In this matter the Applicant, the Council of the Law Society of New South Wales ("the Law Society") seeks an order that the Respondent, Joe Nasr ("the Solicitor"), be removed from the roll of legal practitioners and that he pay a substantial fine and costs.
The Application was filed on 20 November 2013. It contained 14 Grounds of alleged professional misconduct, and 5 Grounds of unsatisfactory professional conduct, each supported by lengthy particulars. However in some instances each Ground traversed more than one factual allegation, so that in fact there were 19 separate allegations of professional misconduct, and 6 allegations of unsatisfactory professional conduct. The primary allegation in Ground 1 was that in 2008 the Solicitor misappropriated trust monies. The other matters were alleged to have occurred in between 2006 and 2008.
The five year period between these events and the commencement of proceedings in this Tribunal, constituted, in the Solicitor's submission, an unreasonable delay, which prejudiced his ability to respond adequately to some of the allegations. This is an issue which we will return to later in these Reasons.
[2]
Professional Misconduct Ground 1: Misappropriation of Trust Money
The misappropriation claim, [Particulars A 5-11] was that in July and August 2008, the Solicitor made 33 internet transfers from his trust account, 3 of which were paid to his office/general account, and 30 directly to his personal Visa debit account. The total amount transferred was $29,990. There was no record of these transfers in the trust account cash payments book or trust ledgers, nor any other documents supporting the transactions.
Ground 1 also contained further particulars of a misappropriation relating to the file of Romic [Particulars F 36- 42], but this allegation was in the Tribunal's view, a duplication, as the payment was already included in the schedule of transfers contained in Particulars [A 5 - 11].
The primary evidence in support of the misappropriation was contained in the report of the Law Society's Trust Account Inspector, Ronald Frederick Dunlop, dated 18 September 2008, and annexed to his affidavit sworn on 11 November 2013.That report also contains a record of interview with the Solicitor taken on 17 September 2008.
In his Reply the Solicitor admitted the allegation, at least in part. He conceded that in all of the transactions particularised in A 5-11 except for one, the moneys were transferred without supporting records. The exception was the transfer of $4,400 from the Romic file to his Visa account on 26 August 2008, where he said that he had verbal authorisation from his client to transfer the money for his costs. We will deal with this transaction later in these Reasons.
In relation to the other transactions, the Solicitor admitted in his Reply that his conduct amounted to professional misconduct, in so far as money was transferred without authority or records, but said by way of justification, that these trust transfers "were made under duress and threats to the life of the respondent". The Solicitor swore two affidavits, the first dated 1 September 2014, and the second dated 4 November 2014 setting out in detail the nature of the threats and duress.
The Law Society submitted that the Tribunal should not accept much of this evidence. Given that the Solicitor had admitted that his conduct amounted to professional misconduct, most of his evidence goes to the issue of penalty only. However, as it was central to both sides' case and took up the greater part of the hearing time, we will deal with it first and in some detail.
In his first affidavit, the Solicitor said that in April 2008, he had acted for a client accused of "drug possession deemed supply". This client was not named in the Solicitor's affidavits, and we were asked at the outset by his counsel that neither his name, nor that of the gang with which he was said to be associated, be published in our Reasons for Decision. Counsel for the Law Society agreed to this course and we have adopted that approach throughout these Reasons. However we were not asked to, and we did not make an order pursuant to s8 of the Court Suppression and Non- Publication Orders Act 2010.
He said that he had known this client for a number of years as the Solicitor's parents were friends of his parents. Both the Solicitor and counsel whom he had briefed in the matter, Mr Adrian Canceri, advised the client that he had a weak case, but he was adamant that he wanted to defend the claim. After a three day hearing in the District Court, the jury returned a guilty verdict. About a week later, according to his first affidavit, the Solicitor received a telephone call from the client, who was then on bail awaiting sentencing, and he said words to the following effect:
I have spoken to another barrister and he told me that I should never have been found guilty. That barrister you got me fucked my case and I want my money back.
The Solicitor replied:
Listen here. The barrister did a great job in the circumstances. I don't know who you have been talking to but unless they were there, they are not in a position to comment on your case. I don't know if you remember but the Judge actually commended the barrister at the end of the trial that he thought he had done a great job in the circumstances.
He then replied:
I don't give a fuck what the Judge said I want you to get my money back from the barrister or you will pay for it.
The Solicitor the said:
That is not going to happen. It doesn't work that way. The barrister did a job and a good job at that and I am will not be asking him to pay any money back. There is also the matter of my fees as you have not paid anything towards my costs for acting for you.
and the client replied:
Listen here you cunt if you think you're going to get away with this you have another think coming. You don't know what I am capable of. Don't try me. I will come to your office and smash the whole place up and then do the same thing to the barrister as well.
The Solicitor then telephoned the client's father who offered to come to the office with his son. However, according to the Solicitor's evidence, the client turned up on his own, and became agitated and argumentative. He said:
You have only one week to get my money. If you do not get my money from the barrister I will go to the city myself and if I cannot get (it) from him you are going to pay for it.
The Solicitor then spoke with Mr Canceri. Mr Canceri in fact offered to refund his fees which were approximately $7,000. According to his first affidavit, they agreed that they could no longer represent the client in the sentencing hearing, but could not decide whether to report the matter to the Police, or inform the Prosecutor in the sentencing hearing, because it would jeopardise the client.
Then followed a text message and voice messages from the client to the Solicitor, all in a similar threatening vein. On 15 May 2008, at about 7 pm the Solicitor received a further voice message saying:
I am down stairs open the door or I will open it for you.
The Solicitor responded by locking the door to the office and turning out the lights.
Soon thereafter the Solicitor said he heard the sound of glass breaking, and footsteps coming up the stairs. His office door was then kicked open and the client and two other men, unknown to the Solicitor forced their way in. The Solicitor gave detailed descriptions of the other men in his affidavit. One of these men pulled out a handgun, pointed it at the Solicitor and said:
Sit down mate we need to talk.
According to the Solicitor's first affidavit he then said:
If you fuck with one of the …… you fuck with all of us. Now you are going to have pay us $100,000 to make this go away .We know all about you. We know about your brother's surgery at Toongabbie we know about your brother's house at Oatlands and we know where you live in Guilford. You go to the Police or you play any games with us and your family will pay for your fuck up. Do you understand?
The Solicitor then said:
Look I don't want any trouble. All I have is $12,000. I will give you that just leave my family and myself alone. I haven't done anything wrong and I have not made a cent on (t)his matter.
And the client said:
$12,000 is a start but is not going to be the end.
The Solicitor paid $12,000 in cash to the men. The money was in a safe in his office and had been put aside for a holiday overseas. The men then left. When he went downstairs the Solicitor saw that a besser brick had been thrown through a glass panel in the front door of his office.
Thereafter the Solicitor said that he regularly received telephone calls from the client demanding further money and threatening violence if he did not cooperate. He said that initially he responded to these demands and threats by paying the client from his own funds. He made transfers from his office account to his Visa Debit card, and then withdrew the money from an ATM beside his office. He then paid the cash to the client who returned to his office from time to time with one or more of the men who had accompanied him on the first occasion.
During this time he became depressed and unable to concentrate on his practice. Also he slept on the floor in his office. Subsequently he did attend Merrylands Police Station to inform them what had happened on the evening of 15 May 2008. However he only described the threatening telephone calls and text messages, and the brick thrown through his glass door. He said that he did not tell the Police about the two men who accompanied the client to his office on the night, nor the gun, for fear of retribution.
The Police record of interview was attached to the Solicitor's second affidavit, and confirmed the limited nature of the disclosure. He said that the Police told him that they would initiate an investigation by attending his office to take photographs and fingerprints, but did not do so. It appears that the Police did telephone the client who denied making any threats.
By the end of June the Solicitor said that his general account was going into debit as a result of these payments and in addition to paying his staff wages and other bills. Also his depressed state meant that he could not generate his usual income. At the time when he received the next telephone call from the client, he said:
Look I don't have any more money. I cannot continue to pay you and your friends. You have taken from me more than what you paid the barrister. I cannot continue to do this.
to which the client replied:
I need $3,500 by next week to fix my car. If you don't have it for me my friends and I will come back and it won't be pretty.
By this stage he said he was becoming extremely depressed, unmotivated and scared. Also he couldn't talk to anyone, particularly his family, about the threats. He felt that his family would be in danger if he did not continue to pay the demands for money. Thereafter he began to meet the payments by transferring money from his trust account.
This commenced on or about 7July 2008 when he transferred amounts of $900, $300 and $1200 from his trust account to his office account. Over the following seven weeks, a further 30 transfers, each for relatively small amounts, were made from the trust account directly to his Visa debit card. The last payment took place on 28 August 2008. According to the Solicitor's evidence the total amount that he paid over to the client or his associates was approximately $47,000, comprising $21,400 from his own funds (including the $10,000 in cash from his safe) and $25,700 from trust account monies - Annexures JN - 2 and JN - 5 to his second affidavit.
According to his second affidavit the demands ceased for three weeks or so from the middle of July until early August, but then returned with increased frequency. The demands were now being made by one of the associates who had threatened him with a gun at his office on 15 May. To meet these renewed demands the Solicitor withdrew small amounts from his Visa account often on a daily basis or even twice a day, and then handed over the cash in an envelope. His evidence was the amounts handed over each time, were the aggregate of two or more Visa Withdrawals -Annexure JN-5 to his second affidavit.
On or about 25 August, he finally confided to his cousin and to a close friend, as well as to Mr Canceri, all of whom had come to his office because they were concerned about his appearance and for his wellbeing, the details of the extortion. One of them said:
Get out of here. Go away for a few weeks. We will let your staff know and they will sort the business out while you are away. Clear your head and come back and deal with these issues.
The Solicitor said that he decided to take their advice and go to Western Australia. Two further payments were made after this meeting. The first was the amount of $4400 from the Romic file, the one payment which the Solicitor claims to have been a legitimate transfer from trust. It appears that this money was used to fund the Western Australian trip. The second was the amount of $1,650, comprised of a number of smaller amounts transferred from the trust account, and paid to one of the associates. At the time of the second payment on 28 August, the Solicitor said to him:
This is the last amount I am giving you. I have no more money and no more access to money. I am leaving the Country so you won't be able to contact me.
He replied:
Yeah dickhead shut the fuck up and stop talking tough. We will see whether this is the last time or not.
The day after the meeting with Mr Canceri, his cousin and friend, the Solicitor also consulted his brother Dr Toby Nasr, who is a medical practitioner. Dr Nasr's clinical notes were in evidence. The notes recorded that the Solicitor had informed him that he had paid money from his trust account to meet the demands after he had exhausted his own funds. They also record the threats to him and other family members and that the Solicitor felt unable to inform the authorities. His notes also stated that Dr Nasr diagnosed post traumatic stress and clinical depression for which he prescribed medication. The Law Society did not ask Dr Nasr to attend for cross examination.
The Solicitor then travelled to Margaret River for two weeks. He had his telephone turned off when he was away. When he returned to Sydney no further demands were received. In early September 2008, following an anonymous message to the office of the Legal Services Commissioner that the Solicitor was misappropriating client funds, the Law Society took control of his trust account. On 17 October 2008 Ms Jean Sayer was appointed Receiver to his law practice. The Solicitor has not practised since that time.
The Law Society submitted to the Tribunal that we should not accept much of this evidence as to why he withdrew the money from his trust account. In its view, the Solicitor's client may have demanded the refund of Mr Canceri's fees at the outset, and followed this up with some threatening calls and messages, but the Solicitor did not in fact pay him or his associates any money at all. Further, the Solicitor was not in his office when the brick was thrown his front door on 15 May 2008, and the meeting thereafter between the client and his associates and the Solicitor did not take place. In fact there were no associates. Instead all of the money transferred from his trust account to his Visa account, and earlier from his general account, was used by the Solicitor for his own purposes. The extortion story was made up by him to justify his misappropriation of trust funds, which he expected the Law Society was about to uncover.
In its submissions, the Law Society raised a number of inconsistencies in the Solicitor's evidence to support its version of what happened, the most significant being that:
1. the Solicitor gave only a very limited version to the Police of what he said had happened on the evening of 15 May 2008. He did not mention the associates, the gun or the handing over of the $12,000, and so gave no indication that he had been the victim on that night of an armed robbery. In fact, according to the Law Society, what he reported to the Police was an accurate account of all that had occurred;
2. he did not inform the Police then or subsequently that he had been subjected to further threats and demands for money after 15 May;
3. he did not inform anyone else about these events until 25 August when he met with his cousin, his friend and Mr Canceri. Even at that time he did not admit to them that the money had come from his trust account rather than his own funds;
4. his fear of retribution was not supported by the fact that the Police did speak to the client on or about 23 May, but there was no retribution from the client nor his associates;
5. the method employed by the Solicitor on receipt of a demand, of withdrawing relatively small amounts from his Visa account over a number of days and then handing the cash in one amount to the client and his associates to meet the demand, was unnecessarily complicated, and more consistent with his spending the cash himself as it was withdrawn; and
6. the threats did not resume after the Solicitor returned from Western Australia, and the Law Society took control of his trust account, although the amount paid by that date was less than the $100,000 demanded on15 May.
The Solicitor was cross examined by the Law Society's Counsel. It was put to him that most of his evidence about the extortion was a fabrication. He answered "no" or "that's not true" consistently to these questions. When asked why he did not give a full account to the Police on15 May 2008 or later when the threats continued, he said:
I was scared.
Later in re examination, he added:
I didn't want to mention the other men or the gun. I was under pressure I had never been under before.
He also conceded that had he made a full disclosure to the Police at an early stage, he might not be here today.
Mr Canceri swore an affidavit dated 27 February 2015. His evidence generally corroborated that of the Solicitor. In fact in some ways it expanded on the Solicitor's evidence. Mr Canceri said that he recollected speaking with the Solicitor on a number of occasions, both in person and on the telephone in the weeks following their first conversation in early May. He said the Solicitor showed him one of threatening text messages.
In July/August he recalled the Solicitor saying to him:
He's continued to threaten me. He's had bikies coming around. The bikies have threatened me. They said that I have to keep paying.
and also:
He's thrown a brick through my front door. The staff are pretty scared. He keeps sending me threatening messages.
On this occasion as on the prior conversations, Mr Canceri told the Solicitor that he must report these events to the Police.
On a later date just prior to the meeting on 25 August, the Solicitor also said to him:
He sent around two guys. They broke into my office. One of them pointed a handgun at me. They said that I had to keep paying otherwise they'd shoot me".
He said that the Solicitor sounded frightened and tired on the telephone. When he met with him on the 25 August, he said that he looked pale and tired and a bit dishevelled. Mr Canceri was cross examined by the Law Society's counsel, but it was not put to him directly that these conversations did not take place. We accept Mr Canceri's evidence.
The Members of the Tribunal also accept generally the evidence of the Solicitor in relation to what occurred. He was forthright in his denials that most of his evidence was a fabrication. His demeanour under cross examination remained calm, and he openly conceded that with hindsight he should have given a full account to the Police of what had happened, and perhaps to others as well, but that he was driven by a fear of retribution to himself and his family and by his generally depressed state at the time.
We accept that this fear was genuinely held and was the motivating force for most of the actions that he took, or did not take, during this period. We have come to the view that this provides a sufficient explanation for his failure to give a full account to the Police on 23 May and subsequently. It may also be that there was no retribution because he did not inform the Police about the involvement of the client's associates.
Nevertheless there remain some issues which require further comment. First there is the method of the withdrawals. The Solicitor was asked by the Law Society's counsel why he withdrew only relatively small amounts from his Visa Account each time. Initially he answered that it may have been due to a daily withdrawal limit of $1,000 on his account. This appears to be an inadequate explanation, given that on most occasions 2 or even 3 withdrawals, each for amounts less than $1,000 were made on the same day. When this was put to him the Solicitor said:
I cannot recall why I did it this way.
While no explanation was provided for the withdrawals being done this way, we are unable to infer from this that the Solicitor applied the money for his own use. Except in relation to the Romic transfer (which the Solicitor denies was a misappropriation) the Solicitor's evidence was that all of the money taken from the trust account was paid in cash to the client or his associates.
The Law Society did not put forward evidence that any of these cash withdrawals were in fact used by the Solicitor for his own purposes. We were referred to the Visa statements for the relevant period which formed part of Mr Dunlop's report, and which showed that the Solicitor used his card to make other withdrawals during this time. There was a payment of $156 to Smiggins Ski School on 9 August and a payment of $74 to Hotel Formule, Wentworthville on 20 August, as well as small payments from time to time to 7 Eleven at Merrylands.
There were also three or four payments to an entity described on the statement as PKRSER.COM Gibraltar. These were for the Australian dollar equivalent of US $100. The Solicitor was cross examined about all these payments. He said that in relation to the ski school payment he joined other members of his family at the snow for a weekend in August, and that he stayed at the Wentworthville hotel for one night rather than sleeping in his office. He agreed that the US Dollar payments were debits for on line gambling. The Solicitor accepted that all these small payments to the entities named on his Visa statement were for his own use, but denied that the cash withdrawals were of a similar kind. There is no reason for the Tribunal not to accept this.
Also the Law Society did not suggest, either in its cross examination of the Solicitor or in its submissions, that because there were insufficient funds in his Visa Account, trust account monies must have been used to pay for items of personal expenditure. By August 2008 the only deposits into the Visa account appear to have been the trust account transfers (pages 60 and 61 of the Dunlop Affidavit). However the Visa account appears to have been in credit at the beginning of July before any of the trust account transfers, and remained so until the end of August, so there remained just sufficient funds to pay these other items of personal expenditure. In any event that was not the Law Society's case.
We also do not place significance on the fact that the threats ceased before the amount of $100,000 originally demanded had been paid over. It was the Solicitor's evidence that this was the amount originally demanded. If his story was a concoction after the event to cover his actions, then it is unlikely that he would have introduced this inconsistency into the evidence.
The Law Society next suggested that a reason the Solicitor first told the full story of the extortion to others in August 2008, was because he thought the Law Society was about to discover his misappropriations and he needed to justify his actions. The Solicitor's counsel, in his final submissions made much of this issue, saying firstly that this proposition was never put to the Solicitor in cross examination and in any event, the routine trust account inspection of his practice had concluded by the end of May 2008, and there was no suggestion of any misappropriation at that time. It seems that the tip off to the Office of the Legal Services Commissioner (which was not connected with the earlier inspection), did not occur until late August 2008, or at least the Solicitor was not aware of it until that time, yet at the latest by early August, according to the evidence, he had already informed Mr Canceri about the threats and the payments. It also appears that the meetings with his cousin and friend as well as Canceri on 25 August, and the next day with his brother Dr Nasr, took place before he was aware of any investigation by the Office of the Legal Services Commissioner or the Law Society.
The Solicitor made no attempt to conceal the fact that he was taking money from his trust account. He must have realised this was going to be detected sooner rather than later. It may be that the likelihood of imminent exposure was a motivating factor in his telling others in late August about what happened. But even if it were, and in view of the evidence, whether it was a motivating factor can be no more than speculation, that does not mean that the story itself was untrue.
In relation to the meeting with Mr Canceri and the others at the Solicitor's office on 25 August 2008, under cross examination, the Solicitor said that he made a full disclosure about the threats and the payments to these persons. When asked whether had told them that he had taken money from his trust account, he said:
Yes I did.
Mr Canceri's evidence was that the Solicitor did not disclose during that meeting that the payments to meet the threats had come from his trust account.
This difference, in the Law Society's view, was significant. It said that had Mr Canceri been told that this, it is unlikely that he would have supported the Solicitor's decision to travel to Western Australia and would have told him to report the matters to the Law Society. We agree with this. On this issue we prefer Mr Canceri's evidence to that of the Solicitor.
This discrepancy is not such as to cause us to question the balance of the Solicitor's evidence. As we have noted above, we have come to the view that he was a credible witness. Further Mr Canceri's evidence generally corroborated the Solicitor's account of the relevant events. Also Dr Nasr's report says that he was told the next day that the some of the money had come from the trust account.
More generally, if the Solicitor's evidence was in fact a fabrication, it was a highly elaborate work of deception, with fictitious characters and dialogue. On this scenario, the deception commenced in July/August 2008 when Mr Canceri, and subsequently his cousin and friend, and then his brother were told about the threats, the associates and the gun. It continued when he was interviewed by the Law Society's Trust account inspectors, Messrs Dunlop and Napper on 17 September 2008, and has been maintained consistently by the Solicitor to the present with his evidence in this Tribunal.
Whilst that remains a theoretical possibility, without any evidence contradicting the Solicitor's evidence, and the Law Society produced none, we are inclined to accept his account of what happened. The Solicitor's counsel put the point in this way:
The applicant has put no opposing view to the Tribunal. If it not be the case that the respondent was put in this extreme situation as described, then what happened? The applicant has never given any competing explanation as to why a solicitor who had been in practice for 10 years would suddenly and seemingly inexplicably behave in such a fashion.
[3]
The Romic trust payment
This was the withdrawal of $4,400 from the trust account on 26 August 2008. The Solicitor annexed to his second affidavit, his Memorandum of Account to Mr Romic dated 1July 2008, in the amount of $7,593.30. He had defended this client in proceedings brought by a real estate agent for unpaid commission and negotiated a settlement on his behalf after an award had been made in favour of the agent. An amount of $6,775.55 remained in his trust account after the settlement of the property the subject of the disputed commission.
In his second affidavit the Solicitor said that he believed that he had a verbal authority from Mr Romic to use the funds in trust as part payment of this invoice. He did not set out an actual conversation where this authority was given, although he did include verbatim other conversations that he had with Mr Romic at that time. The Law Society disputed that he had any such authority, and further that there was no evidence that the account dated 1July 2008 had in fact been sent to Mr Romic.
In view of our finding as to the credibility of the Solicitor's evidence generally, we are inclined to accept what he says in relation to this matter also. Again the Law Society produced no evidence which directly contradicted the Solicitor's account. Mr Romic was not called.
[4]
Professional Misconduct Grounds 6, 7 and 10: Complaint of Breach of Statutory Trust Account Provisions
[5]
Professional Misconduct Ground 8: Complaint of Failure to Account for Trust Monies
We turn now to the other grounds of professional misconduct in the Law Society's Application which arise in connection with the misappropriation. First there is Professional Misconduct Ground 6, alleging a breach of s264 of the Legal Profession Act 2004 ("the Act"). The particulars in support of this Ground cover not only the monies the subject of the alleged misappropriation, but allege a general failure to keep trust account records except for a Trust Account Cash Book, in the period 1 July 2008 - 17 October 2008.
This is particularised at E 35 and F 36 - 42. F 36 - 42 relates to the Romic withdrawal. Professional Misconduct Ground 10 repeats this allegation for Romic. Again there is duplication between Professional Misconduct Grounds 6 and 10. We will dismiss Professional Conduct Ground 10, as the Romic withdrawal is already expressly referred to in Ground 6.
54 S264(1) of the Act states that:
A law practice must keep in permanent form trust records in relation to trust money received by the practice.
and s 264(2) that:
The law practice must keep the trust records:
(a) in accordance with the regulations, and
(b) in a way that at all time discloses the true position in relation to trust money received for and on behalf of any person.
Professional Misconduct Ground 7 asserts a breach of s255 of the Act in relation to Romic and Professional Misconduct Ground 8 a failure to account again in relation to the same Romic transaction. Professional Conduct Ground 8 Also alleges a failure to account in relation to other unrelated matters, which we will deal with below.
S255(1) provides that:
A law practice must:
(a) hold trust account money deposited in a general 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.
and s255 (3) that:
The law practice must account for the trust money as required by the regulations.
The Solicitor has admitted the breaches of s264 of the Act in Professional Misconduct Ground 6. This must be so in relation to the moneys paid to the client and his associates. There were no trust ledger records recording that the moneys had been withdrawn. The same is the case for the Romic withdrawal, where on the Solicitor's evidence, he did not document his verbal authority to pay his fees from trust. The evidence also confirms that there was general failure to keep proper trust records in the practice at this time. We therefore find Professional Misconduct Ground 6 to be made out. This amounts to professional misconduct on the part of the Solicitor.
In response to the Professional Misconduct Ground 7 allegation of a breach of s255 in relation to the Romic payment, the Solicitor admitted only to a breach of s255(3) but not s255(1) of the Act. He also did not admit that he failed to account for any trust monies in relation to this payment, as alleged in Professional Misconduct Ground 8. As we have accepted the Solicitor's evidence generally in relation to this matter, we are inclined to agree that there is no evidence that he held or disbursed Mr Romic's funds other than at his client's direction, so there is no breach of s255(1), or that he failed to account for any trust monies in relation to this transaction. However his failure to document the withdrawal is a breach of s255(3) of the Act, as he concedes.
[6]
Professional Conduct Grounds 13 and 14: Complaint of Failure to Comply with a S660 Notice and to Assist the Law Society in its Investigation
These Grounds are particularised at J63 - 65 and J66- 74 in the Application. A Notice issued pursuant to s660 of the Act was issued by the Law Society and served on the Solicitor on 28 October 2010.The Notice asked for information about a number of his files which were by then the subject of a formal investigation by the Law Society. The Solicitor did not answer the Notice within the requisite 28 day period. On 14 December 2010, that is after the time for a response had already passed, the Solicitor sought an extension, which was not granted. He finally answered the Notice on or about 21 April 2011.
The Law Society appears to have characterised these events as two separate events of professional misconduct. The first was the Solicitor's failure to comply with the Notice during the initial 28 day period. The second was his continuing failure to comply from 26 November 2010 until April 2011.This latter period it characterised as the Solicitor's failure to assist the Law Society in the investigation of a complaint against him. Whilst this approach may be available to the Law Society on a literal construction of s660 of the Act, it is not one that this Tribunal believes to be appropriate.
The more common situation is where there has been significant delay by a solicitor in responding to the Law Society's correspondence before a s660 Notice is issued. In those circumstances it is open to the Law Society to make a separate complaint of "failing to assist", particularly if the subsequent Notice is itself not answered in a timely fashion.
However, in our view, the time between the expiry of the Notice period and the actual date of compliance should be characterised as a continuing failure to comply with the Notice itself, and not as a separate offence. The length of time that a Notice remains unanswered, and in the most extreme cases a Notice can still be outstanding when a complaint for a breach of s660 comes before this Tribunal, is a matter which goes principally to the question of penalty.
In this instance the Solicitor admits the breach of Professional Misconduct Ground 13, but disputes Professional Misconduct Ground 14, though on different grounds to that set out above. He says that his response to the Notice was the best response that he could provide from his recollection, because the Receiver had not provided him with timely access to the files. We will deal with the general issue of access and delay below, but in relation to this Ground, this response seems misconceived. There was no complaint from the Law Society that the Solicitor's response when finally received, was inadequate, only that it was five months late. It was always open to the Solicitor as soon he had received the Notice, to approach the Law Society and ask for more time until he had the opportunity to access the relevant files, but he did not do so.
In the circumstances we find Professional Misconduct Ground 13 proven and that this amounts to professional misconduct as alleged. In view of our comments above, Professional Misconduct Ground 14 is dismissed.
[7]
The remaining Grounds of Professional Misconduct and Unsatisfactory Professional Conduct
These are Professional Misconduct Grounds 2,3,4,5,8,9,11,12, and Unsatisfactory Professional Conduct Grounds 1,2,3,4 and 5. They arise out of the Law Society's investigation into other matters transacted by the Solicitor between 2006 and 2008. They relate to his files for:
[8]
Professional Misconduct
Ground 2 Breach of s258A of the Act Particulars B 12 -16
Ground 3 Breach of s671 of the Act Particulars B 26 - 29
Ground 8 Failing to account for trust money Particulars B 18 and 19 - 2
Ground 9 Breach of s 254 of the Act Particulars B 15 -16
Ground 11 Overcharging Particulars B 20- 21
Borg
Ground 4 Engaging in unethical conduct Particulars C 30-32
Munshizda
Ground 5 Engaging in unethical Conduct Particulars D 33 -34
Hajjar
Ground 11 Overcharging Particulars G 43 - 49
Masroua
Ground 8 Failing to account for trust money Particulars H 50 - 55
Drenovac
Ground 12 Negligent conduct Particulars I 56 - 62
Unsatisfactory professional conduct
Estate of Heather
Ground 1 Delay Particulars B 12-14 17- 19 and 22
Ground 2 Negligent Conduct Particulars B23 - 25
Takla
Ground 3 Failure to transfer documents Particulars K 75 - 81
Ground 4 Failure to respond to correspondence Particulars K 75 - 81
Mohamed
Ground 5 Failure to respond to correspondence Particulars L 82 - 91; and
Mirabello
Ground 2 Negligent conduct Particulars M 92-97
[9]
This corresponds to the order in which the Particulars appear in the Application. However for reasons which were not explained to the Tribunal, the Grounds do not follow the same order. In fact the Application as a whole is a very oddly drafted and confusing document. For example, we can see no reason why Professional Misconduct Grounds 2 and 9, which arise from the same facts in relation to the Heather Estate, are not dealt with concurrently, nor why Professional Misconduct Ground 6, the general allegation that the Solicitor failed to comply with s264 of the Act, is not located immediately after Professional Misconduct Ground 1, the general allegation of misappropriation. Indeed the Law Society also appears to have had trouble with the format. The Schedule of Complaints, provided to Tribunal members at their request after the hearing, omits completely Professional Misconduct Grounds 8 and 11 relating to the Heather Estate.
The material in support of all these allegations found principally in the Report of the Receiver appointed to the Solicitor's practice, Ms Sayer, dated 13 July 2009. This report was exhibited to Ms Sayer's affidavit dated 11 November 2013 and filed in these proceedings.
[10]
Delay
First we will deal the Law Society's delay in commencing these proceedings. The Solicitor says that this has caused him prejudice because he has not been able to access some of his old files. Ms Sayer was appointed Receiver on 17 October 2008. On 5 February 2009, and again on 10 March 2009, the Solicitor wrote to her asking for access to files (though it appears, not the files subsequently the subject of complaint in the Law Society's Application).
Ms Sayer in her evidence could not recollect whether she had replied to or even received these letters, but in any event no substantive response appears to have been sent by her office until January 2010, when the Solicitor was informed that certain files were available for collection by him. A further letter from Ms Sayer to the Solicitor dated 14 July 2014 was tendered which stated that when her Receivership terminated in December 2011, all relevant files vested in the Law Society.
The Solicitor said that relevantly, he has not been provided with access to his files relating to the Estate of Heather, Drenovac, Hajjar, Mohamed and Mirabello. The Law Society does not dispute this. It appears that these files have been misplaced and now cannot be found. No explanation was provided as to their whereabouts.
More generally, the submission was made on the Solicitor's behalf that by not commencing the proceedings until November 2013, although it had received Ms Sayer's report in July 2009, the Law Society was in breach of its duty under s592 of the Act to prosecute complaints against solicitors with expedition.
The Law Society made no attempt to justify this delay. Its most senior solicitor Ms Anne - Marie Foord swore an affidavit attaching the correspondence between the Solicitor and the Law Society, but said nothing in it about the delay. When cross examined, she also did not provide any explanation for it. She conceded that this may have amounted to a breach of the Act and that it may have caused prejudice to the Solicitor. The solicitor who had the day to day carriage of the investigation at the Law Society did not give evidence, although the Solicitor's legal representatives asked that she be available.
All in all this aspect of the proceedings does not reflect well on the Law Society. The Solicitor's counsel objected to the entirety of Ms Sayer's report being admitted into evidence because of the delay. We allowed it in, but accept that its evidentiary weight must be diminished as a consequence. When cross examined, Ms Sayer confirmed, as might be expected, that she had no, or no independent recollection of the Solicitor's files upon which she reported. We have therefore come to the conclusion that in all but one instance, wherever the Solicitor has not been able to access the relevant file, and says as a result he has been prejudiced in responding in full or at all to an allegation, coupled with the general unexplained delay by the Law Society in commencing the proceedings, we will dismiss the complaint.
[11]
Professional Misconduct Ground 12: Complaint of Negligent Conduct in relation to Drenovac
The allegation was that the Solicitor did not pursue a motor vehicle accident claim on behalf of his client who was the grandmother of a close friend. The solicitor said that he was instructed not to pursue the claim, whilst the client looked for a Croatian speaking lawyer. He gave a detailed account of his conversation with the grandson to this effect in his affidavit. We dismiss the complaint.
We were also concerned initially that an allegation of negligence could ever amount to professional misconduct, but accept the Law Society's submission that, taken together with other complaints, it could come within the provisions of s497 of the Act in constituting substantial or consistent failure to reach or maintain a reasonable standard of competence and diligence.
[12]
Unsatisfactory Professional Conduct Ground 1: Complaint of Delay in relation to the Estate of Heather
In addition to the other specific complaints relating to this matter, there was a general allegation of delay. The Solicitor denied this and said he needed access to the file. He also referred to his response to Professional Misconduct Grounds 8 and 11 in relation to this estate, which we deal with below. We dismiss this complaint.
[13]
Unsatisfactory Professional Conduct Ground 2: Complaint of Negligent Conduct in relation to the Estate of Heather
This relates to a motor vehicle forming part of the estate which was in a parking lot at the date of death and which was sold to the owner of the parking lot to offset unpaid parking fees. The vehicle was not included in the estate as an asset or a liability.
The Solicitor said that Mr Heather died when shopping and the car was not located for over a year. There was evidence in the file which could not now be found, as to value of the car and as to the amount owing which was a greater amount. We dismiss the complaint.
[14]
Unsatisfactory Professional Conduct Ground 2: Complaint of Negligent conduct in relation to Mirabello
The allegation was that the Solicitor did not appear on behalf of his client at the Local Court on Directions Hearings on 7 and 11 August 2008. The solicitor said he did not recall any details about this matter and could not respond without access to his file. The Law Society did not adduce any evidence in support, other than the reference to this matter in the Sayer report. We dismiss this complaint.
[15]
Unsatisfactory Professional Conduct Ground 5: Complaint of Failing to Answer Correspondence in relation to Mohamed
In June 2007 the Solicitor successfully settled proceedings on behalf of his client for $20,000 plus costs. It was alleged that the Solicitor did not respond to correspondence from the defendant's solicitor seeking to negotiate an agreed amount for these costs. The final offer was $20,000. No moneys were recovered nor was a bill of costs prepared.
The Solicitor disputed this, but said he needed his file. In his second affidavit he said that he recalled only that there were issues in relation to the costs but I cannot exactly recall what and that I certainly was not paid my outstanding costs in this matter which well exceeded $20,000. Again there was no other evidence other than the Sayer report. We dismiss the complaint.
[16]
Professional Misconduct Ground 11: Complaint of Overcharging in relation to Hajjar
The Solicitor also said that he was not able to access the Hajjar file to respond to the additional Professional Misconduct Ground of overcharging. However this is an allegation of duplicate charging rather than excessive charging. The Solicitor's two memoranda of account attached to Ms Sayer's affidavit, show that the same disbursements were included on each bill and that some of the solicitor's time was charged twice. The amount in question was $3,514.20. In this instance the documents speak for themselves without regard to Ms Sayer's report, and we find the allegation proven. In our view this amounts to unsatisfactory professional conduct.
[17]
The remaining Grounds
We will now deal with the balance of the complaints. In these matters the Solicitor has either denied the allegation, but not on the basis that he has not been able to access his files, or admitted it.
[18]
Professional Misconduct Grounds 2 and 9: Complaints of Breaches of s258A and s254 in relation to the Estate of Heather
We will deal with these Grounds together because they arise from the same event. In the course of administering this estate of which he was the executor, the Solicitor arranged for an employee in his practice to clean out the deceased's former home and to conduct a "garage sale" of some of his personal property. These events took place in December 2006.
The cash receipts from the garage sale were not paid into the Solicitor's trust account, but were paid to the employee and his colleagues who carried out the cleaning, in part payment of their invoice for the provision of those services. The Law Society said this amounted to a breach of s258A and s254 of the Act.
S258A(1) says that:
A law practice must deposit general trust money received in the form of cash in a general trust account of the practice.
S254(1) says that:
Subject to s 258A, as soon as practicable after receiving trust money a law practice must deposit the money in a general trust account of the practice….(there follow certain exceptions which are not relevant in this case).
The Solicitor admitted the facts supporting these Grounds, adding only in his affidavit that he was not aware until it had been brought to his attention by the Law Society during its investigation, that his employee and colleagues had paid themselves from the proceeds.
We find the allegations made out and that they amount to professional misconduct. However we do not think it necessary for the Law Society to have proceeded with separate grounds of complaint under both s258A and s 254. The money received from the garage sale was cash, in which case s258A is the appropriate provision. We therefore uphold Ground 2, but dismiss Ground 9.
[19]
Professional Misconduct Ground 3: Complaint of a Failure to Comply with s 671 of the Act in relation to the Estate of Heather
Because of the delay in preparing probate accounts, a complaint was made to the Legal Services Commissioner by a beneficiary of the estate in 2008. The Law Society appointed Mr Jim Sofiak to investigate, and on 28 May 2008 he wrote to the Solicitor seeking information about this matter. No reply was received. Mr Sofiak wrote again on 14 July 2008 with further specific questions. No response was received from the Solicitor before the Receiver was appointed to his practice.
Again the Solicitor has admitted the facts supporting this Ground. He said also that his failure to reply occurred during the time when he was being threatened by his client and associates and was incapacitated. S671 provides that the failure of a solicitor to comply with any requirement of an investigator in the exercise of powers under the Act, is professional misconduct. We find this ground proven and that it amounts to professional misconduct.
[20]
Professional Misconduct Ground 8: Complaint of Failing to Account for Trust Moneys
[21]
Professional Misconduct Ground 11: Complaint of Overcharging, both in relation to the Estate of Heather
The particulars supporting these Grounds state that there remained in the Solicitor's trust account for this estate, the amount of $2,255.80 at the date of the appointment of the Receiver which money should have been accounted to the beneficiaries. Monies were also released from the deposit received on the sale of an estate property to pay for the application for the grant of probate. The beneficiaries were then billed for filing fees for the grant of probate which fees were never paid.
The Solicitor said that these monies were held back from the final distribution of the Estate because he had received a letter from English relatives of the late Mr Heather which was on the file. There was a concern that they might challenge the will. He also wished to send to them photographs and other personal items. He said the overcharging was not intentional and the filing fee was credited against later fees billed in relation to this matter He also stated that administering this estate was generally a difficult and protracted exercise, not only because of this issue, but because there was evidence that the deceased's house had been broken into and that some of his possessions had been stolen.
As with Unsatisfactory Professional Conduct Grounds1 and 2 which we have already dismissed, the Solicitor said that he could not fully respond Professional Misconduct Grounds 8 and 11, because the Heather Estate file has not been provided to him. Again in view of this unsatisfactory state of affairs regarding the files, we have no reason to disbelieve the Solicitor's explanation and we dismiss these complaints.
[22]
Professional Misconduct Ground 4: Complaint of Unethical Conduct in relation to Borg
On 8 January 2008 an amount of $18,206.30 was transferred from the Solicitor's trust account to his office account. This included $3,630 for counsel's fees and $1,100 for doctor's fees. According to the particulars, counsel was not paid from the office account until 16 January, and there is no record that the doctor was ever paid. The Law Society categorised these events as unethical conduct in taking money for disbursements without proof of payment of those disbursements.
The Solicitor did not admit that the period of eight days before he paid counsel was unreasonable or unethical. In his affidavit he accepted that he had failed to pay the medical practitioner, as he thought that he had already been paid at the time the money was transferred from trust. We find that the first part of this complaint in relation to the delay in paying counsel is dismissed. The allegation in relation to failing to pay the doctor is upheld. This amounts to unsatisfactory professional conduct on the Solicitor's part.
[23]
Professional Misconduct Ground 5: Complaint of Unethical Conduct in relation to Munshida
The allegation is that on 25 February 2008, the Solicitor received $10,000 in cash in connection with this matter and failed to make the required cash transaction report to AUSTRAC. The solicitor admitted that he failed to make this report, but said that the failure was an oversight and not wilful. The claim is upheld and amounts to unsatisfactory professional conduct.
[24]
Professional Misconduct Ground 8: Complaint of Failing to Account for Trust Monies in relation to Masroua
On 26 June 2008, Mr Masroua deposited the amount of $1,500 with the Solicitor for the purpose of paying cost orders against him so that he would be in a position to apply to have bankruptcy notice set aside. The money was not used to meet the cost orders and remained in the trust account until the date of the appointment of the Receiver. In response the Solicitor said the money was not received from his client specifically to pay these costs, and in fact he was later instructed not to pay these costs whilst Mr Masroua reconsidered whether to contest the Bankruptcy notice. He was also due fees which exceeded this amount. The Solicitor attached to his affidavit his account dated 3 July 2008 in the amount of $5,602 which he said had never been paid.
Although the $1,500 remained in his trust account until Ms Sayer was appointed in October 2008, there is nothing which contradicts the Solicitor's evidence as to why the money remained there. Mr Masroua was not called. We accept this evidence and dismiss this complaint.
[25]
Unsatisfactory Professional Conduct Grounds 3 and 4: Complaint of Failing to Transfer Documents to and to Respond to Letters from Client's new Legal Representative in relation to Takla
In August 2005 the Solicitor was instructed by Ms Takla to purchase a strata unit prior to registration of the strata plan. Contracts were exchanged on 4 October that year. Before settlement occurred, the vendor went into receivership. On 11 February 2008 Ms Takla authorised the Solicitor to transfer the file to new solicitors.
Despite follow up correspondence from the new solicitors, which went unanswered, the file had not been sent to the new solicitors by the time of Ms Sayer's appointment.
In the Solicitor's Reply he said that the file had in fact been forwarded to Ms Takla's sister by one of his staff members. The same response is given in his affidavit, although no further details as to when this occurred or why the file was not given directly to Ms Takla.
It would appear that Ms Sayer had access to this file when preparing her report. She also attached correspondence from Ms Takla's new solicitors, including their letter of 9 July 2008, stating that all outstanding fees had been paid to the Solicitor, so there was no basis for his exercising a lien on the file.
We accept that the correspondence from Ms Takla's new solicitors was never responded to by the Solicitor. We are also inclined to prefer the Law Society's evidence that he did not transfer the file, as instructed. In our view both grounds are made out and each amounts to unsatisfactory professional conduct.
For completeness we should add that the Solicitor submitted that subsequently Ms Takla brought professional negligence proceedings against him in the District Court in relation to the transaction. Those proceedings were dismissed and this decision was later confirmed in the Court of Appeal. He said that the documents tendered on her behalf in those proceedings could only have come from his file, but this does not persuade us that he provided the documents to her. They may well have been provided later by the Receiver.
[26]
Summary of our Findings
The overall position is that of the original 19 Grounds of Professional Misconduct in the Application, we have found that 3 of these Grounds were duplications. These were the separate Ground 1 misappropriation allegation in relation to Romic, which was already included in Particulars A 5-11, Ground 9, which was a duplication of Ground 2, and the Ground 10 allegation of a breach of s 264 of the Act, again in relation to Romic, which was a duplication of Ground 6. Of the remaining 16, we have found that 7 Grounds have been made out. These are:
[27]
Professional Misconduct Grounds:
1 - misappropriation of trust money
2 - breach of s258A of the Act in relation to the Estate of Heather
3 - failure to comply with s671 of the Act in relation to the Estate of Heather,
6 - breaches of s264 of the Act [Particulars E 35 and F 36-42]
7 - breach of s255(3) of the Act in relation to Romic
13 -failure to comply with a Notice issued pursuant to s660 of the Act
We have downgraded a further 3 Grounds to a finding of Unsatisfactory Professional Conduct. These are:
4 - unethical conduct in relation to Borg
5- unethical conduct in relation to Munshizda
11- overcharging in relation to Hajjar - [Particulars G 43-49]
We have dismissed the remaining 9 Grounds, including the three Grounds duplicated in other Grounds. These are:
1 - [Particulars F 36- 42], 8 [Particulars B 18, 19 - 22, F 36-41 and H 50-55], 9, 10,11,12 and 14.
[28]
Of the 6 Grounds of Unsatisfactory Professional Conduct, we have found 2 to have been made out. These are:
[29]
Unsatisfactory Professional Conduct Grounds:
3 - failing to transfer documents in relation to Takla
4 - failing to respond to letters in relation to Takla
We have dismissed the remaining 4 Grounds. These are:
1, 2 [Particulars B23-25 and M 92-97],and 5.
[30]
The Question of Penalty
We now turn to the question of penalty. The Law Society submitted that the evidence supported a finding that the Solicitor's name be removed from the roll. Their counsel said this should be the case even if we were to accept, in whole or in part, the Solicitor's evidence in relation to the client and his associates.
The Solicitor's counsel submitted that the appropriate sanction was "time served", which we took to mean he should be entitled to a new practising certificate, and not subject to any further disciplinary sanction. He drew attention to the fact that Solicitor had not previously been the subject of any complaint since he had been admitted in June 1998. It was also pointed out the Solicitor had admitted from the outset many of the allegations of professional misconduct made against him. We note that by and large these were the matters where we upheld the allegations. We were also taken to the evidence of Dr Nasr who had said that he had helped his brother to make good the deficiency in the trust account by October 2008.
At the conclusion of the hearing the Solicitor's counsel said that he could also file independent character evidence if the Tribunal thought that would be of assistance to it. He seemed to have been under the mistaken impression that there would be a separate hearing on penalty. The Tribunal indicated that it did not believe that further evidence of this nature would be necessary and the matter was not pressed. For the record we should make it clear that we have proceeded on the basis that we accepted that the Solicitor was generally a person of good character. Also the evidence of Mr Canceri, although not called specifically for this purpose, inferentially supported our views in this regard.
We were directed to the comments of Handley JA in Dupal v Law Society of New South Wales New South Wales Court of Appeal - Unreported 26 April 1990, which were referred to in the later decision of the Tribunal Law Society of New South Wales v Goold [2001] NSWADT 171. Handley JA said:
Counsel were not able to refer me to any case where a solicitor found guilty of misappropriation or wilful contravention of Section 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.
and also the remarks of Kirby P (as he then was) in Dupal who said:
The normal consequence of the mis-use of entrusted funds by a solicitor and a finding of wilful breaches of the statutory prohibition in that regard, is the removal of the name of the solicitor from the roll.
In subsequent decisions of the Tribunal and of the Court, consideration has been given as to when the presumption in Dupal, as it was described in Council of the Law Society of New South Wales v Bharati [2010] NSWADT 159, might not apply. In Law Society of New South Wales v Bannister [1993] NSWCA 157, Sheller JA, with whom Gleeson CJ and Handley JA agreed, drew the distinction between a situation where a solicitor who on the spur of the moment misappropriated his client's money and then within a short time, overcome by remorse, made good the misappropriation, and a case of premeditated and carefully planned misappropriation, as was found to be the situation in Bannister.
A number of Tribunal decisions were brought to our attention by counsel for the Solicitor in which solicitors found guilty of misappropriation were not removed from the roll. These included:
Barry John Penfold [1997] NSWLST 23, where the solicitor paid a client's cheque for $6,000 to his personal account when he was under financial pressure.
Law Society of New South Wales v McNamara [2007] NSWADT 162, where a solicitor misappropriated funds on 24 occasions over 10 months. (In that case the solicitor was suspended from practice but not struck off).
Law Society of New South Wales v Doherty (No.2) [2009] NSWADT 296, where the solicitor had misappropriated $35,000 from a client and had misled the client.
Law Society of New South Wales v English [2011] NSWADT 39, where the solicitor had misappropriated counsel's fees, as well as Goold and Bharati cited above. Bharati contains the most detailed discussion of these decisions. In that case the Tribunal found that the solicitor had misappropriated trust moneys and knowingly created a false trust account receipt. He was reprimanded and issued with a restricted practising certificate.
Counsel for the Law Society submitted that these decisions should not influence our decision because they "represented a conspicuous minority" and "rely on their own peculiar and individual facts". However if ever a case had its own peculiar and individual facts, it is this one. In none of the cases to which we were referred, was it submitted as a mitigating factor that the misappropriation was made under duress and under threats of life to the Solicitor and his family. Nor have we found any other decisions of the Tribunal where similar extenuating circumstances were involved.
In this instance we have accepted the Solicitor's explanation in relation to the client and his associates. This leads us to the conclusion that this is not a case where removing the Solicitor's name from the roll is appropriate. If we had not accepted this evidence, clearly his conduct in withdrawing nearly $30,000 from his trust account over a two month period, would be classified as a premeditated and carefully planned misappropriation, using the words of Sheller JA in Bannister, but this is not the case.
Ultimately we derived most assistance from the comments of Young J in Prothonotary of the Supreme Court of New South Wales v P [2003] NSWCA 320, where he said that an order striking of the Roll should only be made when the probability is that the solicitor is permanently unfit to practice. The Solicitor's conduct here was misguided and wrong, but in our view, his evidence, particularly, his evidence in person, demonstrated an awareness of his shortcomings and contrition for what he had done. We do not regard his conduct as evidencing the probability that he is permanently unfit to practice.
In coming to this conclusion we do not wish to diminish the seriousness of the Solicitor taking money from his trust account. The proper course was for him to report the matter to the Police and to the Law Society as soon as the threats were received. Nor do we disregard the seriousness of the other findings of professional misconduct against him which were unrelated to the misappropriation. These occurred well before the events of 2008.
In fact the evidence suggests that by early 2008 the Solicitor's attention to detail and supervision in relation to a number of aspects of his practice was not adequate. The Tribunal accepts that it can be difficult for sole practitioners whose practices consist of a large number of individual clients, but here we believe that the Solicitor had fallen below the minimum standard. If these matters had come before the Tribunal independently of the misappropriation allegations, it is very likely that he would have been disciplined by way of a reprimand. There is also the Solicitor's failure to comply with the Notice issued pursuant to s 660 of the Act in 2010.
[31]
Our Orders
Whilst we not believe that the Solicitor is permanently unfit to practice, our findings in these matters, including the misappropriation itself, notwithstanding that we have accepted the Solicitor's evidence in relation to why he took the money, lead us to the conclusion that any practising certificate issued to him should be subject to significant restrictions. In his final written submissions the Solicitor's counsel accepted that some restrictions of this kind were appropriate.
The principal restriction that we impose is that he be entitled to practice only as an employed solicitor. Given that he has not practiced for nearly 7 years it is also imperative that the Solicitor undertake a minimum of 10 units of mandatory continuing legal education as soon as possible. We will not require him to have completed this MCLE before any certificate is issued to him, but we would expect it have been completed at the latest by 31 March 2016, when the current MCLE year concludes, and the Law Society would be entitled not to issue him with a further employee certificate from July 2016, if he has not provided evidence to them by then that the requisite units have been completed.
We have not placed any time limit on the period that the Solicitor should be restricted to an employee certificate. If in the future the Solicitor believes he should be entitled to an unrestricted certificate, he will need to apply to the Law Society in the usual way and satisfy them, on the basis of the evidence then available, that the restriction should be lifted.
119 We also consider that the Solicitor's conduct in relation to the Grounds of Professional Misconduct that we have upheld, warrants a reprimand. We do not intend to also impose a fine, as the Law Society submitted that we should do. We make no order in relation to costs. In relation to both a fine and costs, we have taken into account the delay in these proceedings coming before this Tribunal, and that the Solicitor has suffered financial hardship in being unable to practice since September 2008.
We make the following orders:-
1. The Respondent is guilty of professional misconduct as alleged in Professional Misconduct Grounds 1[Particulars A 5 -11], 2, 3, 6 [Particulars E 35 and F 36 - 42] ,7 and 13 of the Application.
2. The Respondent is guilty of unsatisfactory professional conduct as alleged in Professional Misconduct Grounds 4, 5 and 11 [Particulars G 43 - 49] of the Application.
3. Professional Misconduct Grounds 1[Particulars F36-42], 8 [Particulars B18, 19 - 22, F36 - 41 and H 50 -55], 9,10,11 [Particulars B 20 and 21], 12 and 14 are dismissed.
4. The Respondent is guilty of unsatisfactory professional conduct as alleged in Unsatisfactory Professional Conduct Grounds 3 and 4 of the Application.
5. Unsatisfactory Professional Conduct Grounds 1, 2 [Particulars B 23 - 25 and M 92 -97] and 5 are dismissed.
6. The Respondent is reprimanded.
7. The Respondent is permitted to resume practice as a solicitor, but any practising certificate issued to him is to be subject to the following conditions:-
1. He may only practise as the employee of a solicitor holding an unrestricted practising certificate.
2. He is not to operate on an account of a solicitor which contains or may contain trust money.
3. His employer is to be advised of these Orders and is to acknowledge in writing to the Applicant that he or she has been so advised.
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: 10 July 2015