Council of the Law Society of New South Wales v Samaan

6. The Solicitor did not raise any tax invoice for the moneys paid to him. 7. In respect of the amounts identified as 1-12 in paragraph 5 above, The Solicitor acknowledges receiving the money by way of cash and that he issued receipts for such payments. 8. The firm did not operate a trust account or any controlled money account and the Solicitor did not therefore deposit any of the amounts identified as 5-12 in the table at paragraph 5 above into a trust account or controlled money account. 9. Sometime in 2012 the Solicitor paid the sum of $2,750 to Mr Rod Harwick of Counsel on account of fees owing to Counsel. The Solicitor's cheque was not met on presentation. Ms Sirijovska subsequently paid that sum direct to Counsel. 10. As at the time the Solicitor ceased practising, the sum of $11,072 remained outstanding to Mr Greg Watkins of Counsel for fees payable. 11. The Solicitor has admitted misappropriating the sum of $25,196 representing the following amounts: the sum of $9,449 [that is, $649 received on 23 April 2012 and $8,800 received on 16 June 2012] for transcript costs. the sum of $1,925 [that is, $1,650 received on 29 October 2010 and$275 received on 1 December 2012] for payment to Dr Milch. the sum of $2,750 for Counsel fees payable to Counsel, Mr Rod Harwick. the sum of $11,072 for Counsel fees payable to Mr Greg Watkins.

The Law Society's evidence

1. On 28 March 2014, the Law Society filed an affidavit sworn on that day by its solicitor, Ms Anne-Marie Foord, and an affidavit sworn on 26 March 2014 by Mr Antony Fairbairn, an Investigator employed by the Law Society. These two affidavits, together with a letter from the Law Society to the Solicitor dated 25 March 2015, constituted the Law Society's evidence.

The Reply

1. On 23 June 2014, the Solicitor filed a Reply, in which he stated as follows: (a) he had read the affidavits of Ms Foord and Mr Fairbairn and did not contradict their contents; (b) he admitted that he misappropriated funds provided to him in his role as a legal practitioner, in the manner described in the Particulars to the Application; (c) his misconduct occurred at a time when he was affected by certain personal problems; (d) those problems had been resolved with the assistance of family intervention and treatment; and (e) he opposed the Law Society's application for an order for removal of his name from the Roll and sought certain other orders in lieu thereof.

The course of the proceedings

1. At both days of the hearing before us, 1 April and 18 June 2015, Mr L Pierotti appeared on behalf of the Law Society and there was no appearance by or on behalf of the Solicitor.
2. Near the commencement of the hearing on 1 April, Mr Pierotti tried unsuccessfully to contact the Solicitor by telephone to ask whether he intended to appear. Mr Pierotti also advised us that in his letter of 25 March 2015 to the Solicitor, which he later tendered, he had referred to the listing of these proceedings for hearing on 1 April 2015.
3. Being satisfied that the Solicitor had received adequate notice of the hearing, we ruled that it was appropriate for the matter to proceed. Mr Pierotti then tendered the Law Society's evidence, which we admitted. He also handed up an outline of the Law Society's submissions dated 24 March 2015.
4. We then gave the following directions, which accorded with a suggestion by Mr Pierotti: 1. The hearing is adjourned. 2. If the Respondent wishes the hearing to be resumed, he must apply by letter to the Divisional Registrar, on or before 22 April 2015, for the matter to be restored to the list for directions on 6 May 2015. 3. If no such application is made on or before 22 April 2015, the Tribunal will proceed to deliver its decision relating to all aspects of the case on the material now before it. 4. The Applicant has leave to relist the matter on 6 May 2015 if it receives any further information as to the Respondent's status.
5. The Divisional Registrar notified the Solicitor of these directions. On 22 April 2015, he notified the Registry by letter that he wished the matter to be restored to the list on 6 May 2015. He also asked for a copy of the Law Society's written submissions to be sent to him.
6. At the foreshadowed directions hearing on 6 May 2015, the Solicitor appeared in person. An application by him for the hearing to be reopened was granted and the second day of hearing was fixed for 18 June. Certain further directions were given requiring compliance by the Solicitor before this date.
7. The Solicitor did not comply with these directions and did not appear at the hearing on 18 June 2015.
8. Mr Pierotti requested that, as provided for in the directions on 1 April, we should now determine these proceedings on the basis of the evidence already admitted and the Law Society's outline of submissions. We acceded to this request.

The Law Society's submissions

1. In seeking a finding that the Solicitor had been guilty of professional misconduct and an order removing his name from the Roll, the Law Society relied principally on his admitted conduct in misappropriating trust funds totalling $25,196. These funds had been remitted to him in cash by his then client, Ms Sirijovska, for the purposes outlined in paragraph 11 of the Particulars. By virtue of this conduct, the Society submitted, Ground 1 had been made out.
2. With regard to Ground 2, the Society argued that the Solicitor wilfully breached s 255 of the Legal Profession Act 2004 ('the Act') through (a) failing to maintain a trust account at his firm and (b) failing to pay any of these funds of Ms Sirijovska that he received when he was principal of this firm into a trust account or controlled money account. These matters were alleged in paragraphs 2 and 8 of the Particulars.
3. Section s 255(1) of the Act requires a law practice to hold trust money deposited in a general trust account of the practice exclusively for the person on whose behalf it is received and to disburse the trust money only in accordance with a direction given by the person. Under s 498(1)(a), any conduct consisting of a contravention of the Act is capable of being unsatisfactory professional conduct or professional misconduct.
4. The Law Society argued that the conduct alleged under both Grounds would be reasonably regarded as disgraceful or dishonourable by reputable and competent members of the legal profession and therefore amounted to professional misconduct at common law. It referred to well-known authorities to this effect stemming from the decision of the English Court of Appeal in Allinson v General Council of Medical Education and Registration [1894] 1 QB 750. It relied also on the provision in s 497(1)(b) of the Act that professional misconduct includes 'conduct of an Australian legal practitioner… that would, if established, justify a finding that the practitioner is not a fit and proper person to engage in legal practice'.
5. In maintaining that the Solicitor, by virtue of his conduct in misappropriating trust funds, was evidently not a fit and proper person to engage in legal practice and should therefore be struck off the Roll, the Society quoted the following passage from the judgment of Handley JA in Dupal v Law Society of New South Wales [1990] NSWCA 56 at p 64: This Court would be departing from a long course of authority if it were to allow the appeal and substitute a period of suspension for the order of the Tribunal removing the appellant from the roll. Counsel were not able to refer us to any case where a solicitor found guilty of misappropriation or wilful contraventions of s41(1) [this is a provision resembling section 255(1) of the Legal Profession Act 2004] 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 monies entrusted to their charge. The maintenance of those standards and the public interest require, in my judgment, that this appeal be dismissed. It is well established that the jurisdiction being exercised in this case is not penal but disciplinary and that it must be exercised for the benefit of the public. Sympathy for the appellant and for the tragedy that he has brought on himself and his family by his inability to live up to the high standards which this Court and the profession demand of solicitors cannot be allowed to deflect this Court from doing its duty.
6. The Society also quoted the following statement by Kirby P in the same case (at p 60): '…[the] normal consequence of the misuse 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.'
7. The Law Society acknowledged that in a small category of cases of misappropriation by a solicitor involving 'peculiar and individual facts' (for example, Council of the Law Society of New South Wales v Bharati [2010] NSWADT 159), a striking off order had not been made. It maintained however that the present case did not fall within this category.
8. The Society's submissions also referred, citing relevant authorities, to the following well-established principles relating to orders made by way of penalty against legal practitioners who have engaged in professional misconduct: (a) the function of such orders is protective and educative, not punitive; (b) their aims include protecting the public against future misconduct by both the respondent and other legal practitioners; and (c) it is important therefore to take account of the effect of such orders on the understanding within both the legal profession and the general community of the behaviour expected of practitioners.
9. A final submission by the Law Society was that in addition to being struck off the Roll the Solicitor should be ordered to pay the Society's costs.

Our conclusions

1. As indicated earlier, no evidence has been tendered by the Solicitor disputing the allegations made by the Law Society or explaining the conduct described in them.
2. Having reviewed the Society's evidence and taken account of the Solicitor's admissions, we are satisfied that the matters alleged with reference to both Grounds of the Application have been made.
3. We are satisfied also that the entirely dishonest conduct of the Solicitor in misappropriating funds totalling more than $25,000 that had been entrusted to him by his client amounts to professional misconduct, both at common law and under ss 497(1)(b) and 498(1)(a) of the Act.
4. We likewise conclude that the Solicitor is not a fit and proper person to engage in legal practice. This conclusion follows from the serious nature of the professional misconduct in which he engaged and from the absence of any evidence that might explain this misconduct or suggest that conduct of a similarly dishonest kind might not occur in the future.
5. For these reasons, we order that the name of the Solicitor be removed from the Roll.
6. Under cl 23(1) of Sch 5 of the Civil and Administrative Tribunal Act 2013, a respondent solicitor against whom a finding of professional misconduct has been made must pay the costs of the applicant, unless 'exceptional circumstances' exist. There being no evidence of such circumstances, we order that the Solicitor pay the Law Society's costs. 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 2015