[2001] NSWCA 284
Category: Principal judgment
Parties: Council of the Law Society of New South Wales (Applicant)
Source
Original judgment source is linked above.
Catchwords
[2001] NSWCA 284
Category: Principal judgment
Parties: Council of the Law Society of New South Wales (Applicant)
Judgment (3 paragraphs)
[1]
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
[2]
JUDGMENT
BELL CJ: By summons filed on 19 July 2024, the Council of the Law Society of New South Wales (the Law Society) sought:
a declaration that Mr Michael Ghobrial (the Respondent) is not a fit and proper person to remain on the roll of Australian Lawyers maintained by the Supreme Court of New South Wales (the Roll) under s 22 of the Legal Profession Uniform Law (NSW) (Uniform Law); and
an order that the Respondent's name be removed from the Roll.
Such relief lies within this Court's inherent jurisdiction, and is preserved by ss 22, 23 and 264 of the Uniform Law: Council of the Law Society of New South Wales v Li [2024] NSWCA 218 at [2] (Li).
The Respondent, who filed a submitting appearance save as to costs on 11 September 2024, was admitted as a legal practitioner and signed the Roll on 27 August 1999. He held a practising certificate continuously from that date until 30 June 2018 and from 17 July 2018 until 4 February 2019 when the Law Society suspended his practising certificate and appointed Mr Anthony Walker to manage the Respondent's law practice, "Ghobrial Legal", pursuant to s 334 of the Uniform Law and Ms Lucia Moliterno to investigate that practice, pursuant to s 162 of the Uniform Law.
On 29 January 2019, the Law Society's Chief Trust Account Investigator, Mr Jim Sofiak, received a telephone call from the Respondent in the following terms:
"Sofiak: Is this about the trust money? I received a call late Friday afternoon from one of your clients. He said you were holding $490,000 in your trust account.
Ghobrial: I have taken it all.
Sofiak: Is there more?
Ghobrial: Yes. I took it all. I am sorry.
Sofiak: How much was there?
Ghobrial: I don't know. I took all of it. I know I will be struck off. I am sorry."
On 1 March 2019, the Law Society appointed Mr Walker to manage a related law practice, "Michael Ghobrial", and also appointed Ms Moliterno to investigate that practice.
On 7 March 2019, the Respondent was declared bankrupt.
On 20 May 2019, the Respondent was arrested and subsequently pleaded guilty to the two charges of the offence of larceny as a bailee, contrary to s 125 of the Crimes Act 1900 (NSW).
On 18 September 2020, the Respondent was convicted. The offences concerned the Respondent's misappropriation of trust moneys held in his capacity as the solicitor for Ms Melissa Ison and Mr Craig Halloran, in the sum of $236,785.91 and $246,785.91 respectively. This misappropriation related to the matters to which the Respondent confessed, as set out in [4] above. The monies represented the proceeds of sale of a property of Ms Ison and Mr Halloran who were in the course of being divorced.
The misappropriation of funds occurred systematically over a period of approximately six months represented by regular withdrawals of amounts in sums varying between $2,000 and $4,000. (The Respondent's clients were subsequently compensated for their loss by the Law Society through a payment from the Fidelity Fund).
The Respondent was sentenced to an aggregate term of imprisonment of four years, commencing on 18 September 2020 and expiring on 17 September 2024 (with a non-parole period of two years). In his sentencing remarks, his Honour Judge Hanley SC of the District Court observed that the Respondent's offending was "persistent, frequent and calculated" and that he had exploited the trust reposed in him by Ms Ison and Mr Halloran. So much is self-evident.
In addition to the defalcations to which the Respondent pleaded guilty, the Law Society also placed before the Court evidence, in the form of a report prepared by Ms Moliterno pursuant to s 65 of the Uniform Law, of further uncharged conduct relevant to the Respondent's fitness to practice law. In short, this involved other defalcations involving the operation of the practice's trust account, the most significant of which in monetary terms involved an amount of some $199,999 representing the deposit for the acquisition of a property which had been paid into Ghobrial Legal's trust account on 16 November 2018 but had been disbursed in an unauthorised way by 31 December 2018.
It is appropriate to consider uncharged conduct alongside convicted conduct to determine whether an individual is a fit and proper person to remain on the Roll: see eg Council of the Law Society of New South Wales v Green [2022] NSWCA 257 at [59]-[60], [68] (Green).
On 23 September 2022, the Law Society notified the Respondent of its intention to consider a resolution to commence proceedings to remove his name from the Roll.
On 16 June 2023, the Law Society resolved that the Respondent was not a fit and proper person to remain on the Roll, and that proceedings should be initiated to remove the Respondent from the Roll.
Whilst the Respondent did not oppose the Law Society's application save as to costs, this Court must be independently satisfied that the Respondent's removal from the Roll is appropriate: Council of the Law Society of New South Wales v Croke [2024] NSWCA 195 at [10]. I am so satisfied. Evidence of the defalcations was contained in the Affidavit of Valerie Anne Griswold affirmed 5 June 2024. Ms Griswold is the Director, Legal Regulation, of the Law Society.
In short, the defalcations were multiple in number, two of them were very substantial in amount and they all constituted a flagrant breach of the Respondent's professional and ethical obligations. By his actions, he has brought the legal profession into disgrace and abused the privilege of admission as a lawyer of the Supreme Court of New South Wales.
Any practitioner who abuses their position in the way the Respondent did and breaches the trust of his or her clients is not entitled to remain on the Roll. By their actions they have demonstrated that they are unfit to do so and lacking in the essential qualities of honesty, integrity and trust required of a lawyer admitted to practice in this State. So much accords with established authority.
In Council of the Law Society of New South Wales v Clarke [2022] NSWCA 57 at [9], this Court held that a practitioner was not a fit and proper person presently or in the indefinite future because:
"The offences involved him taking advantage in a deliberate and calculated fashion of opportunities arising out of his employment as a solicitor and involved significant breaches of trust and serious dishonesty. His acts were antithetical to central requirements for being a fit and proper person, namely honesty and integrity."
The misappropriation of trust funds ordinarily attracts the consequence of removal from the Roll: Green at [65]. In Council of the Law Society of New South Wales v Yoon [2020] NSWCA 141 at [28], this Court held that the misappropriation of trust funds in the sum of $400,000 was a "substantial" amount warranting the removal of the practitioner from the Roll.
As I stated in Li at [24], deliberate and calculated attempts to misappropriate trust funds "harms the reputation of lawyers practising in this State and undermines public confidence in the legal profession". The Respondent's conduct wholly undermined the interests sought to be protected by professional standards imposed on legal practitioners, which Spigelman CJ elaborated upon in New South Wales Bar Association v Cummins (2001) 52 NSWLR 279; [2001] NSWCA 284 at [20]:
"Clients must feel secure in confiding their secrets and entrusting their most personal affairs to lawyers. Fellow practitioners must be able to depend implicitly on the word and the behaviour of their colleagues. The judiciary must have confidence in those who appear before the courts. The public must have confidence in the legal profession by reason of the central role the profession plays in the administration of justice. Many aspects of the administration of justice depend on the trust by the judiciary and/or the public in the performance of professional obligations by professional people."
The Law Society also sought in its summons for the Respondent to pay its costs of the proceedings. Such a course is generally followed where the Law Society is successful in its application to remove a practitioner from the Roll: Green at [97]-[100]; Li at [25].
For the above reasons, the Court should make the following orders:
1. a declaration that Michael Ghobrial is not a fit and proper person to remain on the Roll;
2. an order that the name Michael Ghobrial be removed from the Roll; and
3. an order that Michael Ghobrial pay the Law Society's costs of the proceedings.
PAYNE JA: I agree with the Chief Justice.
STERN JA: I agree with the Chief Justice.
[3]
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Decision last updated: 20 December 2024