relevant years) (as per the schedule below), the Solicitor submitted four (4) "Law Practice Confirmation and Trust Money Statement Part A" electronic forms. Practising Year Date of submission 2013/2014 30-Apr-14 2014/2015 26-May-15 2015/2016 24-May-16 2016/2017 05-May-17

37. Relevantly, the Solicitor declared "No" to all of the following questions in relation to the law practice having received any of the six types of trust money listed (with the exception of 2016/2017 year, where he declared "Yes" to question 6) (the Declarations): [did the law practice]: 1 Received or held money that was required to be deposited into a General Trust account in an Authorised ADI in this jurisdiction Yes/No 2 Received or held controlled money Yes/No 3 Received or held trust money Subject to a Specific Power Yes/No 4 Received or held trust money subject to a Written Direction Yes/No 5 Received direction to Invest Trust Money on behalf of any person Yes/No 6 Received or held Transit Money and retained particulars as required by the Legal Profession Regulation 2005 [After July 2015 - Legal Profession Uniform General Rules 2015] Yes/No

38. Prior to submitting the Declarations, the Solicitor was required to confirm by way of statement: "Confirmation Confirmation: I, being the principal who completed this part of the Law Practice Confirmation and Trust Money Statement Confirm that the response contained in this Part of the statement are true to the best of my knowledge and belief" 39. Based on the Declarations, the Solicitor was not required to complete Part B of the Declaration or to arrange for an External Examination to be conducted for any of the relevant years. 40. During the relevant years the firm did, contrary to the Declarations, hold trust monies, as evidenced by the statements for the law firm's trust account. 41. In a conversation with Mr Livermore, the Solicitor confirmed that he had completed the Part A Declarations for the years of 2013-14, 2014-15, 2015-16 & 2016-17 and said that he believed that the moneys deposited into the trust account was transit money. 42. The Declarations made by the Solicitor were false. 43. The Solicitor failed to appoint an External Examiner in breach of section 274 of the Legal Profession Act 2004 and section 155 of the Uniform Law. COMPLAINT 5 44. On or about 6 September 2018, Mr Livermore completed his examination of the trust account records for the period 1 April 2017 to 31 March 2018 and produced a report dated 24 September 2018 (the EER). Schedule 1 of the EER indicated that the Solicitor had failed to maintain trust accounting records: i. From 1 April 2017 none of the transactions in the general trust account dated 1 April 2017 had been entered into the trust account receipts and payments cashbooks (see Rule 44 and 45 of the Legal Profession Uniform General Rules (2015) (the General Rules). ii. For the period from April 2017 to March 2018, none of the month end bank reconciliations and/or trial balance statements had been prepared (see Rule 48 of the General Rules). iii. As at 18 July 2018, the Solicitor had not maintained a Register of Files (see Rule 93 of the General Rules).

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: 20 July 2021