Ground 1 - The Solicitor misappropriated trust monies
11The Law Society asserted that the alleged misappropriation occurred in the context of its notification to the Principal on about 25 November 2005 that it had received a complaint that he had misappropriated funds of the estate of the late Myra Irene Nettelbeck and his subsequent flight to Cairns on 29 November 2005, and that it concerned the non-payment of three charitable beneficiaries of that estate of an amount totalling approximately $277,000.00. It further alleged that an amount of $603,097.47, being funds in the estate of the late Mary Phillipson, was withdrawn from a bank account that formed part of the estate and deposited into an account in the joint names of the Solicitor and the Principal ('the joint account') and that on 2 December 2005 the Solicitor deposited a bank cheque (dated 30 November 2005 and payable to CR Fitzsimons Trust Account in an amount of $603,097.47) into the joint account. In doing so she misappropriated the money.
12There is no dispute that the monies were misappropriated, but there is a dispute as to who did the misappropriation. The Solicitor disputes that she misappropriated the money and deposited it into the joint account. Further, while the Principal asserts that he misappropriated the money and deposited it into the joint account, his evidence is contradicted by Mr Westwood's evidence and a volume of other evidence that casts significant doubts on the accuracy and veracity of his evidence. This is particularly the case in relation to his evidence regarding his physical location on 2 December 2005 and his ability to do carry out his alleged actions.
13The Law Society relied upon the expert evidence of Paul Denison Westwood, Forensic Document Examiner. He expressed the opinion that it was 'highly probable' that the Solicitor and not the Principal was 'the likely author' of the bank deposit slips dated 29 November 2005 and 2 December 2005. He referred us to Appendix B of his report dated 13 March 2008 in which he defined "highly probable (qualified positive conclusion) as follows:
I am almost certain that the questioned writing/signature was written by the writer of the specimens, However, some limiting factor, often the amount of writing in question or when the questioned document is a reproduction, has reduced the level of certainty attainable, and I cannot entirely eliminate the possibility of this being another person's writing, but consider this to be highly unlikely.
14Mr Walsh cross-examined Mr Westwood at some length on matters that included the size/extent of the handwriting specimens that he relied upon in forming his opinion and, in particular regarding his opinion that the specimen handwriting in a document marked "F5" (which he attributed to the Solicitor) was written by one person. However, we note that the witness had addressed the latter issue in his further report dated 17 April 2012 and that he stated that this did not cause him to alter his opinion concerning the authorship of the relevant bank deposit slips as he did not take specimen document F5 into account for that purpose. He maintained that view in cross-examination.
15The Principal (Christopher Ronald Fitzsimons) was called and sworn. Mr Walsh questioned him about a cheque that was drawn payable to M Roberts in the sum of $100,968.21. The Principal said that he was aware of the circumstances in which that cheque was drawn and that Mrs Roberts had been a beneficiary in a deceased estate. He stated (relevantly):
... I had deposited her money or the estate money into that account that entitles C R and M A Fitzsimons xxxx xxxx xxxx. I had also - that is December '05. In the second half of 2005 I went to the Commonwealth Bank at Chatswood and I opened a trust account under the name of C R Fitzsimons trust account. That was a legitimate trust account but it was not one that I reported to the Law Society that I had...
And I was pumping clients' money into what one might call an unofficial or unauthorised trust account. The cheque is drawn on the personal account because I was the only signatory to the other or the unauthorised trust account. I did not have - I was in Sydney at the time but I did not have the trust account cheque book....
I was in Sydney at the time and I don't know whether I had left it in Cairns, I don't know whether it was in the Potts Point house or what, but in any event I knew the amount was due to Mrs Roberts. I told my wife to write the cheque on the personal account that she did. I lied to her and told her that I had left the cheque book in Cairns or I didn't quite have it but I'd made an arrangement with the bank for the cheque to be covered. On that basis, she wrote the cheque and it was duly posted.
16The Principal had deposed that he was in Sydney on 2 December 2005 and that he had flown to Cairns on 29 November 2005 at 15:30 on a flight operated by Virgin Airlines (this was confirmed by records produced by that airline). Mr Walsh showed him copies of his Telstra mobile phone records, which indicated that on 2 December 2005 at 12:21 he made a call lasting 30 seconds from Buchan Point (near Cairns) to a number in Sydney. He asserted that he was in Cairns 'in the morning' and that he 'came to Sydney in the afternoon'. However, he said that he 'had no independent recollection of when he left Cairns to come to Sydney'. Nevertheless, he stated:
To my recollection, I was probably on - probably on the midday, mid 12:30 flight and it would have been - it would have to be Qantas because for frequent flyer points that was the preferred choice I made when flying.
He maintained that the handwriting on the deposit slip dated 2 December 2005 was not that of the Solicitor.
17In cross-examination, the Principal conceded that he 'did not have a strong recollection of the period of late November and through December 2005' and said that he recollected 'some bits, but without reference to these documents to jar my memory, no." He agreed that it had been 'a very, very long time of madness' and that it would hardly be surprising in that circumstance if he did not have a very good memory of exactly what he was doing between late November and late December 2005.
18The Principal stated that he did not have a good memory of what he was doing. He stated:
A. No, I don't and there's a reason for that, because the madness was a part of a very - well, at least ten or twelve years of subterfuge, lies, deception, as if I was in - pretend I was in the KGB, CIA, ASIO, you name it I was in it. And with that, superimposed on that, was the kitbag full of masks, so I could put on a face and be anybody I wanted to be. So, for me to bet onto an aeroplane was all part of the game. Yeah, it was terrific.
However, he said that he did remember some things such as dyeing his hair and he described that as a desperate act - 'my world was about to break open and I became - panicked, I was desperate' as he was evading contact with the Law Society 'and cops and everybody. My whole world was imploding and everybody and everything was a potential enemy...'
19Ms Gleeson put to the Principal that Telstra's phone records and particularly the call made from Saddle Mountain at 15:04 on 2 December 2005 placed him in Queensland at about 3pm. He disagreed and stated:
A.Because when I left the house at Clifton Beach, which is on the northern beaches at Cairns, I diverted the home line to my message bank. The caretaker and his wife, or the manager, manageress of the complex where we were, had access and had a set of keys and had access to the townhouse. They did the gardening, mowed the lawns, did whatever. I was in the air when those calls were - if they were made, if they were made, then I didn't do them because the caretakers may have done them. Secondly, I can't differentiate what is an incoming or an outgoing call diversion but all of these relate to my mobile.
He maintained that he had a clear recollection of flying from Cairns to Sydney on the afternoon of 2 December and that he was 'entirely confident' that it was on a Qantas flight. He stated:
A. Because that time of the year is summer. It is the peak tourist season up there. Qantas fly in the morning with a Boeing 767 and fly out in the afternoon with a Boeing 767. I don't know about the number of people they can carry but the timetable, given that I've been going there a few times every couple of months since 2002, I'm reasonably familiar with airline schedules and flights and the like, not that I'm preoccupied with it, but the published timetable, flight time Cairns to Sydney, is three and a quarter hours. A 767 can do it in two and a half or two and a quarter, but nothing under. So, if the plane left Cairns - and I've got no recollection of when it did or anything else - but by reconstructing the time, if my last call is at 12:21, for thirty seconds, but it's a fair indication to me that I probably made the call sitting on the plane before take-off. Who I rang, the number doesn't ring a bell, but be that as it may, 12:21 is really 1:21 Sydney time. Add on two hours, is 3:21. Add on a bit, the plane probably arrived in Sydney 3:30, quarter to 4.
20The Principal said that he did not recall when he returned to Cairns and that he 'could have been in Sydney for a week, could have been a bit longer. I know I was back in just before Christmas of 2005.' He said that he did not see the Solicitor during that period, but that he spoke to her and that he thought that he had stayed 'at Potts Point'.
21Ms Gleeson put to the Principal that the Virgin airlines records indicated that at 11:04am on 29 November 2005 he phoned and booked a seat on a flight to Cairns that day and that he did so within a couple of hours of Leo Gore (a Trust Account Inspector) visiting the apartment at Potts Point. However, he denied knowing who Mr Gore was at that time and said that he did not know what was in his report (we note that this was prepared pursuant to Section 270 of the Legal Profession Act 2004). He stated (relevantly):
I'd say that the chances of me reading that (Mr Gore's report) in December 2005 when my world collapsed are nil... I was resurrecting darkness.
22Ms Gleeson referred the Principal to the medical report of Dr Hugh Morgan, which he relied upon in the proceedings brought by the Prothonotary of the Supreme Court and annexed to his affidavit in these proceedings, and he confirmed that as far as he was concerned, the history that was taken by Dr Morgan was accurate. The following exchange followed:
Q. Could you go to page 88? Do you see paragraph 1.4, Dr Morgan records you as telling him that in November 2005 you received a phone call from the Law Society to say that they had a complaint that you had misappropriated funds? You told Dr Morgan something to that effect?
A. Yes.
Q. And you told Dr Morgan that it pushed you over the edge?
A. Yes.
Q. And you told Dr Morgan that the next day you were expecting blue lights and sledge hammers?
A. Yes.
Q. And that an inspector from the Law Society came and asked you for all the books?
A. Yes.
Q. Were you present when the Inspector came?
A. No.
Q. Within two hours of the inspector coming you were at the airport and on a plane to Queensland, is that what you told Dr Morgan?
A. Yes.
Q. And was that true?
A. I don't remember... I can't tell you the flight number or the date. I mean, I do know that after this exploded I went to Cairns.
He agreed that this was the account that he gave to Dr Morgan on 3 February 2006, and that he had benefited from some hospitalisation for a few weeks at Northside Clinic at that time. He agreed that he was being medicated at that time and that he had no reason to lie to Dr Morgan, as 'He was my friend. I was depending on him.' He also conceded that when he told Dr Morgan that an inspector from the Law Society had come and asked for the books and within two hours he was on a plane to Queensland, that reflects the true state of affairs, which is that an inspector came to inspect the books, he learnt about that very shortly after it happened and he made arrangements to go to Queensland and that he left the Solicitor at home to deal with things.
23The Principal also agreed that he told Dr Morgan that he was in Queensland 'for three to four weeks' on his own. However, he was not prepared to concede that this was the truth. He stated:
A. Well, as to what I told him precisely and what he scientifically wrote down, I don't recall, but in broad terms. I mean, when you go to a psychiatrist and you go to a doctor nothing is done on a whiteboard. The guy is entitled to a history of the patient and that's what I gave him. But in broad terms, it's all true.
When pressed, he stated that he did not recall whether he was in Queensland for three to four weeks on his own, although he had told Dr Morgan something to that effect. He agreed that he had used Dr Morgan's report several times since and that he had never suggested that the history that he gave him in that respect wasn't correct. He agreed that he told Dr Morgan that he 'became paranoid, intensely worried' and dyed his hair to change his appearance and that he went to obtain contact lenses. The following exchange occurred:
Q. I suggest that what I've just drawn to your attention at paragraph 1.4 is an accurate statement of what you recounted to Dr Morgan in February 2006. Do you think that's likely?
A. The particulars of things that happened is (sic) most likely true. The sequence in which they happened I'm sorry I can't say what he wrote down at the time or what his - how full his notes were nor indeed can I precisely tell you verbatim what I told him.
Q. I can show you the notes in due course if necessary but at the moment is it fair to say that if this is a complete account of what you told him you did not tell him that you flew back and forwards between Cairns and Sydney in the period from two hours after the inspector came to visit and late December? That's fair, isn't it?
A. I don't know.
Q. Certainly he hasn't recorded that fact has he?
A. It's not there, no.
Q. And would you agree that that would be the kind of bizarre behaviour that would be worthy of recording if you were trying to identify whether someone is suffering from a bipolar illness?
A. No.
24The Principal further asserted that on 2 December 2005 he received the cheque for $603,000 (from the Phillipson estate) in the following circumstances:
A. Prior to that got off the plane to my recollection was about a quarter to four. The day was a Friday. I had no luggage because - except for my laptop because I got off the plane, into a cab. Potts Point to airport is about twenty minutes, half hour... Got out of the cab down past the El Alamein fountain, went to the Potts Point post office, opened the box. There's some mail. One of the things is a cheque which I then walked to the Commonwealth Bank which is 50, 100 metres away and I deposited it.
Q. And you deposited that with the deposit slip that is - or with a deposit slip. Is that right?
A. Yes.
Q. Do you accept that the deposit slip at page 25 of the bundle is the deposit slip that accompanied the cheque when it was deposited?
A. Yes.
Q. And that's a deposit slip that's personalised in the names of you and your wife?
A. Yes.
Q. And the deposit slip was written out by Mrs Fitzsimons before the cheque was banked, wasn't it?
A. Rubbish. No.
Q. Well, you say rubbish but I suggest to you that what you've just said is rubbish, Mr Fitzsimons?
A. Madam that is not my handwriting. It is not my wife's handwriting on that deposit slip.
Q. I suggest to you that the handwriting with the exception of the (figures) '603,000' in the bottom right-hand corner is all your wife's handwriting, isn't it?
A. No.
The Principal agreed that he had no record of his alleged flight with Qantas on 2 December 2005, but maintained that he had flown Qantas 'but not the other two (airlines)'.
25Ms Gleeson put to the Principal the matters that were raised by his Solicitor - Mr Dennis Fitzpatrick, in a letter to Ms Sayer, namely:
Q. And if you turn to page 92 you see she appears to be addressing an issue which one would expect to be of interest to the receiver which is the location of files for your practice?
A. Yes.
Q. Paragraph 7 on page 92 says, "On 29 November 2005 our client took about fifteen files to his property in Queensland"?
A. It says that, yes.
Q. Does that assist you in recalling whether or not you did that?
A. No.
Q. Do you think that it's likely that your solicitor said that on the basis of your instructions?
A. It's highly likely that Dennis Fitzpatrick wrote down in notes what I told him and that I either took them then or subsequently or previously. I just don't know.
Q. It's likely, isn't it, that you told Mr Fitzpatrick that on 29 November 2005, you took about fifteen files to your property in Queensland, isn't it?
A. To my mind that is unlikely because if it was Qantas - if I flew Qantas it would not be a problem with weight and those things can be heavy, but if it was Virgin I would have to pay a lot. So, I'm sorry, I just - I don't know.
Q. Now paragraph 8 of that letter goes on to say that the fifteen files were of completed matters except for tidying up. "Our client intended to do that tidying up in his property at Clifton Beach." Did you say that to Mr Fitzpatrick?
A. Probably.
Q. And Mr Fitzpatrick goes on to say, "He remained at Clifton Beach property until 23 December 2005." Did you say that to Mr Fitzpatrick?
A. I don't remember that.
Q. Well, would you agree with me that on the basis of this letter it is likely that you did say that to Mr Fitzpatrick>
A. I'm guessing.
Q. Do you think you could do better than that?
A. I'm afraid not.
Q. You as a person who puts yourself forward as someone who ought to hold a practising certificate are not prepared to accept that it's likely that you told Mr Fitzpatrick that you remained at the Clifton Beach property until 23 December 2005?
A. Today, I'm speculating. As at then, five, six and a half years ago, I'm sorry, I can't assist you.
Q. And that's an honest answer?
A. Are you telling me?
Q. Is that an honest answer?
A. Yes
26However, in response to subsequent questioning from the Tribunal, the Principal agreed with the proposition that if Mr Fitzpatrick had authored a letter to the Receiver on his instructions and had made representations, we could be satisfied that the instructions that he gave Mr Fitzpatrick were accurate. However, he added that he has 'no independent recollection of meeting with Mr Fitzpatrick" and stated:
I regard the letter as accurate and if Dennis wrote that it most likely is accurate because he's not the sort of person to tamper with the truth. I can't specifically recall the meeting at his office or wherever it was and what instructions I did give him.
Nevertheless, he insisted that he recalled depositing the cheque for $603,000 on 2 December 2005 and he denied that he was 'covering for' the Solicitor.
27In his affidavit sworn on 27 May 2012, the Principal stated that on 17 November 2005 he flew from Sydney to Cairns and he returned on 24 November 2005. On 29 November 2005 he flew from Sydney to Cairns and that he flew from Cairns to Sydney on 2 December 2005 and that he then flew back to Cairns on 5 December 2005. He cited as evidence of his movements a summary of his AMEX account transactions for the 2006 financial year. He deposed as follows:
...The flights referred to above ... do not appear in the American Express list because I did not always use American Express to pay for tickets as I often charged other credit cards and paid cash at the service counter of the applicable airline company at airports.
However, we note that he did not tender any account summaries from any of these 'other credit cards' or any receipts, boarding passes or e-ticket printouts to support his allegations.
28In relation to this issue, we refer to the evidence of Sasha Pesic, an officer with Air Services Australia that the only Qantas flight that arrived in Sydney on the afternoon of 2 December 2005 arrived at 16:35. Mr Pesic was not required to attend for cross-examination and his evidence was not challenged by the Solicitor. Nevertheless, the Principal sought to refute Mr Pesic's evidence, as follows:
... (a) There is nothing to indicate whether or not I was a passenger on any flight.
(b) The departure and arrival times are not stated to be either from a timetable or the pilot's log.
(c) The type of aircraft is not shown.
12. In respect of my coming to Sydney on 2 December 2005 -
(a) I have no independent recollection of my movements.
(b) Whether I paid cash for my tickets, charged to a credit card or redeemed frequent flyer points, I do not know. However when I paid cash for tickets I did not always register those flights for Frequent Flyer points. Sometimes I paid for tickets part on credit and part by cash.
He also asserted that since about 2000 he has held a Keycard that had been issued to his daughter, Louisa, by the Commonwealth Bank of Australia and that he used this to withdraw the sum of $200 at an ATM located at Liverpool and Castlereagh Street, Sydney on 2 December 2005. He also stated that he made a purchase at Clifton Beach Post Office on 5 December 2005 after he had returned to Cairns from Sydney that day.
29In cross-examination, the Principal maintained that on 29 November 2005 he had deposited the cheque (drawn for him by his daughter in the sum of 277,000-odd) to the joint account at the Potts Point branch of the Commonwealth Bank and that this was deposited with a personalised deposit slip (although he had deposed that this occurred on 28 November 2005). He disputed that the Solicitor had written out the deposit slip and stated:
...I went to the bank sometime between 9:30 and 10am on my way up to the hospital. I went to - left home, went up to the bank, put the cheque in, walked the 200 or so metres back home. My wife drove me up to St Vincent's, tipped me out and that was that.
30In relation to the mobile phone calls, we note that the evidence of Mr Gelfe (of Telstra) was that the call initiated at 15:04 on 2 December 2005 in the Saddle Mountain region was made from the Principal's mobile phone. We note that there is no evidence that he had lost or otherwise did not have his mobile phone with him at that time.
31The Tribunal notes that the Amex account summary annexed to the Principal's second affidavit indicate that between 30 November 2005 and 8 December 2005 there were almost daily transactions within the Cairns region. There is no evidence before us that he either lost his Amex card or provided any other person with an authority to use it during that period and the obvious conclusion is that he made the transactions and was therefore within the Cairns region during that period.