The findings of the Tribunal
13 The Bar Association raised a number of allegations against the plaintiff. They all related to his dealings with a client, Mrs Bach.
14 The Tribunal found that the plaintiff first met Mrs Bach in 1988 when he accepted a legally aided brief to appear for her to defend a preference claim brought against her in the Supreme Court. The claim was successfully defended.
15 Following the completion of the proceedings the plaintiff met Mrs Bach on a number of non-professional occasions, described by the Tribunal as "informal", being occasions when he was not briefed by a solicitor to give legal advice. The Tribunal described those meetings in the following terms:
"During those meetings Mrs Bach told the barrister that:
Her home which was built on 12 acres of land at Camden was mortgaged to the National Australia Bank for about $70,000, she was experiencing difficulty in meeting the mortgage repayment, and was concerned that the bank might foreclose.
Her land had recently been rezoned permitting subdivision of about two acres into one-quarter acre lots.
She was frightened of her husband who had been financially irresponsible in the past, was an alcoholic and was undergoing psychiatric treatment.
The State Bank of New South Wales had forced her to sell other property to reduce the debts of a business which had been conducted by her husband, and she considered that the State Bank had acted improperly in doing so.
The barrister felt sympathy for Mrs Bach and wished to assist her and in late 1988 or January 1989 advised her to consult Blessington Judd, solicitors regarding her complaint against the State Bank.
Blessington Judd was a firm of solicitors which had briefed the barrister in the past and he anticipated that he would be briefed to advise Mrs Bach on her claim against the State Bank. He also thought there was a possibility that he may be briefed to appear if proceedings against the bank were commenced, but there was no agreement or understanding with the solicitors that he would be briefed to advise or appear.
Blessington Judd did brief the barrister to advise in January 1989, and he gave a written opinion on 16 February 1989 in which he said that Mrs Bach had a valid claim for damages against the State Bank.
The barrister believed the cost of litigating that claim could be $30,000, and because it was a commercial dispute, Mrs Bach would not be eligible for legal aid.
Mrs Bach continued to meet with the barrister and discussed her financial and marital problems including her inability to fund any proceedings against the Bank."
16 During one of the meetings with Mrs Bach the plaintiff suggested that she could probably solve her financial problems by obtaining bridging finance, and use that money to fund the litigation against the State Bank. He suggested that the loan could be repaid by subdividing part of the land around her home and advised her to appoint "a project manager" to organise the development.
17 The Tribunal found that this advice was "not given as a result of any brief to advise, but was given during one of the informal meetings with Mrs Bach." The Tribunal found that in giving the advice the plaintiff was motivated by a genuine desire to assist Mrs Bach. The Tribunal expressly found that the plaintiff "did not intend to prey upon Mrs Bach's desperation and vulnerability."
18 Thereafter the plaintiff attempted to arrange bridging finance and find a project manager to finance and carry out the subdivision. He was not successful and offered to undertake the role of project manager himself. There was uncertainty about the financial arrangements between the plaintiff and Mrs Bach. However, the Tribunal found that in conversation with Mrs Bach the plaintiff intended to convey that in arranging finance and the subdivision he would not be acting as a barrister. Instead he would charge for his time in arranging finance and obtaining subdivision approval. Once subdivision approval was granted the plaintiff's only remuneration for subsequent work in arranging further finance and carrying out the subdivision would be "that he would receive a block of land from the subdivision." It was agreed that the plaintiff would take title to the land so that he could effectively complete the task of managing the project.
19 The work which the plaintiff had undertaken for Mrs Bach as a barrister was done on the instructions of Blessington Judd solicitors. A different firm of solicitors Walsh James, and in particular Miss Tsai acted on the subdivision. Although the plaintiff sent a memorandum of fees to Miss Tsai for work he undertook in furtherance of the subdivision the Tribunal found that this work was not of a kind "ordinarily performed by a barrister." The plaintiff maintained that he had told Mrs Bach that he would charge for this work but the Tribunal found that Mrs Bach had not consented to these charges. The Tribunal found that the plaintiff failed to appreciate and distinguish his role and work as a barrister from his role and work outside the ordinary practice of a barrister.
20 Among other arrangements made to facilitate the development a bank account styled, "Mr Maurice Kriss Wilton Properties Account" was opened from which the plaintiff had authority to withdraw monies to facilitate the subdivision. However, the Tribunal found that in operating on that account, and in particular in relation to fees which he paid himself from it, he demonstrated "a disregard of the trust placed in him by Mrs Bach." The Tribunal said:
"His operation of the account demonstrates a disregard of the trust placed in him by Mrs Bach. The barrister did not give any proper consideration to the nature, itemisation, or quantification of any expenses for which he may have been entitled to be reimbursed. He ignored the absence of authority to pay his fees from the trust account, and he did not give any proper consideration to the quantum of the fees to which he was entitled.
He failed to keep any proper record of disbursements from the trust fund. The only records kept of the amount claimed to be paid as reimbursement for expenses and for counsel's fees are the notations on the cheque butts. Those notations do not record the true nature of or justification for those payments.
He said he did not make any notation on his fee notes nor did he keep a record of the amounts he paid as a contra against outstanding fees.
The Tribunal does not find that the barrister intended to permanently deprive Mrs Bach of the unauthorised and excessive payments from the account. It accepts that the barrister intended at some stage to account to Mrs Bach and make adjustments if necessary, but his failure to keep proper records made it difficult if not impossible to properly account. This is illustrated by his inability to substantiate the amounts he claims as reimbursement for expenses."
21 The relationship between the plaintiff and Mrs Bach later turned sour. Initial problems arose because of the action of Mrs Bach's husband, who may have been mentally unstable, and who did not trust the plaintiff. When the relationship broke down completely complaints were made which led to the proceedings against the plaintiff in the Tribunal. The Tribunal made the following findings:
"To the extent to which the conduct stated in sub-paragraph (c) is conduct occurring in connection with the barrister's practice of law, he entered into the agreement with Mrs Bach knowing that she did not have independent legal or commercial advice, and he did not adequately advise her of his intention to charge for non-legal work, the rate he would charge for that work, and any entitlement he had to reimbursement for personal expenses from the trust fund.
The Tribunal is not satisfied that he failed to do so because of a desire to disadvantage her. He failed to do so because of a lack of appreciation of the distinction between his role as a barrister and his commercial and confidential relationship with Mrs Bach, and because of her failure to appreciate his obligation to ensure that she was fully informed and advised.
The confidence Mrs Bach had in the barrister arose from the relationship of barrister and client in the 'Russett litigation'. The subdivision advice and the project management agreement related to a possible relationship of barrister and client because the barrister may have been briefed in the State Bank litigation. There was also a relationship between those matters and payment of the barrister's fees for legal and non-legal work.
The Tribunal therefore finds that the matters complained of in sub-paragraph (c) were in connection with the barrister's conduct of the law, and was unsatisfactory professional conduct because of the barrister's failure to fully advise Mrs Bach himself and to ensure Mrs Bach obtained independent legal and commercial advice before entering into the agreement with him ." (emphasis added)
22 The matters complained of in sub-paragraph (c) were as follows:
"Agreeing to act as Mrs Bach's subdivision project manager and acting for her in that capacity:
(i) When he had previously advised and appeared for her as counsel in litigation brought against her by Russett Pty Limited (In Liquidation);
(ii) When he had previously been briefed and continued to be briefed as her counsel in respect of the abovementioned litigation against the State Bank;
(iii) When to his knowledge she had no independent legal and/or commercial advice as to whether she should embark upon the subdivision project and if so, to appoint him as project manager thereof;
(iv) When he stood to gain a financial advantage from acting as project manager;
(v) When he knew there had been no independent assessment of the commercial viability of the subdivision project;
(vi) When he knew that Mrs Bach reposed great confidence and trust in him to act in her best interest as a barrister and/or commercial adviser.
(vii) When he knew that Mrs Bach had serious matrimonial, financial and legal problems;
(viii) When he had allowed a social relationship to develop between himself and Mrs Bach in which he knew she regarded him as her confidant in respect of highly personal matters."
23 One particular allegation related to a cheque which the plaintiff had drawn on the trust account for the sum of $2,630.00. It was alleged that the plaintiff used that money for personal expenditure in breach of the trust upon which he held the money for Mrs Bach.
24 The Tribunal said of this allegation:
"The Tribunal has already found that neither the letter of 31 January 1990 nor any other consent or permission from Mrs Bach authorised the barrister to draw that cheque, and the barrister knew he had no authority.
The barrister knew the money in the Wilton Property account was money held on trust for Mrs Bach.
The findings which have already been made lead to a conclusion that the barrister consciously acted in breach of trust when he drew that cheque and appropriated the proceeds to his own use.
The Tribunal considers that conduct amounts to a grave impropriety affecting the barrister's professional character and is indicative of a failure either to understand or to practice the precepts of honesty or fair dealing (cf Kennedy v Council of the Incorporated Law Institute of New South Wales (1939) 13 ALJ 563 at 563-564 per Rich J; O'Reilly v Law Society of New South Wales (supra) per Clarke JA at 220).
Such conduct amounts to professional misconduct."
25 There was a further allegation that the plaintiff utilised trust monies for personal expenditure in the sum of $750.00. The Tribunal said of this allegation:
"Sub-paragraph (i) (i) alleges the barrister utilised the trust fund for personal expenditure and in breach of trust in an amount totalling $750.00.
This refers to the amounts the barrister claimed entitlement to reimbursement for the cost of telephone calls, motor vehicle expenses and typing expenses relating to his work as project manager.
It is arguable on one interpretation of the Deed of Trust that he was entitled, as part of the expenses of the subdivision, to reimbursement of such costs in addition to his remuneration of a block of land. The Tribunal is not satisfied that the barrister did not have that belief, and is not satisfied that when the barrister drew the cheques, he did not believe he had incurred some expenses and was entitled to draw the cheques in reimbursement for those expenses.
But it is satisfied that when he drew the cheques he was simply guessing at the amount to which he was entitled, and neither before he drew the cheques nor subsequently did he work out how much he was in fact entitled to take.
The information which he provided to Mr Newbould which, at best may account for $535.02 was unsuccessful reconstruction.
The barrister did not attempt to substantiate any higher amount.
The onus is on the Association in accordance with the test laid down in Rejfek (supra) to satisfy the Tribunal of the facts alleged to amount to misconduct. The onus is not upon the barrister to disprove those facts. But the evidence (if there is any) to substantiate the $750.00 is evidence solely in the possession of the barrister, and apart from unsubstantiated assertion, he has provided no evidence to account for at least $215.00. His obligation as a trustee required him to keep sufficient records to enable him to account for disbursements from the trust fund, and he failed to do so.
The Tribunal is not satisfied that the barrister did not believe he was entitled to be reimbursed for some expenses, and is not satisfied that he knew the expenses to which he was entitled to reimbursement may not have amounted to $750.00.
The fact that he cannot now substantiate expenses totalling that amount is consistent with the finding already made, namely, that he never properly applied his mind to a quantification of those expenses, and kept no record of the expenses.
If the barrister knew he was not entitled to be paid the whole or part of that money, and his belief accorded with a proper interpretation of the agreement, his conduct in paying the $750.00 would amount to professional misconduct.
Whilst the Tribunal cannot be satisfied that he did not believe he was disentitled to reimbursement and is unable to find that the expenses may not have amounted to $750.00, it considers his conduct in paying the expenses amounts to unsatisfactory professional conduct because in paying the money, it is satisfied he did not pay any proper regard to his entitlement, and the only records he kept were the notations on the cheque butts, only one of which comes even close to describing the purpose of the payments. He acted with reckless disregard of his obligations as a trustee when he made the payments, and he never gave proper consideration to his entitlement to reimbursement.
The Tribunal therefore finds that this conduct amounts to unsatisfactory professional conduct.
This finding is not made upon the basis that the agreement on its true construction did not authorise reimbursement of the expenses. The Tribunal is not satisfied the barrister could not reasonably believe the agreement upon its proper construction entitled him to reimbursement and that he did not hold that belief."
26 The Tribunal also found that the plaintiff was careless when acting on an authority which he received for payment of fees by Mrs Bach. The Tribunal found that he overpaid himself the sum of $2,920.00 and in so doing had acted carelessly. The Tribunal found that the plaintiff's records were inadequate and together with this carelessness concluded that in overpaying himself the breach of trust amounted to unsatisfactory professional conduct.
27 Furthermore, the Tribunal found that the plaintiff in concealing the overpayment had committed professional misconduct. In particular, the Tribunal said:
"In the Tribunal's opinion, a deliberate concealment by a trustee of a breach of trust when accounting to his beneficiary, particularly where the trustee has benefited from that breach amounts to professional misconduct."
28 The Tribunal also made adverse findings in relation to the plaintiff's failure to provide a full and proper account. It said:
"The Tribunal has found that the barrister did not keep adequate records of his disbursements from the account, he did not give proper consideration to his entitlement to pay some of the money from the account, and it seems he did not even keep all of the Bank statements issued by the Bank. He was asked to account in October 1991 and even to this day he has not properly accounted, and has not provided an adequate explanation for failing to do so. If his loss of Bank statements created some problem in accounting, he could have obtained duplicate statements from the Bank years ago.
Mr Lowbeer and Mr Newbould were frustrated in their attempts to properly account because of the absence of proper records and the barrister did not give them full and accurate information to make up for the absence of proper records.
The barrister had the cheque butts relating to the seventeen cheques drawn on the account and he must have known that he had failed to properly account to Mrs Bach. That failure continues to the present day.
The Tribunal considers that the barrister's failure to account over such an extended period despite a number of requests to do so, and the fact that he must have known that he had failed to properly account (even if he was not deliberately concealing a breach of trust) amounts to a grave impropriety affecting the barrister's professional character and is conduct indicative of a failure by the barrister to either understand or to practice the precepts of fair dealing in relation to his clients, and amounts to professional misconduct."
29 The hearing before the Tribunal was conducted in two stages. In the first stage evidence was received and after consideration the Tribunal made the findings with respect to the plaintiff's conduct to which I have referred. The Tribunal then conducted a hearing in relation to "penalty." Following that hearing the Tribunal published its findings. Those findings were:
"The barrister did not keep proper trust account records and did not give proper consideration to the quantum of disbursements he was entitled to make from the trust money.
The foregoing could be explicable on the basis of inexperience as a barrister, and a generally careless approach to book work. This conduct, whilst it involves breaches of fiduciary duty or trust deserving of censure, does not illustrate the degree of want of probity which would necessarily demonstrate an unfitness to practice.
The barrister's subsequent conduct was more serious. When he became frustrated about non-payment of his fees, he drew on the trust account to make a part payment of those fees. He knew he had no authority to do so, and when he made the withdrawal he believed the client had required a taxation of his fees, which had not been carried out.
The fact that he may have been justifiably upset about the delay in payment of his fees and the fact that he had competently performed his work as a barrister to earn those fees may explain but does not excuse his conduct.
The money he held on trust was not entrusted to him by the client as security for his fees. A client is entitled to require taxation of counsel's fees, and if her counsel happens to be holding money on trust, the client is entitled to trust the barrister not to use that money without her authority.
The barrister knowingly committed a breach of trust out of self-interest to expedite payment of his fees.
The barrister later withdrew further money from the trust account in payment of his fees after he was given express authority to do so. Without intent, but as a result of gross carelessness, he overpaid himself.
When the client asked the barrister to account, he deliberately concealed the overpayment in the account which he gave.
The evidence given by the barrister and his wife on 11 December 1995 suggest that he was in stressed financial circumstances by the time he deliberately concealed the overpayment. It is a fair conclusion that the concealment was in order to avoid making an immediate refund because he was not able to do so.
He deliberately misled his client out of self-interest when he concealed the overpayment from her.
Thereafter he consistently failed to give a proper account to his client.
…
In final address before the finding of deliberate concealment was made, his counsel submitted that a finding of deliberate concealment should not be made. The barrister was present when that submission was put.
The Tribunal does not accept the barrister was truthful when he claimed on 11 December 1995 that he intended to admit the deliberate concealment at the hearing. He did not do so, and it was only after an adverse finding was made on that issue that he claimed that he had intended to make the admission.
The Tribunal does not accept the barrister intended to admit the deliberate concealment unless an adverse finding on that issue was made. The conduct of his case and his evidence was inconsistent with such an intention."
30 Finally, the Tribunal concluded:
"The present case is one in which the barrister's probity has been called in question. Although the conduct is isolated in the sense that it involves only one client, the conduct illustrates a frequency of the barrister's self-interest prevailing over his probity.
When he became frustrated about payment of his fees, he committed a deliberate breach of trust to achieve part payment.
When he was asked to account and he realised he had made an overpayment and was financially stressed, he deliberately concealed the overpayment.
When he responded to the Association about Mrs Bach's complaint on 12 June 1992, he masked the overpayment.
Having failed to successfully contest the allegation of deliberate concealment, he gave untruthful evidence in an attempt to mitigate against the order which would be made.
This behaviour is not simply illustrative of a lack of professional judgment or a lack of proper understanding of legal ethics, or a lack of understanding of the law. It was not submitted on behalf of the barrister that he did not know that he should not take trust money without authority, that he should not conceal breaches of trust and that he should not be untruthful.
There is no practical course of study or supervision which can protect the public against a repetition of that kind of behaviour. The Tribunal has no confidence in the barrister's claim of remorse. Remorse was only expressed after the adverse findings were made.
The deliberate concealment issue was contested at all times. Despite the voluntary cessation of practice in December 1991, the barrister continued in his failure to properly account and maintained a denial of deliberate concealment. It was not a denial in the sense of simply putting the Association to proof. The denial was expressed in his Amended Reply, in his evidence, and in address.
Because of his admission on 11 December 1995 that he knew he had deliberately concealed the overpayment, he must have known that his denial was false.
When giving evidence on 11 December 1995, he was untruthful."
31 A number of observations are appropriate. It is clear that the Tribunal concluded that the plaintiff had breached the trust which he owed Mrs Bach and had attempted at least in part to conceal that breach from her and others. He also gave untruthful evidence to the Tribunal. It was for these reasons that the Tribunal ordered that the plaintiff's name be removed from the Roll of legal practitioners.
32 However, although the Tribunal found that he committed these very serious transgressions the competence of his legal advice and other work which he did as a barrister for Mrs Bach was not criticised. The Tribunal said:
s "The Tribunal is unable to find that his standard of competence and diligence falls short of the standard that a member of the public is entitled to expect of a reasonably competent legal practitioner.
s No adverse finding has been made about his ability to competently conduct litigation as a barrister … "
33 The plaintiff had voluntarily ceased to practice in 1991. His name was ordered to be removed from the roll in December 1995. His application to be readmitted was refused by the Admission Board in 2001. The appeal against that decision was heard and determined in October 2002. Cooper AJ firstly considered what he referred to as "the defects in character that led to the plaintiff's disbarment in December 1995." He then addressed the question of whether the plaintiff had redeemed his early errors or whether he had a permanent deficit of character. As to the latter matter his Honour said:
"It is now necessary to come to the answer to the second question which I posed earlier, namely, has the plaintiff satisfied the court that those defects no longer exist and that he is otherwise an upright, honourable and trustworthy person, or, to put it another way, has the plaintiff satisfied the court that he has redeemed his earlier errors and that they did not reflect any permanent defect of character.
The errors, which led to the plaintiff's disbarment arose out of a somewhat unique set of circumstances. He embarked upon seeking to aid a woman who was then having difficulties with her husband. He thus placed himself in a volatile domestic situation. The advice he gave and the work he did for Mrs Bach was quite reasonable and proper.
She, however, appears to have become reconciled with her husband and under his influence turned against the plaintiff making a number of serious allegations, which were considered and dismissed by the Tribunal. It is in this context that the plaintiff committed the acts of misconduct as found by the Tribunal.
In the light of all of the evidence, the plaintiff has comfortably satisfied the Court that over the past almost seven years he has lived an exemplary life. He has demonstrated integrity, honesty and probity. He has comfortably satisfied the Court that those early errors did not reflect any permanent defect in character.
Accordingly the Court is comfortably satisfied that this question should be answered in the affirmative. It follows that the appeal should be allowed."
34 Cooper AJ published his judgment on 18 October 2002. The article of which the plaintiff complains was published on November 2 only 15 days later. Whether or not the plaintiff is entitled to succeed I have no difficulty in accepting that he was greatly hurt by the article. Having only days earlier been restored to the roll of legal practitioners with a finding by a judge of this Court that over the last seven years he had lived an exemplary life and demonstrated integrity, probity and honesty the article must have been devastating to him. I accept the plaintiff's complaint that the article belittled him and was calculated to wound. If as the defendant's counsel submitted it was an attempt at humour or amusement it was entirely at the plaintiff's expense.