Kumar v Legal Services Commissioner

Court of Appeal (NSW)|2015-04-07|Before: Basten JA, Leeming JA

Solicitors: Greg Walsh & Co (Appellant) Office of the Legal Services Commissioner (Respondent) File Number(s): 2014/157471 Decision under appeal Court or tribunal: Administrative Decisions Tribunal; NSW Civil and Administrative Tribunal Jurisdiction: Legal Services Division Citation: [2013] NSWADT 34; [2014] NSWCATOD 45 Date of Decision: 8 February 2013; 5 May 2014 Before: J Currie, Judicial Member (2013); Senior Member (2014) S Hale, Judicial Member (2013); Senior Member (2014) E Hays, Non-Judicial Member (2013); General Member (2014) File Number(s): 112018

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Judgment

BASTEN JA: I agree that the appeal must be dismissed with costs, for the reasons given by Leeming JA.
LEEMING JA: This is an appeal by a former legal practitioner, Mr Vijay Kumar, also known as Mr Vijay Kumar Dindayal, whose name was removed from the Roll of Practitioners following findings of professional misconduct including deliberate dishonesty. I propose that the appeal be dismissed with costs. On the most important aspect of the appeal, I have concluded that one aspect of Mr Kumar's case belatedly raised before the Tribunal was not addressed by it in terms. However, I have concluded that nothing turns on its failure to do so, because I am persuaded beyond any doubt that had the Tribunal considered that aspect of his case, it would necessarily have rejected it.

Procedural Background

The Legal Services Commissioner applied to the (former) Administrative Decisions Tribunal, for findings that Mr Kumar was guilty of professional misconduct and for an order that his name be removed from the Roll of Practitioners. Following a hearing lasting five days before the Tribunal constituted by two judicial members and one non-judicial member, Mr Kumar was found guilty of professional misconduct on three separate bases. First, the Tribunal found that Mr Kumar had deliberately and dishonestly misappropriated $12,000 from the proceeds of the settlement of a conveyance by one of his clients (Mr Malik). Secondly, the Tribunal found that Mr Kumar had contravened s 674 of the Legal Profession Act 2004 (NSW) by obstructing or misleading an investigator attempting to undertake an audit of Mr Kumar's practice over the period from 23 March 2010 to 3 March 2011, thereby constituting professional misconduct. Thirdly, the Tribunal found that Mr Kumar had deliberately misled the Commissioner as to his whereabouts on 1 February 2011, in the course of an investigation, such as to amount to professional misconduct. See Legal Services Commissioner v Kumar [2013] NSWADT 34.
Following a further hearing on 29 July 2013, the Tribunal ordered that Mr Kumar's name be removed from the Roll of Practitioners, that he pay compensation to Mr Malik "in the amount of $3,000, on the basis that part-payments totalling $9,000 have been made", and that he pay the Commissioner's costs: Legal Services Commissioner v Kumar [2014] NSWCATOD 45.
The Administrative Decisions Tribunal was abolished on 1 January 2014, after the latter decision was reserved, but it was common ground that transitional provisions empowered the NSW Civil and Administrative Tribunal (constituted by the same members) to determine that matter. In what follows, I refer simply to the "Tribunal" to denote either the Administrative Decisions Tribunal or the Civil and Administrative Tribunal, whichever is appropriate, and refer to the two decisions as the "Liability Decision" and the "Penalty Decision".
Mr Kumar's appeal is as of right, in accordance with cl 29(2) of Sch 5 of the Civil and Administrative Tribunal Act 2013 (NSW). The appeal is by way of rehearing, to which s 75A of the Supreme Court Act 1970 (NSW) applies: cl 29(4). Section 75A(10) authorises this Court on appeal to make any finding or assessment which ought to have been made at first instance. Pursuant to subss 48(1)(a)(viii) and (2)(f) of the same Act, the appeal is assigned to the Court of Appeal.
Mr Kumar's 24 grounds of appeal may conveniently be divided into five groups, as they were in his written and oral submissions. He challenges each of the three adverse findings made against him. He also challenges the finding that he had only repaid $9,000 of the $12,000 found to have been misappropriated, and he challenges the order removing his name from the Roll of Practitioners. It will be necessary to deal with the latter challenge as an independent issue on appeal only if Mr Kumar's challenges to the three adverse findings all fail. If any of Mr Kumar's challenges to the adverse findings were to succeed, the Court would have to re-exercise the discretion as to penalty (assuming some findings of professional misconduct are sustained).

Challenge to the finding of dishonest misappropriation of $12,000 of client's money

Grounds 2 - 10 of the amended notice of appeal challenged the Tribunal's finding that Mr Kumar's behaviour was dishonest and resulted in a misappropriation of $12,000 of his client's money. That was, by far, the most serious finding made by the Tribunal, and oral submissions on those grounds occupied the majority of the time spent hearing the appeal. Mr Kumar submitted that the rejection of his evidence by the Tribunal was affected by material error, and that the Tribunal had failed to address the principal submission on mistake advanced before it.

(a) The $12,000 cheque direction from the proceeds of Mr Malik's conveyance

In 2010, Mr Kumar acted for Mr Malik, the vendor of land at Eagle Vale. The purchase price (including adjustments) was $319,541.12. The settlement had been twice postponed and was to take place at 2:30pm on Tuesday 30 November 2010. In the morning of 29 November 2010, a single-page fax containing cheque directions was sent from Mr Kumar's office to J A Kavanagh & Co, the purchaser's solicitors, relevantly in the following terms: Dear Sirs, RE: MALIK SALE TO WILKINSON PROPERTY: XXX EAGLE VALE We refer to the above and confirm settlement on 30 November 2010 at 2.30pm at Espreon. You are directed to draw bank cheques as follows:
Campbelltown City Council $763.67
Sydney Water $160.59
ING Bank (Australia) Limited $191,881.80
Gadens Lawyers $368.50
VK Solicitors & Associates $1,430.00
Permanent Custodians Limited $12,000.00
Southwest Property Centre $5,000.00
Mohammed Nawaz Malik $107,936.56 Total $319,541.12

The letter was signed on behalf of Mr Kumar by someone else whose identity was not disclosed in the evidence.
A legal secretary, Ms Kasey Mercieca, employed by the purchaser's solicitors, received two emails (at 9:48 and 10:02 on the morning of settlement) from the purchaser's lender, both enquiring what the cheque to Permanent Custodians for $12,000 was for. The second email requested that she ask the vendors, as the answer would be required for the lender's compliance department. Ms Mercieca's response at 10:19am was: "Spoke to Vendor's Solicitor. He said his client authorised him to draw that cheque. He thinks it could be a personal loan." Ms Mercieca then faxed the vendor's cheque directions to the lender, which confirmed that it was "ok with the cheque details".
Ms Mercieca made a file note, dated 30 November 2010, of her telephone attendance on Mr Kumar, recording: "Spoke to VK asked what the cheque to Permanent Custodians Limited for $12,000.00 was for. He said his client authorised him to draw it. I asked was it a personal loan. He said something like that."
Ms Mercieca made a statutory declaration on 22 December 2010 (just over three weeks after the settlement) confirming what is recorded in the contemporaneous emails and her file note. Ms Mercieca was not required to attend for cross-examination before the Tribunal.
Mr Kumar and an assistant, Mr Arunesh Avinash Ram, personally attended settlement that afternoon. The settlement proceeded and they received cheques including a bank cheque drawn on the Commonwealth Bank of Australia, dated 30 November 2010, in favour of Permanent Custodians Limited or bearer in the sum of $12,000. Later that day, that cheque was delivered to solicitors acting for Permanent Custodians by Mr Ram, unaccompanied by Mr Kumar. It was credited to Mr Kumar's loan account three days later.
In order to evaluate the evidence before the Tribunal, and, especially, Mr Kumar's state of mind at the time, it is necessary to say something about Mr Kumar's loan account.

(b) Mr Kumar's existing indebtedness to Permanent Custodians

At the end of 2003, Mr Kumar had borrowed $293,370 from Permanent Custodians, secured by a first registered mortgage over what was described as an investment property in western Sydney. The purchase price was $330,000. The loan to value ratio was 89.81%.
The Commissioner obtained correspondence, which was tendered in the Tribunal, that Mr Kumar's loan was part of a mortgage trust and formed "part of GE Money's Home Lending Business in Australia".
Mr Kumar rapidly fell into arrears. In March 2005 a writ of possession issued, and Permanent Custodians' solicitors advised that payment of some $11,841 was required within seven days or else the writ would be lodged with the Sheriff. There was further correspondence throughout 2005, leading to an eviction scheduled for 10 November 2005. On 9 November 2005, the eviction was stayed. Mr Kumar fell behind again in 2007, leading to a rescheduled eviction on 21 June 2007. Mr Kumar paid the full amount outstanding by bank cheque on 19 June 2007, and once again the eviction was stayed. (Mr Kumar's financial difficulties in 2005 and 2007 were not confined to his lender; in each of 2005 and 2007, creditors' petitions appear to have been filed against him; they were resolved without a sequestration order being made.)
The evidence did not disclose the state of Mr Kumar's indebtedness to Permanent Custodians in 2008, 2009 or the first half of 2010. The statement for the second half of 2010 shows indebtedness of around $280,000 - $290,000.
Interest was accruing at around $2,200 - $2,500 per month. A "Serious Arrears Fee", a "Base Arrears Fee" (twice) and a "Repeat Arrears Fee" were imposed in July, August, September and October, with another "Serious Arrears Fee" being imposed in November. Fees described as "Legal Costs" were imposed in July, September and October. Three of the four monthly repayments of $2,491.07 in the period between August and November were reversed (with a "Pmt Reversal Fee" of $40 being charged in each case). It may readily be inferred that the monthly credits were made pursuant to an automatic funds transfer instruction, and were reversed due to insufficient funds being in the account being drawn upon.
Further, on 16 December 2010, an amount of $199.88 was imposed as "Stayed Eviction Costs". Once again, it would appear that Permanent Custodians was threatening to exercise its rights under the mortgage.

It was in those circumstances that the amount of $12,000 was credited to Mr Kumar's loan account on 3 December 2010 (a Friday). Internal bank documents showed that (a) Mr Kumar's account number was written in hand on the copy of the cheque received by Westpac and (b) Westpac credited the $12,000 to "an account in the name of GEL Custodians Pty Ltd ATF Arms II Clearing Account". That represents a legally precise description of what was stated by the head of servicing and collections of GE Money in his letter to the office of the Legal Services Commissioner dated 28 July 2011: "GE can confirm as follows: (a) GE received a payment of $12,000 on 3 December 2010, this sum was paid into home loan account 1050426, the loan is secured by the property; and (b) The security property address is XXX Bradbury NSW 2560. (c) The sole and primary borrower is Vijay Kumar Dindayal."
The substantial balance from the settlement, $107,936.56, was credited to Mr Malik's ANZ bank account on 9 December 2010, together with another amount of $5,500. There were further deposits into the same account on 16 December ($2,000), 17 December ($500) and 30 December 2010 (two deposits of $500). Those six deposits total $9,000. The Tribunal found that they represented $9,000 paid to Mr Malik by Mr Kumar. There was no challenge to that finding.
There is no doubt that Mr Kumar received his client's money. There can be no doubt that Mr Kumar was in urgent need of funds at the time his client's money was transferred to his loan account. He had failed to make any monthly repayment over the last three months, he had incurred a "Serious Arrears Fee" on 22 November 2010, and his lender was, once again, threatening to evict him. As will be seen below, in the second half of the first hearing, Mr Kumar contended that he thought, at the time, that there were two instructions to pay $12,000 to Permanent Custodians.
Mr Kumar's case on mistake relied on the evidence of Mr Ram. Mr Ram swore an affidavit that he began to work for Mr Kumar following his being retrenched from the construction industry. He said "I had not had any experience in conveyancing". He said: "7. At that time, Mr. Kumar directed me to pay his lender, Permanent Custodians Limited, an amount of $12,000.00 on his behalf. 8. I believe Mr. Kumar put $6,000.00 in cash towards this payment and said to me words to the effect 'another $6,000.00 will come from the legal fees as they are paid'. 9. During this time Mr. Kumar was ill. He was not attending the office regularly. 10. I prepared a cheque direction to J.A. Kavanagh & Co, a copy of which is annexed hereto and marked "A". The direction was signed by a young lady who worked in the office whom I believe had some knowledge of conveyancing. 11. When I prepared the letter I believed that I should be receiving a cheque for $12,000.00 in favour of Permanent Custodians Limited form [sic] that transaction. 12. Mr Kumar and I attended the settlement. After the settlement I directed the cheques to the payees of the cheques. This involved delivering the cheque for $12,000.00 to a lawyers [sic] office. 13. When I went to the lawyers [sic] office to deliver the cheque for Permanent Custodians I approached the reception desk and I said to the receptionist words to the effect; Me: "I have a cheque for Permanent Custodians Limited" Receptionist: "Where are you from?" Me: "VK Solicitors and Associates" I then left. 14. I gave no direction for the cheque to be applied to Mr Kumar's account." No attempt was made to reconcile the first and last paragraphs reproduced above.
In examination-in-chief Mr Ram said that "the direction that was given to me by [Mr Kumar] on the phone and the figures that I took from the settlement sheet I [not transcribable] on a note pad and then - that's what I prepared and then I gave it to the girl when she came." Mr Ram said that he could not remember the name of the girl that typed up the letter. In further examination-in-chief, Mr Ram was asked: "Q: … Now what did Mr Kumar say to you on the phone insofar as he wanted, as you understood, for the settlement that was to come in relation to Mr Malik's property? A: He called me on that day. He didn't actually called my mobile, he called on the office, I was alone and he told me that within two days or three days' time we have to go to the settlement for Malik's sale. He told me go into his office and get his file out, Mr Malik's file, and there is - we have to - I have to prepare a cheque direction and we have to fax this cheque today to the other party. He told me that the figures that are on the file already and he said this is my-- CURRIE Q: He told you the figures are on the file already? A: Yes, just like the council and the water and all these things, and he told me his fees to be added on that cheque direction and he told me that I have to also make a cheque direction of 12,000 to Permanent Custodians which 6,000 he had in his drawer and 6,000 would be coming out of legal fees and then he told me that I had to swear to deliver the cheque so at that point I believe that 12,000 - what I understood was 12,000 - cheque of 12,000 to be made to Permanent Custodians on the same cheque direction."
There was no material additional evidence adduced from Mr Ram and there was no cross-examination of him.

(d) The case advanced by Mr Kumar which was not addressed by the Tribunal

The material error which Mr Kumar alleged the Tribunal had made was its failure to address one aspect of Mr Kumar's case: "[Mr Kumar's] case was premised upon two separate sets of instructions having been given to Mr Ram: instructions concerning the preparation of the Cheque Directions and separate instructions for the preparation of a cheque payable to PCL" (appellant's written submissions in reply).
There was a subsidiary dispute on appeal whether that case had ever been clearly advanced before the Tribunal. The transcript of submissions reveals that it was advanced, although it could and should have been put more clearly than it was. Something to that effect was put when counsel appearing in the Liability Hearing said: "WATERSTREET: Well your Honour with respect, the gravamen of Mr Kumar's evidence has been at the settlement he did not know that the $12,000 was part of Mr Malik's money. He found it out later and he attempted to remedy it."
The principal reason for the lack of clarity is that the details of Mr Kumar's claimed mistake arose only in his cross-examination on the third day of the trial. It was not contained in his response to the originating process, nor in his affidavit. Nevertheless, Mr Kumar was permitted to give this evidence: "Q. And how do you say now that you thought on settlement that Permanent Custodians fitted into that picture? A. Because Mr Malik call me on 26 November, 24 November, at the particular time, the 24th, I can't remember exactly what time was it he told me "Vijay, the settlement will be delayed because I have got some discrepancies with the 85,000", he's got some discrepancies with some, I can't remember the name of the bank, and he said there is also some enquiries about something, the issues with GE Money, I can't remember, so as soon as I thought of GE Money immediately came to my mind because GE Money has been taken over by Permanent Custodians because they trust sort of thing, immediately I thought that this is the trust money, that we're paying to Mr Malik for Permanent Custodians, that's what I thought at that particular time, sir, on settlement, that's the only thing I thought. Q. When is the first time you've ever told anybody that Mr Malik called you on 26 November - A. Because there - Q. No, please, just let me finish my question, when is the first time you've told anybody that Mr Malik called you on 26 November and said something to you about GE Money? When's the first time you've told that to anybody? A. First time today, I'm telling this - Q. Today? A. Yeah. Q. Didn't think to mention it to your barrister at any time? A Because I felt if it is not based on the conversation that I had about this 12,000. What I was, I been accused the allegation against me is the 12,000 misappropriation. Q. And you've been well aware for some time that the allegation is that that payment was a misappropriation used to pay off your loan, haven't you? A. Yes, I'm fully aware of it, but what I'm saying sir is this Permanent Custodians Limited, I was at no stage aware that that money is wrongly made, I thought that this Permanent Custodian's money is Mr Malik's. Q. And that's a lie, isn't it sir? A. No, it's not a lie sir."
Consistently with Mr Kumar's evidence reproduced above, it was not put to Mr Malik, who was called in the Commissioner's case and cross-examined at length on the first and second days of the hearing, that he had "issues with GE Money" or that he had given instructions to Mr Kumar's firm to repay his own personal loan.
Given the seriousness of the issues, and possible implications for Mr Kumar's reputation and professional standing, the appropriate course is to proceed on the basis that such a case was advanced, notwithstanding the less than satisfactory way in which the issue arose.
The Tribunal dealt with ground 4, the alleged dishonest misappropriation of $12,000 of Mr Malik's money first, at [18]-[49] of the Liability Decision. It summarised the evidence advanced in support of the Commissioner's case at [18]-[30] in a way which, in light of what follows, need not be recounted here. It asked whether either of two explanations advanced by Mr Kumar could be seen as "a possible route to an explanation for the misdirection of the $12,000": at [35]. The first was that Mr Malik knew in advance of the direction to pay: at [36]-[37]. I can appreciate why the Tribunal approached the case on that basis, because the affidavit states "He knew everything in advance what happened [sic]" and "I say that Mr Malik knew in advance the cheque direction [sic]". But it was put on appeal, and in my view correctly when considered against the balance of the evidence, that in fact what Mr Kumar was saying was that after the conveyance had settled, Mr Kumar told Mr Malik of the mistake, and that he would remedy it, before Mr Malik confronted him in his office.
The second possibility was that there was an error by Mr Kumar's secretary (viz, someone other than Mr Ram, who does not appear ever to have been identified by name). The Tribunal considered this at [38]-[44] and rejected it as a viable explanation because it "simply does not survive comparison with other reliable and credible evidence": at [40]. In the course of explaining that conclusion (which is not challenged on appeal), the Tribunal stated that it regarded Mr Kumar as a "patently unpersuasive witness": at [42]. It said: "In giving his evidence he was at times evasive, he often failed to accept reasonable propositions, he often rushed into an answer and then sought to retract it."
No challenge was made, nor could it have been made, to those conclusions based on the Tribunal's assessment of Mr Kumar in cross-examination.
There was some evidence which could be seen as supporting Mr Kumar's claim that the payment of $12,000 to Permanent Custodians was the result of a mistake. There is a file note of a conversation with Mr Kumar recorded by Ms Sheree Hayden, a licensed conveyancer acting for Mr Malik, on 8 December 2010 as follows: "Mr Kumar advised as follows: Settlement happened on 30th Nov 2010 & he sent client a cheque direction Client got more than $107,000.00 Mr Kumar advised me that his Company or his Secretary made a mistake & made a cheque out to someone else by mistake, in the Amt of $12,000.00 Information provided to client? - no he's been too busy."
However, the Tribunal did not address in terms the claim emerging from Mr Kumar's cross-examination that he was confused, and mistakenly believed that Mr Malik had directed that a cheque for $12,000 be paid to Permanent Custodians to repay Mr Malik's own indebtedness to that company. It does not follow inexorably that the Tribunal's conclusion that Mr Kumar misappropriated $12,000 from his client Mr Malik was erroneous. If the Tribunal could not reasonably have concluded that there was even a possibility that Mr Kumar was mistaken, then this complaint falls away. Only if there is some substantial wrong or miscarriage of justice can the proceedings be remitted to the Tribunal: Uniform Civil Procedure Rules 2005 (NSW), r 51.53. It was for this reason that on appeal the Commissioner submitted: "Once the whole of the evidence is considered, the purported explanation by Mr Kumar of a mistake is not even available as a remotely arguable alternative inference, let alone one that should have caused the Tribunal to refrain from finding as it did."
The critical questions arising on Mr Kumar's claimed case of mistake are: how did the cheque come to be presented upon Westpac and how did the funds come to be credited to Permanent Custodians in reduction of Mr Kumar's indebtedness to that company?

There was no mistake by Mr Kumar

Mr Kumar's case appears to have involved not one but two mistakes. The first was by Mr Ram in confusing Mr Kumar's instructions regarding the Malik settlement and his instructions to prepare a cheque to Permanent Custodians on behalf of Mr Kumar personally. The second was Mr Kumar's mistaken belief, upon learning that $12,000 of the Malik settlement proceeds were to go to Permanent Custodians, that Mr Malik gave instructions for the payment in order to reduce his own indebtedness to Permanent Custodians.
Mr Kumar's case that he mistakenly thought that the $12,000 settlement cheque made out to Permanent Custodians was at the direction of Mr Malik depends on certain propositions which are wholly implausible.

(a) There were no funds available to Mr Kumar on 30 November 2010

Mr Kumar's case turns on the proposition that Mr Kumar had $12,000 of his own money which could be used to reduce his personal indebtedness. Only if he believed that there were such funds could Mr Kumar have been under the mistaken belief that he had used his own funds, rather than Mr Malik's money, to repay his own indebtedness. But there is nothing to suggest that such funds were available, and there are four circumstances incontrovertibly established by the contemporaneous documents suggesting that they were not.
The first is Mr Kumar's increasing indebtedness at the time. As noted above, Mr Kumar's loan statements for the period July 2010 - May 2012 were in evidence. Mr Kumar was in substantial arrears. His lender had, once again, begun to take steps to obtain possession of the mortgaged property. The Tribunal found (at [22]), and no challenge was made to the finding, that Mr Kumar's personal loan was in arrears in the amount of $9,569.12 on 3 December 2010, and the payment on that day of $12,000 cleared the arrears.
The loan statements showed interest accruing monthly in amounts of approximately $2,200. They also showed automatic credits on 2 August, 31 August, 30 September, 1 November and 30 November in the amount of $2,491.07; the credits recorded on 2 August, 30 September and 1 November were reversed a few days later and fees imposed. This material suggests that Mr Kumar did not have $12,000 of his own funds available on 30 November 2010.
Secondly, on 21 July 2010 Integral Energy notified Mr Kumar that the electricity supply at his Liverpool offices would be cut off in two days, because payment of his electricity bill from the previous September had not been made. The evidence does not appear to disclose whether the threatened disconnection in fact occurred.
Thirdly, faced with full knowledge by Mr Malik of the misappropriation and the threat of a complaint to the Law Society, Mr Kumar repaid on 9 December 2010 only $5,500, with four subsequent deposits between 16 and 30 December 2010 totalling $3,500. I deal with what Mr Kumar claimed were additional payments below. But the pattern of deposits - especially, the final payments of $500 in the second half of December - strongly indicates that Mr Kumar did not have $12,000 of his own funds at any time in December 2010. If there were some other explanation for his being unable promptly to repay his client in full, it was not provided by Mr Kumar.
Fourthly, sequestration proceedings had been commenced in 2010 against Mr Kumar. The extract from the National Personal Insolvency Index in evidence referred to "Dindayal, Vijay Kumar", the address given in Campbelltown was one used by Mr Kumar, and Mr Kumar confirmed to the Tribunal that the names were "one and the same" and that the petitioning creditor had bought his debt from National Australia Bank. The Court Reference given in the extract was SYG 2080/2010, which indicates that the proceedings were commenced in 2010. The extract shows that a sequestration order was ultimately made on 20 December 2011. At the time of the hearing in April 2015, Mr Kumar was still a bankrupt.

(b) The crediting of Mr Kumar's loan account

How did the proceeds of the bank cheque for $12,000 come to be credited to Mr Kumar's loan account? Mr Ram's evidence was that he gave no direction to the solicitors with whom he left the cheque for it to be applied to Mr Kumar's account (see above). One possibility is that Mr Ram in fact conveyed, mistakenly, to the solicitors that the cheque was to be credited to Mr Kumar's account. But the Tribunal saw Mr Ram give evidence and accepted it as reliable, and so this possibility cannot be reconciled with what he expressly denied in his affidavit. Another possibility is that Mr Kumar, personally or by an agent, told the solicitors to credit his loan account - but that would constitute deliberate dishonesty. There may be other possibilities. But all of this fell to be explained as part of Mr Kumar's case, and it was not.
As noted at [26] above, evidence was adduced in chief from Mr Ram that: "... [Mr Kumar] told me that I have to also make a cheque direction of 12,000 to Permanent Custodians which 6,000 he had in his drawer and 6,000 would be coming out of legal fees and then he told me that I had to swear to deliver the cheque so at that point I believe that 12,000 - what I understood was 12,000 - cheque of 12,000 to be made to Permanent Custodians on the same cheque direction."
This evidence is difficult to understand. On one view, it reads as if Mr Ram fully understood that the bank cheque which he was to procure in favour of Permanent Custodians to reduce Mr Kumar's indebtedness was to be derived from Mr Malik's proceeds of sale, and that Mr Malik would be reimbursed from the $6,000 contained in Mr Kumar's desk, plus $6,000 in fees which were expected to come in. If that is so, then there can be no doubt that Mr Kumar was instructing Mr Ram to misappropriate his client's funds (for there was no suggestion that Mr Malik authorised his solicitor to appropriate the $12,000). If that is not so, then, taking Mr Kumar's case at its highest, and assuming that he thought at the time that there were two amounts of $12,000 to be paid, how did Mr Ram consider that a cheque direction would assist Mr Kumar in his goal of using $6,000 in cash in his desk to repay his lender? And how could a cheque direction have anything to do with funds that had not yet been received?
Mr Kumar's case appears to have extended to the propositions that Mr Ram was confused, and erroneously included a $12,000 cheque direction in the letter, rather than causing Mr Kumar's personal funds to be used to obtain a bank cheque. Perhaps when Ms Mercieca asked Mr Kumar about the $12,000 cheque direction, his case is that he mistakenly believed that Mr Malik had given those instructions (for that is what she recorded in her file note and transmitted to the purchaser's lender as having been said by him). But that is not all. For Mr Kumar attended the settlement and personally received the bank cheques on behalf of his client, including the $12,000 bank cheque. Mr Kumar's case of mistake must include the proposition that Mr Kumar believed that when Mr Ram delivered that cheque to Permanent Custodians' solicitors later that very afternoon, he was doing so in accordance with Mr Malik's instructions that somehow had been received by Mr Ram.

Further, Mr Kumar's case that he was mistaken depends on a most unlikely coincidence. He happened urgently to wish to deposit $12,000 of his own money to his lender Permanent Custodians, and told Mr Ram that he had $6,000 in his desk and $6,000 coming in. Mr Kumar's case on mistake is that at precisely the same time he believed that his client Mr Malik also wished to repay precisely the same amount of $12,000 to the same non-bank lender.
It was essential for Mr Kumar, whose account was in arrears, to repay at least $9,569. His next repayment was scheduled for 30 November 2010, as it happens, the very day of the twice adjourned settlement. He could have repaid $10,000, or $11,000 or any amount, but chose to repay precisely the same amount which he believed his client was repaying to the same lender on the same day. Moreover, there was no clear evidence that Mr Malik owed any money to Permanent Custodians or that there was a reasonable objective basis for Mr Kumar to hold a belief that Mr Malik was indebted to Permanent Custodians for any amount, let alone for precisely the same sum as Mr Kumar.
This was not a case where Mr Kumar was wholly unaware of the cheques drawn by a client on the settlement of a conveyance, which became mixed up with his own; far from it. Mr Kumar's case that there was a mistake requires a much more improbable scenario - that Mr Kumar was personally involved in attempting to cause two payments in the same amount to the same lender on the same day to be made, one using his own funds, the other using the funds from the settlement of his client's conveyance. To put it mildly, that is a highly improbable coincidence.

(d) Why not repay the money immediately?

If truly there were a mistake when Mr Kumar obtained the benefit of his client's $12,000, then any solicitor in Mr Kumar's position conscious of his obligations would immediately (a) advise his client of the mistake and (b) repay the client in full. The mistaken solicitor would be able to do so, because the solicitor would still have the $12,000 of his own money which had been mistaken with that of the client. Mr Kumar did not do this.
There was a dispute about precisely when Mr Kumar learnt of the mistake, which cannot be resolved in this appeal (Mr Kumar maintained that he told Mrs Malik and then Mr Malik pre-emptively; Mr Malik denied this). However, there can be no dispute that Mr Kumar learnt of the fact that Mr Malik's settlement funds had been credited to his loan account no later than when he was confronted by Ms Hayden on 8 December (see below). Even then, he did not repay the $12,000. Mr Kumar only began to repay the $12,000 on 9 December 2010. He repaid at least some of the remainder in a series of small deposits over the next three weeks, including three deposits of $500 in the second half of December. That is not the conduct of a solicitor who mistakenly receives his client's money.
Ms Hayden was a conveyancer who had been retained by Mr Malik to inquire about the missing $12,000. She was not required to attend for cross-examination. She gave unchallenged evidence that Mr Kumar was aware he had received the benefit of $12,000 of his client's money, without authorisation, and that he was obliged to repay it. Taking the view of the evidence which is most favourable to Mr Kumar, there is still no credible explanation consistent with honesty for his not doing so in full in early December upon learning of the mistake.
To be clear, I have considered the possibility that somehow there was a mistake on 30 November 2010, but that when Mr Kumar came to know that he had received the benefit of his client's $12,000, he did not immediately have access to funds to repay his client. But I cannot reconcile a mistaken belief that he was expecting $12,000 of his own money to pay his overdue loan on 30 November, with that not occurring but him not having $12,000 no later than eight days later when he knew that a "mistake" had occurred. If some unexpected financial misfortune befell Mr Kumar in the first week of December, he made no attempt to adduce evidence of it.

Conclusion - there was no mistake

It may assist to return to the essential features incontrovertibly established in the evidence. Mr Kumar had actual knowledge of (a) the inquiry from the purchaser's solicitor as to the purpose of the cheque, (b) the receipt of the bank cheque at settlement, and (c) giving it to Mr Ram to lodge with Permanent Custodians' solicitors. All three events took place on the same day. And Mr Kumar well knew that a bank cheque was required to clear his arrears, lest once again an eviction take place on the mortgaged property.
The circumstances referred to in the 18 preceding paragraphs lead irresistibly to the conclusion that the mistakes by Mr Ram and/or Mr Kumar on which his case depends did not occur. The three most telling circumstances are (a) Mr Kumar did not - because he could not - repay the money immediately, (b) the extreme unlikelihood of there being two bank cheques in the same amount and for the same non-bank lender, and (c) the inherent implausibility of Mr Ram's evidence of obtaining a bank cheque from cash and funds expected to come in. The conclusion is irresistible because no other non-fanciful inference is available which can be reconciled with what occurred. To the contrary, Mr Kumar acted with the intention of obtaining the benefit of those monies, which he urgently needed in order to clear the arrears on his loan, to prevent an eviction notice being executed, and to prevent his bankruptcy.
Mr Kumar denied all this, on his oath, and was cross-examined on it. But there was and is no plausible explanation inconsistent with deliberate dishonesty. The fact that the explanation was advanced for the first time on the third day of the hearing, years after the event, reinforces my conclusion. I am conscious that the finding is extremely damaging to Mr Kumar; indeed, it is destructive of his professional career and professional status and reputation. Such a finding should only be made in accordance with s 140 of the Evidence Act 1995 (NSW) and the principles in Briginshaw v Briginshaw. But I am more than comfortably satisfied that such a finding should be made.
Those conclusions are not inconsistent with a genuinely held belief that the $12,000 was only a small fraction of the proceeds of settlement, and would be taken only for a short period of time, and was expected to be repaid speedily, perhaps in such a way that Mr Malik might never know. That is the tenor of some of Mr Ram's evidence (particularly, the $6,000 in the drawer and the other $6,000 in legal fees expected to come in) and Ms Hayden's evidence ("Client got more than $107,000.00" and "It was only for a short time. I was going to give it back. I've got it going in."). Lest there be any doubt about it, even a temporary use by Mr Kumar of his client's funds without prior approval amounts to serious and deliberate dishonesty. That is precisely the sort of conduct which is antithetical to the trust and confidence which is required by a solicitor with custody of his or her clients' money.

No failure to apply the Briginshaw standard

For the reasons just given, a separate ground of appeal (ground 1), which is the claim that the Tribunal failed to apply the principles in Briginshaw, probably does not separately arise. But in any event there is nothing in it. The Tribunal expressly made mention of the "serious allegations of breaches by [Mr Kumar] of his professional obligations" at [9] and said that it had made "substantial efforts … to understand [Mr Kumar's] case in answer to these most serious allegations": at [31]. The Tribunal expressly applied a "generous approach" to Mr Kumar's case: at [35]. Indeed, when rejecting one of the Commissioner's complaints, that Mr Kumar had misled the Court, it did so in terms consistent with Briginshaw (it concluded that the Court had been misled, but did "not think that the source of this misinformation can conclusively be traced back to [Mr Kumar]": Liability Decision at [102]).
Not lightly would it be inferred that the Tribunal approached its task in a way which was inconsistent with applying the correct standard of proof. A fair reading of its reasons makes it plain that the Tribunal was conscious of the seriousness of the allegations and the correspondingly heightened need to be satisfied that they were made out.

Issue Four: The compensation order for $3,000

It is convenient to address the fourth issue (which arises out of ground 17 of the amended notice of appeal) at this point, because it is closely related to the first. The Tribunal ordered Mr Kumar to repay Mr Malik $3,000, on the basis of its finding that he had only repaid $9,000. Mr Kumar contends that there was appellable error in the Tribunal not being satisfied that he had repaid Mr Malik in full. He also claims an entitlement as of right to challenge the Tribunal's decision not to grant leave to Mr Kumar to issue further subpoenas.
True it is that Mr Kumar said, on his oath, that he had repaid the $12,000. He does not say that he repaid Mr Malik directly in full. His affidavit stated: "I paid him $12,000.00 plus further $2,000.00 and I refunded all the legal fees. All these transactions would be disclosed in Mr Malik's bank statement and his wife's credit card and her account and other bank statement."
Mr Kumar maintained that evidence in cross-examination. At the Penalty Hearing, he gave the following evidence (what follows has not been corrected): "CURRIE: And how much did you pay, as you recall, into Mrs Malik's account? KUMAR: It's up to - I think its $6,000. CURRIE: And how many separate payments that was? Was it more than one payment, or one payment constituting that $6,000? KUMAR: Um ... more than one payment. That's two separate payments. CURRIE: Two separate payments. KUMAR: But, I may be wrong, it may be one payment, but I paid the rest of the money to her account. CURRIE: And, how to you physically cause the repayment to occur? KUMAR: I went to McMarthy Street, Liverpool. McMarthy Street, Liverpool and physically took that cash with me and deposited it in her account. And then I left. I called her the same day to tell her that I've made the payment. And she acknowledged the payment. CURRIE: And in the way - what bank to you think you paid the money to? KUMAR: I am sorry sir, just not exactly sure which bank was it, but I have a recollection it could be Westbank, Commonwealth, ANZ - it wasn't - I remember it was a credit card payment. She has given the credit card number, because her credit ... I am exactly not sure which bank was it, but it was on McMarthy Street. McMarthy Street, Liverpool."
Mr Kumar had caused subpoenas to produce documents in the names of Mr Malik and his wife to be issued to the Commonwealth Bank, St George, Westpac and ANZ, none of which disclosed the additional payments he claimed. (Strictly, they were summonses to produce documents, but I will refer to them as subpoenas, consistently with the language used by the Tribunal.) In all, the subpoenas returned documents relating to some five accounts, as well as a Westpac "Holden card". The accounts included an ANZ "Low Rate Mastercard" account, which contained cash deposits of $2,000, $500, $500 and $500 between 16 and 30 December 2010 to which reference has already been made.
The Tribunal addressed this at [139]-[145] of the Penalty Decision: "At the principal proceedings the Tribunal found that amounts totalling $9,000 had been paid to the client on whose behalf the claims made. In the early stages of the hearing as to penalty and other orders Mr Pritchard SC on behalf of the Respondent outlined the Respondent's efforts to subpoena relevant banking documents which the Respondent believed would establish that the balance of $3,000 had also been paid to the relevant client. It seems accepted that there were spelling errors in the subpoenas as originally prepared, filed and served. These involved mis-spelling the names of the holder of the relevant bank account. Subsequently after some delay, the Respondent sought leave for the issue of amended subpoenas to the same party and additional subpoenas to other parties. This leave was refused. The Tribunal notes that the Respondent had had opportunities over approximately 2 years to procure evidence of the payment of this balance amount. Having heard counsel for both parties on this point at the commencement of the hearing as to penalty and other orders, the Tribunal ordered that it would permit at this hearing further evidence to be tendered by the Respondent as to the repayment of the total amount of $12,000 subject to the limitation that no further subpoenas would be issued. The Tribunal also noted that to the extent that Mr Beaumont SC for the Commissioner would be prejudiced by short notice that this evidence would be adduced, the Tribunal would assign appropriate weight to the new evidence. Ultimately, although the Respondent continued to assert that the full $12,000 had been paid no evidence was produced to the Tribunal to corroborate this assertion. The Tribunal does not accept the uncorroborated assertions of the Respondent that he has paid the full $12,000. It follows that [in] respect of the compensation claim there will be an order that the Respondent pay to the claimant the outstanding balance being the sum of $3,000."
The first error asserted is that the Tribunal should have accepted the evidence of Mr Kumar, albeit uncorroborated by any documents, especially since Mr Malik ceased to pursue his compensation claim in the proceedings. I cannot agree. As for the former, the Tribunal considered Mr Kumar to have been deliberately dishonest. For the reasons already given, no error is shown in that conclusion. In those circumstances, it was not erroneous for the Tribunal to reject Mr Kumar's uncorroborated testimonial evidence. The logical consequence of its finding of deliberate dishonesty was that Mr Kumar was either deliberately lying to the Tribunal, or else had a deluded (albeit genuine) recollection of the events of November and December 2010. As for the latter, it was common ground before the Tribunal that Mr Malik was pursuing a claim for compensation against the Fidelity Fund. Thus, in abandoning his claim against Mr Kumar, Mr Malik did not accept that the money was not owing.
Mr Kumar tendered a file note made by his instructing solicitor, which referred to the Registrar refusing leave to issue a summons to produce in April 2013, and an application for that decision to be reviewed, which was declined. However, the file note concluded: "In the event, Mr Malik did not pursue his claim for compensation, so the principal reason for seeking leave to issue a summons no longer existed, and [the solicitor] did not press the matter further."
Mr Kumar claims to enjoy an appeal as of right from the refusal of leave to issue a subpoena. His written submissions assert: "Given the discrete nature of the issue, the limited resources it would consume, and the potential prejudice to Mr Kumar, the Tribunal erred in not granting leave. This was an interlocutory decision which affected the final order of the Tribunal (and therefore leave to appeal from is not required): Gerlach v Clifton Bricks (2002) 209 CLR 478 at [6] per the plurality; Guss v Johnstone [2000] FCA 1455 at [16] (FC)."
Mr Kumar's submission is not sound. The joint judgment of the High Court in Gerlach, at the paragraph on which Mr Kumar relies, expressly added a qualification, namely, that a new trial is not ordered unless there has been a miscarriage of justice. That same qualification was applied in Guss v Johnstone. The current form of that rule is found in r 51.53 of the Uniform Civil Procedure Rules 2005 (NSW). It is unnecessary to pause to consider what other qualifications exist, because I do not consider there to have been any miscarriage of justice. In so saying, I should not be taken to be endorsing the proposition that a challenge may be made as of right on an appeal following a trial to, say, a decision as to the scope of discovery, or to issue a subpoena, or some other interlocutory ruling. I pass over the other qualifications because it is sufficient to deal with the gravamen of the complaint, that there was some measure of unfairness in the Tribunal's process. I conclude that there was not.
Mr Kumar accepts that he received $12,000 of his client's money, in addition to fees. Over the following month, he repaid $9,000, as may be seen on Mr Malik's bank statements. He claims he repaid the remaining $3,000, plus fees of $1,430 plus a further $2,000. He did not tender any of his personal or business bank account records; if he had done so, that may have shed light on (say) the deposit of the $1,430 fees he received by way of bank cheque, and any withdrawals used to repay his clients. Instead, he issued a series of subpoenas to attempt to find a deposit or deposits in Mr and Mrs Malik's accounts which he could claim were the amounts he repaid. The result was documents disclosing no fewer than five savings and credit card accounts (and the "Holden Card" account) in the names of Mr or Mrs Malik. Then, three months prior to the hearing, his solicitor determined not to press the point, because Mr Malik was no longer pursuing a claim against him. No further step having been taken in advance of the hearing as a result of that deliberate decision, there was no miscarriage of justice in the Tribunal's refusal to permit further subpoenas to be issued which would only be returnable after the conclusion of the Penalty Hearing.

Issue 3: Obstructing or misleading an investigator contrary to s 674

Grounds 11 - 14 of the amended notice of appeal challenge the Tribunal's finding at [82] of its Liability Decision: "The Tribunal is satisfied on the evidence and particularly the unequivocal and corroborated evidence of Mr Collins and the admissions made by the Respondent that between about 23 March 2010 and 3 March 2011 the Respondent engaged in a course of conduct which hindered and delayed an investigator in the course of his seeking to conduct an audit of the Respondent's practice and that he did this without reasonable excuse."
Section 674 of the Legal Profession Act is in the following terms: "674 Obstruction or misleading of investigator (1) A person must not, without reasonable excuse, obstruct or mislead an investigator exercising a power under this Act. Maximum penalty: 100 penalty units. (2) In this section: obstruct includes hinder, delay, resist and attempt to obstruct."
Mr Kumar challenges the finding on essentially two distinct bases. First, on the facts, he maintains that the Tribunal erred in rejecting his submission that he had a reasonable excuse. He relies on claims that he was suffering debilitating back injuries throughout the period, that his mother was ill, that he was in mourning for the loss of his father and brother-in-law, and that a close family member had died. He says that he was short staffed, and that when investigators attended his offices (by arrangement) and found them locked with "a lot of post" under the door, that illustrated his lack of staff, not any hindering or delaying of the investigation. Mr Kumar also says that he gave, on 31 January 2011, an undertaking to ensure that the audit would be conducted between 14 and 18 March 2011. Finally, he relies on the fact that he did eventually give the investigators some of the material requested from him.
Secondly, as a matter of law, he maintains that this ground of the Commissioner's application to the Tribunal was "duplicitous", although he acknowledges that duplicity does not apply directly to disciplinary proceedings. He says that s 674 creates two offences: obstructing an investigator, and misleading an investigator, and that he was charged with both, in a manner which was procedurally unfair. He says that the ambiguity "came to a head" in the Penalty Decision, in that the finding of obstructing and hindering the investigation was summarised as one of misleading the investigators. As quoted in Mr Kumar's written submissions in chief (paragraph 74): "[I]n relation to the Respondent's course of dealing with the Commissioner's inspectors, even on a construction of that long chain of events which is most favourable to the Respondent, it is clear that he made misleading statements and tendered misleading excuses to them in relation to the postponement of the inspection and audit of [Mr Kumar's] records."

(a) Did the Tribunal err in failing to find there had been a reasonable excuse?

The underlying pattern of Mr Kumar's conduct was very substantially admitted. The Commissioner relied upon no fewer than 10 requests by Mr Kumar for the postponement of the audit of his practice. There can be no doubt that it was open to the Tribunal to find that during this 11 month period when investigators were seeking to conduct an audit of Mr Kumar's practice, they were sufficiently hindered and delayed by Mr Kumar so as to amount to an obstruction within the meaning of s 674 (noting that "obstruct" includes "hinder" and "delay"). The question on appeal, then, is whether appellable error is made out in respect of the Tribunal's conclusion that Mr Kumar lacked a reasonable excuse.
"Reasonable excuse" was addressed by the Tribunal at [72]-[74] of the Liability Decision: "'Reasonable excuse'. Dealing firstly with the 'reasonable excuse' contention, the Tribunal acknowledges that the Respondent may have had some medical problems at particular stages during the 11 month period between the initial correspondence and the attempted audit. However the medical evidence tendered by the Respondent was very general and not specific as to diagnosis or prognosis, in particular as to the extent to which his incapacity would prevent the Respondent from carrying on his professional business. In any case the Respondent's medical problems appear to have been debilitating, if at all, towards the end of the period only. There was very little explanation given as to the family tragedy alleged by the Respondent. Such an event deserves a sympathetic response and there is no reason for the Tribunal to think that that was not forthcoming. However, again, a reasonable allowance for delay from that cause only accounts for a short portion of the eleven month period. The Tribunal cannot ascertain any reasonable excuse for many of the incidents under consideration during the 11 month period up to commencement of the audit whereby the best efforts of the investigation team from the Commission to conduct an audit of the Respondent's practice were thwarted. By way of non-exhaustive example, the Tribunal is unable to ascertain from the Respondent's case as presented or from any other source, any reasonable excuse for the following conduct: (a) the length of the Respondent's requested postponement on 7 June 2010 until September 2010 due to pressure of work (Particular 1.4); (b) the Respondent's delay in responding to the request from the Commission for an explanation of the request referred to in (a) above (Particulars 1.5, 1.6, 1.7 and 1.8); (c) the Respondent's delay in responding to requests for further information (Particulars 1.6, 1.7, 1.9, 1.10, 1.18); (d) the "last minute" nature of many of the Respondent's requests for an extension of time or other postponement, even after making a generous allowance for events for which longer notice could not reasonably be given, such as illness or family tragedy (Particulars 1.4, 1.7,1.12, 1.15, 1.25, 1.28, 1.30 and 1.33); (e) the circumstances and the Respondent's conduct as described in paragraphs 57 and 58 and 59 second sentence to 60 above (Particulars 1.21 to 1.33) covering the period 6 December 2010 to early February 2011; or (f) the Respondent's obfuscation and attempts to delay or hinder the process in his telephone conversations with the Commission's officers on the day of the Bankstown Court attendances, 1 February 2011. (Particular 1.36). In this regard the Tribunal accepts the evidence of the Commission's officers Mr Ray Collins and Ms Esther Bedggood, who participated in the relevant conversations on speaker phone. Mr Collins' affidavit as a whole, and Ms Bedggood's file note, which is annexed at page 4 of Mr Collins' affidavit, are accepted as truthful and reliable accounts of what happened and what was said. Ms Bedggood's file note reports that during the conversation, whenever Mr Collins asked the Respondent which Court he was in or what he was doing at the time, the Respondent would say he could not hear or would attempt to cut the conversation short or would obfuscate by praising Mr Collins' reputation as a solicitor. For these reasons the Tribunal is satisfied that the Respondent did not have a reasonable excuse for most of the incidents of conduct referred to in the Particulars for Ground 1."
It is not sufficient for Mr Kumar merely to repeat his submissions at first instance. In order to succeed on appeal, he needs to establish appellable error. The finding of an absence of a reasonable excuse applicable for a period extending over 11 months was one which (as may be seen from the previous paragraph) considered the various submissions advanced by Mr Kumar and reached an evaluative conclusion. It does not disclose error.
Contrary to ground 13 of Mr Kumar's appeal, there is no reason why it was necessary to consider every individual delay separately. It was open to the Tribunal to take a broader approach, having regard to the total length of delay (during which time Mr Kumar continued to practise) and the fact that he was able to make time to act for clients although a suite of reasons was claimed to prevent his making time for the Commissioner's investigators. It is not suggested that (save for the submissions based on duplicity addressed below) the Tribunal made any error of law in reaching that conclusion.

(b) Was the charge duplicitous?

Mr Kumar advances a series of submissions cumulatively within this topic. First, he says that s 674 creates separate offences of obstructing an investigator and misleading an investigator. Secondly, he says that the particularised conduct relates to "a number of separate and discrete events that were improperly aggregated": (a) the repeated postponements of the audit, (b) the failure to provide requested financial information or responses, (c) misleading the Commissioner as to his whereabouts on 10 December 2010, and (d) misleading the Commissioner as to his whereabouts on 1 February 2011. Finally, he says that there was real unfairness to him in the Penalty Hearing, because findings of obstruction were regarded as equivalent to findings of misleading conduct which in turn supported a finding that Mr Kumar had engaged in a repeated and continuous course of deliberate dishonesty.
I cannot accept any of Mr Kumar's submissions based on duplicity for the reasons that follow.
First, I consider that s 674 creates a single offence, not two offences. Neither party pointed to any authority on point, and so the matter is to be approached as a matter of principle.
The point of an investigation is to facilitate a purpose. Two purposes are presently relevant. The first is what the Act describes as "complaint investigations" (see s 657(1)(c)), thereby fulfilling the important public purpose of ensuring that complaints of misconduct by practitioners can be investigated and, in an appropriate case, be the subject of disciplinary proceedings. Thus each complaint "must be investigated": s 525(1), except in circumstances where s 525(2) applies. Following an investigation, the Commissioner "must" either commence proceedings against the practitioner, or dismiss the complaint, or take summary action under s 540: see s 537(1). It is plain that the purpose of a complaint investigation is to provide material on the basis of which the relevant body (here, the Commissioner) can perform its obligation under s 537 to commence proceedings, or dismiss the complaint, or summarily discipline the practitioner.
The second is a "compliance audit", which may take place whether or not a complaint has been made, and which will result in a report which must be provided to the Law Society Council or the Commissioner, and may be taken into account in connection with disciplinary proceedings: s 670(5) and (6).
Once it is seen that an investigation serves a particular purpose, it is readily concluded that anything which misleads an investigator is also apt to obstruct the investigator, in the presently relevant sense of hindering, delaying, resisting or attempting to obstruct the investigator from fulfilling that purpose. Obstruction is plainly not confined to physical obstruction but includes, in this context, steps taken to misdirect or slow down the investigation.
The converse proposition is not true: not everything that obstructs an investigator will inevitably mislead him or her. But the conclusion that to mislead an investigator is necessarily to obstruct the investigator makes it plain that this is a case where two words are used disjunctively to denote a single offence.
As much is confirmed when regard is had to s 674(2). It is plain that there is an offence if a person hinders, delays, resists or attempts to obstruct an investigator exercising a power under the Act, but it does not follow that each of the verbs constituting the inclusive definition of "obstruct" gives rise to a separate offence.
The question is one of statutory construction. If two offences were created, then every offence of misleading would also amount to obstructing in circumstances where the misleading of the investigator amounted to a hindering or delaying of the investigator. There is no rational basis for separating what on its face is a single provision creating a single offence into two offences. The position is as described by Jordan CJ in Ex parte Polley; Re McLennan (1947) 47 SR (NSW) 391 at 392: "But the mere use of the word 'or' does not show that it is intended to create two offences. It may sufficiently appear that it is intended to create only one offence of a particular type and to supply one or more instances. Thus, where a statute prohibited a person from having a certain class of things in his possession or control, the essence of the offence so created was regarded by one learned judge as having the things in one's control, possession being instanced as a form of control, and by another learned judge as having the things, possession and control being instanced as modes of having: Hedberg v Woodhall (1913) 15 CLR 531." Just as possession was a form of control in Ex parte Polley, so too misleading is a form of obstruction for the purposes of s 647.
Secondly, I do not accept Mr Kumar's submission that he should have been charged with four contraventions of s 674. Even if the rules associated with duplicitous criminal prosecutions applied, the starting point must be the statute: see Rockdale Beef Pty Ltd v Industrial Relations Commission of New South Wales [2007] NSWCA 128; 165 IR 7 at [97] and Environment Protection Authority v Truegain Pty Ltd [2013] NSWCCA 204; 85 NSWLR 125 at [47]-[52]. There was a single investigation. That investigation was, by a variety of means all of which were particularised by the Commissioner and in very large measure admitted, obstructed. It was appropriate that the Commissioner's application to the Tribunal contain a single complaint.
It is revealing that although at first instance, Mr Kumar did complain that the ground was duplicitous because it pleaded both alternatives (see transcript, 1 August 2012, p 54), no complaint was made that there should have been four separate contraventions alleged. That is an indication that it was not perceived to give rise to procedural unfairness.
Mr Kumar ultimately accepted that "the question is whether Mr Kumar has been denied procedural fairness by reason of a charge being duplicitous". In circumstances where the particulars were substantially admitted, and the defence turned upon a lawful excuse, I fail to see anything procedurally unfair about the proceedings.
The particular procedural unfairness of which Mr Kumar complained was that in the Penalty Hearing, there had been a "slide" from misleading to obstructing. That turns upon a selective reading of the Tribunal's reasons. As noted above, Mr Kumar relies on the first sentence of [72] of the Penalty Decision, but the whole paragraph is as follows (my emphasis): "Fifthly, in relation to the Respondent's course of dealing with the Commissioner's inspectors, even on a construction of that long chain of events which is most favourable to the Respondent, it is clear that he made misleading statements and tendered misleading excuses to them in relation to the postponement of the inspection and audit of the Respondent's records. The Respondent's statements were held by the Tribunal to be deliberately obstructive[.] (See paragraphs 52-64 and 71-73 of the Reasons for Judgment in the principal proceedings.)"
A fair reading of the Tribunal's reasons as a whole does not disclose any inappropriate mischaracterising of its findings from the Liability Decision.

Issue Two: Misleading the Commissioner as to Mr Kumar's whereabouts on 1 February 2011

This issue arises out of grounds 15, 15A and 16 of the amended notice of appeal. The Commissioner's initiating application alleged that Mr Kumar had "deliberately misled the Commissioner about his whereabouts on 1 February 2011". Particulars 1.29, 1.30 and 1.31 to the Commissioner's originating process in the Tribunal were all admitted. They were: "On 18 January 2011, the OLSC [Office of the Legal Services Commissioner] advised the solicitor that his request to postpone the audit was denied and that representatives of the OLSC would be in attendance at his office in Campbelltown on 1 and 2 February 2011 and that no further postponements would be granted. On 27 January 2011 the solicitor advised that he was unable to attend the audit as he was in Liverpool Court on 1 February 2011 on the matter of Hejaaz Karem. The matter of Hejaaz Karem was not listed for Liverpool Local Court on 1 February. On 27 January 2011, the solicitor stated that he was representing Mr Karem in Bankstown Court not Liverpool."
Mr Kumar acted for Mr Karem. He gave evidence that on 31 January 2011 Mr Karem spoke with Mr Kumar, who advised him that he was unwell and might be unable to appear for him the following day. Mr Karem sought and obtained an adjournment on 1 February 2011 until 24 February 2011. The Court coversheet records the adjournment and notes: "P&D seek adj - Granted - lawyer in hosp - P didn't know in for hg."
The Commissioner tendered a memorandum dated 1 February 2011 by Ms Bedggood, one of the two investigating officers who attempted to carry out the audit on that day. Both attended Mr Kumar's Campbelltown office at 9am and again at 9.40am. On both occasions all doors were locked and no one responded to their knocking on the door. They arrived at Bankstown Court at around 10.40am, and found that Mr Karem's matter had already been adjourned. The file note then records: "Telephone call to Vijay Kumar At around 10.50am, Ray [Collins] telephoned Mr Kumar and spoke to him on the speakerphone in his car. Ray asked Mr Kumar whether he was available for us to attend his office and conduct the audit. Mr Kumar said that he was very busy and he would not be finished until late. He then tried to cut the telephone call short and Mr Kumar said that he would speak to Ray later that day. Whenever Ray asked Mr Kumar what he was doing at the time or which court he was in, Mr Kumar stated that he couldn't hear what Ray was saying or he would attempt to cut the telephone call short. As soon as Ray asked another question, Mr Kumar was able to hear and would respond. Ray told Mr Kumar that the audit could not be put off and that he wanted to do it today. Ray asked Mr Kumar what time he would be finished in court. Mr Kumar stated that it would be very late, around 4 or 5pm. Mr Kumar then launched into a dialogue about what a well respected solicitor Ray was and how the Commissioner was lucky to have him. Mr Kumar again stated that there was no way that the audit could be conducted today. Ray then asked Mr Kumar which court he was in and asked whether he was at Liverpool Court. Ray had to ask the question several times. Mr Kumar then said that he was not at Liverpool Court, 'I am in Bankstown Court'."
Mr Kumar then said that he would telephone Mr Collins that afternoon. Mr Kumar sent text messages to Mr Collins including "I w cal u at 5pm" and "Am sorry I cant call u at 5pm battery is dead".
Mr Karem affirmed an affidavit which was read in Mr Kumar's case. It concluded: "I went to court on February 1, 2010 [sic]. I did not see Mr Kumar in the Court precinct at the time. I simply sought adjournment of my matter. The Court adjourned the matter to February 24, 2010 [sic]."
When cross-examined in the Liability Hearing, Mr Karem gave evidence that he had a face-to-face conversation with Mr Kumar on 1 February 2011, inside the courthouse but outside the courtroom. He agreed with the (leading) question in re-examination that he had "reflected on what you told the Magistrate and you realised that it was inaccurate". He was cross-examined further, and had no explanation for why his affidavit made no mention of the conversation on 1 February 2011, which he agreed he regarded as "an important fact".
It will be seen that Mr Karem's affidavit explains what was recorded on the Bankstown Court file as part of the reason for the adjournment of Mr Karem's matter, while his oral evidence attempted to go further so as to address the claim that Mr Kumar was not in fact in Bankstown Court on 1 February 2011, even though that is what he told the investigating officers. The Tribunal was not reasonably satisfied on the balance of probabilities that the Court had been misled by Mr Kumar as to his whereabouts on that day, and dismissed ground 2 of the application: at [101]-[104] of the Liability Decision. Its basis for doing so was that it did "not think that the source of this misinformation can conclusively be traced back to [Mr Kumar]". The Commissioner did not seek to challenge that reasoning by way of cross-appeal.
The Tribunal found the Commissioner had been misled because it accepted the evidence of Ms Bedggood reproduced above that Mr Kumar would not be finished in court until "very late, around 4 or 5pm". The Tribunal found at [111] of the Liability Decision: "The Tribunal accepts Ms Bedggood's evidence that the Respondent told the Commissioner's officers that he would be in Court until 'very late, 4 or 5pm'. It is clear from the evidence that he was not committed to Court for such a period that day and that he could conceivably have made arrangements to allow the officers to commence their audit. It follows that the Respondent misled Mr Collins and Ms Bedggood as to his whereabouts on 1 February 2011. The Tribunal is satisfied that he did this deliberately, in order once again to avoid the commencement of the audit of his practice."
Mr Kumar submitted that that finding impermissibly departed from the way the Commissioner's case had been particularised. He submitted that "[t]he charge related to Mr Kumar's present whereabouts and not to expected or anticipated future whereabouts". That is to say, Mr Kumar submitted that the charge was confined to Mr Kumar's statement that he was in Bankstown Court, something which was false, rather than that the audit could not proceed on that day.
That is an unduly narrow reading of the Commissioner's case. Ground 3 was that Mr Kumar had "deliberately misled the Commissioner about his whereabouts on 1 February 2011". Particular 1.30 was that Mr Kumar "advised that he was unable to attend the audit as he was in Liverpool Court on 1 February 2011 in the matter of Hejaaz Karem" (emphasis added). The finding by the Tribunal is within the Commissioner's case as particularised. Contrary to Mr Kumar's submission, the charge related to Mr Kumar's whereabouts on 1 February 2011, not merely his whereabouts at 10.50am on that day, because as particularised, the representation made by him was that he was unable to attend the audit on that day.
Two matters may be noted for completeness. The first is that it is not necessary to address the Commissioner's notice of contention that the Tribunal should have found that Mr Kumar was not "in Bankstown Court". In light of Mr Karem's oral evidence, which went well beyond his affidavit, it is not appropriate to do so. The second is that even if Mr Kumar had been wholly successful on these grounds of appeal, it would not, as will be seen below, have had any impact upon the penalty.

Issue 5: Penalty

Grounds 18 - 22 were advanced against the possibility that all other grounds might fail (for if any of the findings of professional misconduct had been set aside, it would be necessary to re-exercise the discretion as to the appropriate sanction). Mr Kumar maintains, boldly, that the appropriate orders would have been a reprimand and some restrictions on his practising certificate.
The Tribunal in its Penalty Decision proceeded on the basis that its findings of deliberate dishonesty warranted removal from the Roll unless there were some clearly applicable ameliorating factor: at [90]. Mr Kumar contended that the Tribunal erred in concluding that its findings amounted to "repeated and sustained acts of deliberate dishonesty". Mr Kumar also says that insufficient regard was given to his character references, that he was being punished twice for the findings of professional misconduct on both grounds 1 (obstructing or misleading an investigator) and 3 (deliberately misleading the Commissioner as to his whereabouts on 1 February 2011), that it failed to place sufficient weight on other ameliorating features, including the medical and psychological evidence, that Mr Kumar's practising certificate had been suspended since March 2011 and that insufficient weight was given to Mr Kumar's remorse and contrition. I cannot agree.
The Tribunal's reasons for that finding at [65]-[76] are lengthy, but in light of one of the criticisms made by Mr Kumar, need to be reproduced in full: "The Tribunal is satisfied that, even on a construction of events favourable to the Respondent, the following acts of deliberate dishonesty by him were established in the principal proceedings and must be taken into account in considering penalty. Firstly it is clear that the Respondent was deliberately dishonest in his direct dealings with his client Mr Malik. Quite apart from the actual acts involved in perpetrating the misappropriation (such as the preparation of the direction to pay on settlement, at the Respondent's personal direction) it is clear that the Respondent was deliberately dishonest in his accounting to Mr Malik. Secondly the Respondent must have dishonestly held out to his employees who were involved in the preparation of the critical direction to pay, which was produced on the settlement of Mr Malik's sale, that it was proper to prepare the direction to pay on the basis that $12,000 from the proceeds should be paid to Permanent Custodians. There can be no doubt that these dishonest representations were deliberate. Thirdly, the Respondent was deliberately dishonest in representations made to Ms Mercieca, a secretary in the office of the purchaser in that transaction. Ms Mercieca deposed that shortly before settlement she telephoned the Respondent and asked what the $12,000 was for and was told by the respondent: "My client authorised me to draw it." Ms Mercieca's evidence was accepted by the Tribunal in the principal proceedings (see paragraphs 23-26 of the Reasons for Judgment). Fourthly, the Respondent was deliberately dishonest in what he said to Ms Hayden, the licensed conveyancer who was engaged shortly after settlement of the transaction to represent Mr Malik. When asked by Ms Hayden why the $12,000 had not been accounted to her client Mr Malik the Respondent said: "My secretary made a mistake and made a cheque out to someone else by mistake in the amount of $12,000." (Reasons for Judgment, paragraph 28). When Ms Hayden very sensibly challenged the Respondent on the veracity of that statement by replying "C'mon. You and I know that mistakes like that don't happen", the Respondent's response was again deliberately dishonest. He responded to the effect that he did not have the money and said "It was a mistake, she paid it to Permanent Custodians Limited". (Reasons for Judgment, paragraph 29) It was only when he was again challenged by Ms Hayden as to where Permanent Custodians fitted into the transaction that the Respondent confessed that Permanent Custodians was his personal lender. But, critically, he added a further lie to that explanation by saying "it was put in my bank by mistake." (Reasons for Judgment, paragraph 29) In the principal proceedings the Tribunal accepted Ms Hayden as an impressive and persuasive witness whose account was consistent and credible. (Reasons for Judgment paragraphs 27-30) Fifthly, in relation to the Respondent's course of dealing with the Commissioner's inspectors, even on a construction of that long chain of events which is most favourable to the Respondent, it is clear that he made misleading statements and tendered misleading excuses to them in relation to the postponement of the inspection and audit of the Respondent's records. The Respondent's statements were held by the Tribunal to be deliberately obstructive. (See paragraphs 52-64 and 71-73 of the Reasons for Judgment in the principal proceedings) Sixthly, the Respondent's conversation with Mr Collins and Ms Bedggood from the Commissioner's staff by telephone outside Bankstown Court on 1 February 2011 was accepted by the Tribunal in the principal proceedings as including an untrue statement. That untrue statement was in response to the question from Mr Collins to the Respondent as to what time he would be finished in court on that day. The note taken by Ms Bedggood, which was accepted by the Tribunal in the principal proceedings as accurate and reliable, indicated that the Respondent stated 'that it would be very late around 4 or 5 PM.' In the principal proceedings the Tribunal found that it was clear from the evidence that the Respondent was not committed to court for such a period that day. (Reasons for Judgment paragraphs 89-90, 106-107 and 110). Finally, it must be noted that the Respondent appears to have maintained, at least until quite recently, the deception that the misappropriation of the $12,000 paid to Permanent Custodians in the Malik transaction was in some way due to an error by one or more of his staff members. In this regard we refer to the written report of Ms Elaine Ford, Nurse Practitioner, Counsellor and Psychotherapist dated 24 July 2013 which is annexed to her affidavit of 26 July 2013. The report includes the following includes the following passage: 'Now that (the Respondent is better equipped to manage his anxiety, he is able to develop a stronger argument that he believes will reassure the tribunal members that he had no intent in misleading or misappropriating funds, had attempted to remedy the misunderstanding immediately, terminated the employment of the staff member that made the error, and is taking steps to prevent this from occurring again.' [Emphasis added by Tribunal] It is most significant that this passage occurs in a description of Ms Ford's conversation with the Respondent on 23 July 2013. That is over 5 months after the publication of the Tribunal's Reasons for Judgment in the principal proceedings and only 6 days before the hearing as to penalty and other orders. The clear implication from the quoted passage, and indeed the only possible interpretation of it, is that the Respondent continued until (at the earliest) a few days prior to the hearing as to penalty and other orders, to hold out to other people that the established misappropriation of client money was not his fault but was caused by a mistake by a staff member."
The Tribunal's findings in relation to the misappropriation of $12,000 of Mr Malik's money are findings of deliberate dishonesty. Even up to the hearing of this appeal, Mr Kumar has refused to accept a finding of deliberate dishonesty (although he does acknowledge that his practice was poorly organised). The untruths told to Mr Malik, Mr Kumar's employees, Ms Mercieca and Ms Hayden in 2010 and the maintenance of a deception subsequently fully warrant the Tribunal's conclusion of repeated and sustained acts of dishonesty.
Mr Kumar criticises the Tribunal's reliance in the list reproduced above on the fifth element, which was misleading and deliberately obstructing investigators. That was serious misconduct, but is qualitatively different from the deliberate dishonesty in every other paragraph. However, its inclusion in the list cannot be said to have materially influenced the Tribunal's rejection of Mr Kumar's submission that the conduct should be seen as an isolated instance or relatively minor in scope.
Next, it may be doubted that a submission that insufficient weight has been given to favourable considerations is, by itself, a valid ground of appeal. Something more must be shown. Giving weight to considerations of this kind involves an evaluative judgment similar to the exercise of a discretion. Indeed it is an inherent part of the exercise of a discretionary power. As Latham CJ said in Lovell v Lovell (1950) 81 CLR 513 at 519, an appellate tribunal will not set aside a finding on this ground alone "unless the failure to give adequate weight to relevant considerations really amounts to a failure to exercise the discretion actually entrusted to the court". What has been said above about the way in which Mr Kumar, until and including the hearing of the appeal, has maintained the position that his actions concerning Mr Malik's $12,000 are not dishonest is a complete answer to the submission that his acts were isolated. The same consideration is also an answer to the claimed contrition and remorse. What is more, the Tribunal said at [108]-[109] that: "the Tribunal did not hear at any stage directly from the Respondent himself any statement which indicated his understanding or insight into the seriousness of what he had done, or any statement whatsoever indicating clear remorse or contrition for the professional misconduct or for its consequences on others (as opposed to the consequences for the Respondent himself). The Respondent had ample opportunity to do this. He was called to give oral evidence at the hearing as to penalty and other orders. He was examined and cross-examined. He said nothing to indicate insight or contrition as to the appropriate matters. He said a great deal about his current position and how he had suffered as a result of the suspension of his practising certificate, the commencement and hearing of these proceedings and the possible consequences to him of the orders the Tribunal. But he did not, except through his Counsel at a relatively late stage of the proceedings, go any way towards demonstrating appropriate insight or expressing appropriate contrition."
Those findings are not challenged on appeal, nor could they be.
Moreover, the severity of the orders made wholly accords with authority. Mr Kumar's circumstances were not dissimilar from those in Dupal v The Law Society of New South Wales [1990] NSWCA 56. In that case, Kirby P said: "In an appeal such as the present, the Court disposes of the case before it by reference to criteria of general application. These should be clear and simple. They should be such as to leave no doubt in the mind of a practitioner in financial difficulties, exposed to the temptation of using without clear authority the funds of another, the consequences that will flow for the right to practise when such misuse of funds is discovered." Handley JA, with whom Priestley JA agreed, said: "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 s 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 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."
Finally, there is nothing in the claimed double punishment for grounds 1 and 3. A man or woman who takes his or her client's funds for his or her own benefit, and who demonstrates no remorse or understanding of the gravity of his or her misconduct, is prima facie not fit to remain on the Roll. The findings in relation to Mr Malik's $12,000 by themselves warranted the orders made. The Tribunal correctly regarded them at [93] not as "in the nature of technical or procedural rules or practices" but as "the very basic obligations of honesty and trustworthiness discussed in the major cases" and "fundamental principles of honesty and fair dealing".

Orders

No appellable error has been made out on any of Mr Kumar's grounds of appeal. The appeal should be dismissed. No submissions were made to the effect that Mr Kumar's bankruptcy should alter the ordinary position as to costs, which should follow the event.
SACKVILLE AJA: I agree with Leeming JA.

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: 17 June 2015

Legal Profession Act 2004(NSW)

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