Our conclusions
59We will commence by repeating an observation, made by us in the principal decision at [98], that because the conduct of the Solicitor described in the Amended Application occurred before the commencement of the LP Act, we may not make 'any determination or order of a disciplinary nature' against him that is 'more onerous' than could have been made under the Legal Profession Act 1987.
60In our opinion, an order for removal of the Solicitor's name from the Roll must be made, broadly for the reasons put forward by Mr Barnes. We will add some observations enlarging on these reasons.
61In the principal decision, we found that the Solicitor engaged in professional misconduct in a manner involving the breach of three distinct kinds of duty.
62First, he took it on himself to act as a solicitor on behalf of two members of the public without having obtained their instructions. We assume, as we must, that either or both of them knew about the relevant transaction, in which they were the mortgagors of property owned by them. But nonetheless he contravened a duty owed to them, as members of the public, to render professional legal services only in circumstances where, and to the extent that, they requested him to do so.
63Secondly, he conveyed representations, which he knew to be false, to three people (including a solicitor) who were professionally involved in the mortgage that he had instructions from the mortgagors to act on their behalf. He thereby contravened a duty owed to fellow-practitioners and to other people rendering professional services not to mislead them in relation to any aspect of a matter in which he and they were professionally engaged.
64Thirdly, he paid to his own company a significant sum ($4,400) from the mortgage loan despite having no entitlement to do so. As Mr Allen pointed out, we did not find that he knew he was not entitled to this sum. The reason why we made no finding on this question was in fact that the Amended Application contained no allegation of knowledge by the Solicitor of his lack of entitlement. His withdrawal of this sum from the funds to the mortgagors was nonetheless a breach of his duty to them not to misapply any part of these funds.
65The nature of each of these breaches by the Solicitor of different forms of professional duty requires a finding that, at the time when he committed them he was not a fit and proper person to engage in legal practice. In each instance, he contravened requirements of honesty and integrity from which legal practitioners should never deviate. The observations of Spigelman CJ in New South Wales Bar Association v Cummins (2001) 52 NSWLR 279 at 284, which we have quoted above at [37], are very much in point.
66With reference specifically to the Solicitor's conduct in knowingly misleading other professionals involved in the mortgage transaction, we would repeat the following passage (which we quoted in the principal decision at [103]) in the Tribunal's decision in Law Society of New South Wales v MacKenzie [2003] NSWADT 92 at [15]:-
15 The proposition that, knowingly, and, in some cases, negligently, to mislead another legal practitioner with respect to a matter significantly relevant to professional business is serious professional misconduct needs no judicial authority. Such conduct undermines one of the foundations of trust that the community has to be able to place in legal practitioners, namely, that what one practitioner says to another in the furtherance of practice can be accepted without question as having been made both truthfully and carefully. It is analogous with, the duty of a legal practitioner to avoid misleading a court, or with the duty to adhere to an undertaking given to another practitioner in the course of legal practice. We could wax eloquent about the consequences of legal practitioners being permitted with impunity to mislead other practitioners but such elementary and fundamental matters do not require to be elaborated, especially to the audience by whom these reasons may be read.
67The question then arising is whether, having regard to this finding of past misconduct and to the other evidence put before us, the Law Society has discharged the onus of proving that, as a matter of probability, the Solicitor must at the present time be regarded as 'permanently unfit to practise'. This formulation of the criterion for a striking-off order has been used more than once by the Court of Appeal: see for example Prothonotary v P [2003] NSWCA 320 at [17(2)].
68In Prothonotary of the Supreme Court of New South Wales v Nikolaidis [2010] NSWCA 73, the Court of Appeal set out its reasons for prior orders removing the name of the respondent solicitor from the Roll. It indicated, at [22], that according to the evidence and to agreed facts, the respondent had 'engaged in a deliberate and planned course of action involving third parties to deceive a costs assessor appointed by the Supreme Court in order to advance his position against a former client'. It said that this conduct revealed 'a willingness to engage in dishonest conduct and a willingness to undertake it in a planned fashion'.
69The Court then said, at [23 - 25]:-
23 These events happened over ten years ago. Should the Court take into account the effluxion of time? In this regard, the views of Walsh JA (with whom Wallace P agreed) in Ex parte Tziniolis; Re Medical Practitioners Act (1966) 67 SR (NSW) 448 at 460-461 are relevant:
"His counsel has urged upon the Court that the last of the matters which I have reviewed was as long ago as early 1960 and that some of them are still more remote. He has raised the question whether these matters, or any of them, could be held to have indelibly stamped the applicant as a man of bad character. I think, however, that this question so phrased does not truly pose the problem which confronts the Court. Reformations of character and of behaviour can doubtless occur but their occurrence is not the usual but the exceptional thing. One cannot assume that a change has occurred merely because some years have gone by and it is not proved that anything of a discreditable kind has occurred. If a man has exhibited serious deficiencies in his standards of conduct and his attitudes, it must require clear proof to show that some years later he established himself as a different man. The position is somewhat similar to that which exists when application is made by a barrister or a solicitor who has been found guilty of serious misconduct exhibiting a lack of proper standards, seeking reinstatement on the ground that, after a lapse of time, he has become a fit and proper person to be a member of a profession which requires qualities and standards in which he has known to have been deficient. In such cases it has been frequently said that a heavy onus lies on the applicant: see Ex Parte Clyne [[1962] SR (NSW) 436 at 441], and cases there cited." (emphasis added)
24 The views of Walsh JA, to the extent they are emphasised above were approved by this Court (Gleeson CJ, Meagher JA and Handley JA) in Health Care Complaints Commission v Litchfield (1997) 41 NSWLR 630 at 637.
25 In circumstances where the respondent chooses not to come forward to assist by giving evidence in the disciplinary proceeding, the failure to provide an exculpatory statement or explanation means that inferences from proved facts can be drawn more safely because the defendant has failed to give any explanation of matters peculiarly within his knowledge: Azzopardi v The Queen [2001] HCA 25; 205 CLR 50; Weissensteiner v The Queen [1993] HCA 65; 178 CLR 217; Power at 463-467 [20]-[29]; and Einfeld at [23]. Similarly, in the context of assessing whether reformation may or may not have occurred, in circumstances where the respondent does not give evidence, it is difficult to see how it can be concluded that the reflection upon the underlying character of the respondent by the commission of a planned offence of dishonesty does not reflect on him over ten years later.
70In this last paragraph ([25]), the Court reaffirmed principles on which Mr Barnes relied (see [38 - 40] above) regarding the impact on proceedings such as these of a respondent practitioner's failure to testify. But only the first sentence of this paragraph is relevant in the present proceedings. We took account of the principles stated in it in the principal decision (see [64 - 65]). The second and final sentence is not applicable here because the Solicitor did tender an affidavit at the second hearing. He was available for cross-examination, but the Law Society chose not to cross-examine him.
71The claim by Mr Barnes that no 'reformation of character' occurred in this case was based to a significant extent on the number and nature of the disciplinary findings and orders that the Tribunal or the Law Society have made against the Solicitor, relating to conduct by him after the events dealt with in the principal decision.
72These findings and orders are listed above at [24]. They include findings and orders (see items (1) and (2)) based on breaches of duty owed by the Solicitor to his clients, amongst which his delay, over a substantial period of time, in paying stamp duty on a transfer of land would appear to be the most serious. Also involved are a breach of a duty owed to a fellow-practitioner (item (3)) and several breaches of duties owed to the Law Society (items (1), (2), (4) and (5)).
73Almost all of these instances of breach of duty occurred before or during 2006. But it is noteworthy that item (5) in the list describes breaches of statutory obligations to provide information to the Law Society as recently as December 2012. This was around the time of the first hearing in these proceedings. We may add here that it was open to the Solicitor to contest the Law Society's evidence on this matter, but he did not do so.
74A further factor countering to a limited degree any claim of 'reformation' by the Solicitor is his change of position on the question whether Mr and Mrs Hadid instructed him to act as their mortgage broker. We agree with Mr Barnes's submission on this point.
75Against this material showing that the Solicitor, despite the long time that he has spent in practice, has shown a propensity since 2002 to contravene professional obligations owed by him, we must weigh the evidence in his affidavit and in the three testimonials.
76In his affidavit, the Solicitor acknowledged that he had been in 'serious breach of his professional duties' and stated that he was 'embarrassed and ashamed' on this account. It is a matter of concern, however, that he appeared inclined to view his breaches of duty as 'mistakes' (i.e. in not ensuring that he had proper instructions) and that he made no comment on the implications of his misrepresentations to fellow-practitioners or of his payment, without entitlement, of the sum of $4,400 to his company.
77The testimonials relate chiefly to the Solicitor's pro bono work. They indicate that in his connection he has made a valuable contribution to the community over a significant period of time. But they do not address, to any significant extent, the question whether the Solicitor has seen the need, and taken the requisite practical steps, to prevent recurrence of the types of breach of duty that are described in the principal decision and in the later findings of the Tribunal and the Law Society.
78In this connection, we take account also of authorities illustrating the limited role of testimonials in a context such as the present. These are summarised in the Tribunal's decision in Council of the Law Society of New South Wales v Clapin (No 2) [2011] NSWADT 246 at [67 - 68].
79On account of the considerations that we have just outlined, we must reject Mr Allen's submission that our order by way of 'penalty' should take the form of a suspension of the Solicitor's practising certificate for a period such as one or two years. We agree with Mr Barnes that there could be no assurance that at the end of this period the Solicitor would be a fit and proper person to engage in legal practice.
80We find instead that the Law Society has discharged the onus of proving that, as a matter of probability, the Solicitor must now be regarded as 'permanently unfit to practise'. Cogent and compelling evidence exists to support this finding.
81Accordingly, we order, pursuant to section 562(2)(a) of the LP Act, that the name of the Solicitor is to be removed from the local Roll.
82Since there are no relevant 'exceptional circumstances', we order also, under section 566(1), that the Solicitor pay the Law Society's costs of and incidental to these proceedings, as agreed or assessed.