Law Society of New South Wales v Delpopolo

The Hearing 6In opening its case, the Law Society acknowledged that a bare failure to pay superannuation entitlements may not, of itself, constitute professional misconduct, but if circumstances surrounding the failure to pay are sufficient, then professional misconduct may arise and in the instant case, the Law Society asserted, such circumstances were present. 7In support of the Applicant's case, Ms Groenewegen, solicitor for the Law Society, read the Affidavits of Anne-Marie Ford, sworn 4 April 2013 and Affidavit of Anne-Maree Kershler sworn on 15 August 2013. No objections were taken to the content of these Affidavits, nor were the deponents required for cross examination. 8The legal practitioner's evidence consisted of two Affidavits sworn by her, firstly on 25 September 2013 and, secondly, on 2 December, 2013. The latter document showed that as at its date of swearing: (1)$52,500.00 had been received by Worrells being recovery from a trade debtor of Axis Legal. (2)On 2 August 2013, Worrells had calculated the amount required to pay the Superannuation Guarantee Charge and Worrells fees for administrating the Deed of Arrangement at $116,682.24. (3)Worrells' fees had increased since that time by a further $4,328.59. (4)Worrells had paid a partial dividend of $86,920.95 to the ATO in respect of its Proof of Debt for the Superannuation Guarantee Charge . (5)A further $68,510.83 was required to be contributed to the Deed fund in order to pay the entirety of the amount due under the Superannuation Guarantee Charge to the ATO in respect of superannuation entitlements of employees of Axis Legal. (6)The administrator had agreed to accept instalments of approximately $5,000 per month to finalise 100% payment of the Superannuation Guarantee Charge and the Affidavit contained an an undertaking by the legal practitioner to the Tribunal to pay the balance in accordance with Worrells' requirements. (7)The legal practitioner had enrolled in a practice management course provided by the College of Law to commence on 6 December 2013 for a period of three days and the legal practitioner stated that she intended to complete that course. (8)The legal practitioner continued her involvement with coaching and business mentoring by Mr Ron Geekie who is the managing director of Amber Tiles and an executive coach with The Executive Connection and that she had consulted with her former master solicitor, Mr Rudolph Bergagnin. 9At the time of the Tribunal proceedings, the legal practitioner was aged 42 and had started her career in the legal profession as a legal secretary/paralegal in about 1991. 10The legal practitioner worked in a number of firms, including Dunhill Madden Butler, Corrs Chambers Westgarth and Baker McKenzie as a paralegal whilst studying law and completed the Legal Practitioners Administration Board Examinations in about 2002. 11The legal practitioner undertook the College of Law course in 2002 and was admitted to practice that same year. She thereafter worked in the law firm Cowley Hearne Lawyers as an employed legal practitioner specialising in intellectual property and information technology. 12She commenced practice on her own account using a company structure Axis Legal Pty Limited, which was incorporated on 19 January 2005. Axis Legal traded initially from Double Bay and then moved to Surry Hills in early 2009. 13The business of Axis Legal was that of a specialist law firm, with the main area of practice focusing on digital media, entertainment, sports and fashion law, information technology, intellectual property, marketing and advertising and telecommunications. The legal practitioner handled both complex commercial advice and transactional work and commercial litigation. 14At the commencement of trading, the legal practitioner had engaged the professional services of Duncan Dovico, a mid-tiered chartered accountancy firm, in respect of the firm's financial matters. Specifically the legal practitioner says she engaged Duncan Dovico to look after the financial, taxation and accounting matters of the practice and to oversee the bookkeeper's work. She also engaged a part-time bookkeeper for the day to day accounting matters. 15The complainant became the personal assistant/secretary to the legal practitioner in about 2007 and was trained up and promoted to the role of assistant trademarks paralegal. 16The legal practitioner says that her practice grew fairly rapidly from 2005 to the extent that her staff increased in size during the first 2 years, and by 2009 the legal practice at its maximum employed fourteen staff including the legal practitioner. 17From the outset, the legal practice had cash flow problems, and as at 30 June 2009, Axis Legal's debtors totalled $360,134.43 of which $159,611.49 were related to current 30 day invoices. Included in this sum were four large debtors, some of whom continued to part pay their outstanding invoices whilst continuing to instruct Axis Legal in further matters over the next 12 months. By June 2009, Axis Legal had successfully won a Supreme Court matter for one of its large debtors and secured a party/party costs Order in favour of the client. 18The legal practice paid barrister's fees and overseas agents fees of approximately $150,000.00 although unable to recover those fees from its clients. 19In August 2009, Axis Legal engaged Dun & Bradstreet to take over the debtor recovery process, although it seems it was not very effective and ultimately two of the large debtors of the legal practice went into liquidation, with no hope of recovery by the legal practitioner of the debts owed by those debtors. 20In relation to the debtor against whom the legal practitioner had obtained a Costs Order, referred to earlier, that debtor went into administration on 24 June 2009 and although Axis Legal had obtained personal guarantees from directors of the debtor company, it turned out that the directors had no assets. 21In her Affidavit evidence, the legal practitioner stated that the superannuation debt in respect of Ms Kershler arose because of the failure of the debtors of Axis Legal to pay their invoices and inadequate credit control which resulted in the poor cash flow for Axis Legal. She stated that the employees were aware of the extent of the debts owing to Axis Legal by its clients, and she informed the staff of the problems and the employees assisted her in seeking recovery of money from defaulting clients. She further stated that during 2010 to 2011 she held meetings every two or three months with staff to keep them informed of the problems. During this period she was not able to give the staff any pay increases because of the cash flow problem. She also stated that she informed the staff of that fact and also not being able to pay superannuation because of the problems. She provided assurances to the staff that the superannuation would be paid in full together with any interest owing when she was able to make those payments, and that their employment would have to be terminated if they required payment at that point in time. She also informed them that she had sought personal loans, and that she was investigating selling her own home unit to meet the obligations. 22The legal practitioner instigated changes to the firm's client engagement procedures, to include the request for payment into the trust account of fees and disbursements, prior to the commencement of work in order to limit the firm's debtor exposure to about 30%. She also obtained personal loans from time to time to assist Axis Legal with its creditors, and she sought to refinance her home. 23In February 2011, the ATO refused to provide further time for the legal practitioner to pay her debts, the payment plan having been extended twice before, on the basis that one of the large debtors was having its party/party costs assessed, and that assessment had been delayed beyond the control of Axis Legal. 24Following receipt of the creditor's demand, the legal practitioner took accountancy advice and over the next four months investigated whether she could refinance her home unit, but the finance amount was not sufficient unless the debtors owed to Axis Legal could be reduced. The legal practitioner was advised by her accountant that Axis Legal would need to be placed into administration in order to avoid insolvent trading. Subsequently, the legal practitioner entered into a Deed of Company Arrangement as referred to earlier in these Reasons. 25Subsequently, an amount of $52,500.00 was recovered from a trade debtor and paid to the administrators of Axis Legal. 26In her evidence in chief, the legal practitioner said she had no current credit card facilities available to her nor could she borrow any further monies from her parents who had assisted her as much as they could. She currently employed nine persons but not all of them fulltime. She thought about five fulltime employees including administration staff. In relation to her turnover, she thought she might be able to bill between $40,000.00 to $60,000.00 per month. 27The Law Society cross examined the law practitioner at length. The legal practitioner gave her evidence in a frank and open manner. The focus of the cross examination was on the legal practitioner's personal and business transactions during the period when it appeared that the legal practice was struggling to pay its debts and whether if different choices had been made, a different outcome would have resulted. The chronology of events set out as follows is relevant to this question: (1)On 22 March 2005 the legal practitioner purchased 5,250 ordinary shares in a company known as 21 South Avenue Pty Limited for $485,000. This consideration entitled the legal practitioner to exclusive possession of a property in the Eastern Suburbs. (2)On 20 June 2005 the financial report of Axis Legal for the year ended 30 June 2005 details an unsecured loan from the legal practitioner in the sum of $14,186.17. (3)The legal practitioner's tax return for the period 1 July 2004 to 30 June 2005 showed the legal practitioner's taxable income at $51,080. (4)On 28 December 2005 a transfer of $5,000.00 took place from CBA Streamline account to the Axis Legal Pty Ltd account described as "SLD Director's loan" . (5)On 16 January 2006 the legal practitioner sent an email to a finance company presumably in relation to an application for a loan which stated "inter alia" "for value of property....... say $690,000.... my personal assets (home, contents, furniture, jewellery, artworks etc) would be worth between $70-$80,000. Don't have a car...... this is quite urgent so if you can escalate this it would be life saving!" (6)On 11 February, 2006 a transfer of $4,500.00 took place from a CBA Streamline account to the Axis Legal Pty Ltd account "SLD Director's loan". (7)On 28 April, 2006 a transfer of $5,000 took place from a CBA Home Loan account to the Axis Legal Pty Ltd described as 'SLD Bas Loan'. (8)On 1 May 2006 the legal practitioner leased a Mercedes Benz motor vehicle at an original cost of $104,580.00. The total motor vehicle expenses allocated on her individual tax return for 2006 was $8,116. (9)On 3 May 2006 a transfer took place of $5,000 from CBA Home Loan account to the Axis Legal Pty Ltd account described as "Loan from SLD". The loans totalled $19,500.00 for period 28 December 2005 to 30 June 2006. (10)On 31 August, 2006 a transfer took place of $1,200.00 from CBA Home Loan account to Axis Legal Pty Ltd. account described as 'loan from SLD'. (11)On 25 January, 2007 correspondence shows the legal practitioner writing to CBA in relation to an application for business credit. (12)As at 6 June, 2007, the Financial Statement of Axis Legal cites: (a)value of office furniture and equipment at $31,286.87 (b)current loans at $4,164.47 (c)Profit & Loss Statement cites wages $93,827.81 (13)On 12 June, 2007 the legal practitioner employs another solicitor, Rohan Singh. (14)On 12 June 2007 Axis Legal lodged its 2006 tax return which showed cost of sales at $44,154.00. The legal practitioner's salary of $78,164 was not included in Axis Legal's costs of sales. Also on the same date, the legal practitioner's tax return was lodged declaring a salary of $78,164.00, cost of Mercedes Benz (business klm travelled 2,410) totalling $8,116.00; taxable income of $70,048.00. Loans from the legal practitioner to Axis Legal for period 28 December, 2005 to 30 June, 2006 totalled $19,500. (15)As at 30 June 2007 Axis Legal's debtors totalled $171,342.83 of which $113,536.88 related to current 30 day invoices. (16)On 10 July 2007 the legal practitioner employed Solicitor, Megan MacGregor. (17)On 10 December 2007 the complainant commences employment as a paralegal with Axis Legal on the basis of "your salary is $57,000 per annum plus $5,130 superannuation which is equivalent to 9% of your salary". The Tribunal notes at this point that the complainant's superannuation entitlements were not paid in part or at all until October 2008. (18)On 31 December 2007 Colonial Rate Saver Home Loan summary account no. 5052020708 shows opening debit on 1 July 2007 of $125,900 and a closing debit on 31 December 2007 of the same reflecting the payment of interest but not principal. (19)On 18 February 2008 the legal practitioner makes car payments for January and February 2008. (20)On 7 March 2008 an email from the legal practitioner to the CBA (Anthony Small) states "my apartment is probably worth between $800,000 to $850,000 but I have attributed a conservative figure to it. I have confirmed that the payments for (my car are) are completely up to date (as I paid for January and February on 18/2/.") (21)On 8 March 2008 the CBA approves a temporary excess limit of $20,000 for seventy days at 16.05% pa, interest expiring on 5 May 2008. (22)On 26 March 2008 Anthony Small from CBA emailed the legal practitioner re the valuation of her unit and her accountant's timeline for provision of evidence of salary. (23)In early April 2008 the legal practitioner states that she has listed her unit for rental and on 9 April 2008 the legal practitioner emailed Anthony Small of CBA "my unit ....... is renovated to the highest standard. I spent approximately $120k on the renovations and it has very expensive features and joinery not found in units under $1,000,000 in the area eg travertine floor throughout; under floor heating; expensive marble kitchen with German appliances using a swivel pantry, motion drawers, hidden fridge and dishwasher (built in) and Euro style concertina doors that close off the kitchen so that it looks like part of the living room furniture. Last week I listed the unit for rent fully furnished at $900 pw (and $800 pw unfurnished) as I want to make extra payments on my mortgage. I have no problem with parking my car on the street....... It is a Mercedes SLK ......" "....... I had a value for my unit ..... two years ago (ie one year after purchase at $485,000) for $640k". (24)On 16 April 2008 the CBA notifies the law practitioner that it has approved a variation to her facilities on terms. The borrower is Axis Legal. (25)On 17 April 2008 the legal practitioner accepts the CBA's offer of the business loan of $75,000 for five years at 12.10% charged monthly from 5 May 2008 at $1660 per month together with an overdraft limit of $25,000 at 15.15% per annum secured by a guarantee limited to $100,000 from the legal practitioner supported by a second equitable charge over the Eastern Suburbs property. (26)As at 30 June 2008 the Colonial Rate Saver home loan summary account showed opening debit on 1 January 2008 of $379,647.30 and a closing debit on 30 June of $372,789.65 paying both interest and principal. Accumulated special repayments were $3,381.14. (27)As at 30 June 2008 Axis Legal was no longer paying staff superannuation entitlements in full. (28)As at 1 July 2008 there were no further superannuation payments paid to the complainant. (29)On 30 June 2008 Mr Rohan Singh leaves the employment of Axis Legal. (30)On 10 July 2008 Axis Legal's payroll advice as at 16 June 2008 to 15 July 2008 for the legal practitioner shows an annual salary of $100,000. (31)On 14 July 2008 Axis Legal employs Solicitor, Nicole Johnschwager. (32)On 25 August 2008 the legal practitioner emailed iChoice Home Loans and Finance for a loan stating 'I have a property with a rental income of $39K pa and I earn $100,000 per year (including in 2006) It's not a business loan, I am an employee of Axis Legal, not just a director....' (33)In August, 2008 Axis Legal engages CSC Debt Collection to assist in debt recovery. (34)In October 2008 superannuation payments due to the complainant from the commencement of her employment until 30 June 2008 were paid. (35)During the period 2008/2009 the legal practitioner states in her letter dated 8 June 2012 to the Law Society "four clients of Axis Legal developed significant indebtedness". (36)13 February 2009 Axis Legal employs Solicitor, Osena Boghossian. (37)As at 30 June 2009 Axis Legal debtors total $360,134.43 ($159,611.49 relating to current 30 day invoices). (38)In August 2009 Axis Legal engages Dunn and Bradstreet for debt recovery. (39)On 14 August 2009 Axis Legal employs Solicitor, Paul Kapiris. (40)As at March 2010 Axis Legal is suspected of insolvency. (41)On 29 April, 2010 Tasos Karteras of CBA emails the legal practitioner attaching original loan documents for Better Business Loan A/c No 062 156 10173310. (42)On 8 June, 2010 the complainant attends a staff meeting at Axis Legal. (43)On 10 June, 2010, Axis Legal Accounts sends email to the complainant formalising dates for the end of her employment. (44)On 15 July, 2010 Axis Legal employs solicitor, Kelly Tomaich. (45)On 27 July, 2010, Axis Legal sends email to the complainant stating that a minimum of $500.00 per month of her superannuation will be paid by 20th of each month starting 10 August, 2010. (46)On 31 August, 2010 the complainant ceases employment with Axis Legal. At that date the amount of superannuation payments due to Ms. Kershler is $11,115.00. (47)On 14 September, 2010, Axis Legal starts making payments towards arrears of the complainant's superannuation. (48)On 27 September, 2010 a netbank transfer of $5,000.00 is credited to A/c No. 2156-10129993 for $5,000.00 described as 'loan from TL Delpo'. (49)On 14 November, 2010, the legal practitioner seeks to borrow moneys by way of Standard Home Loan from NAB subsequently refused by NAB 'as unit is company title'. (50)On 30 November, 2010 the legal practitioner borrows $20,000 from her father/parents F G Delpopolo. (51)On 24 December, 2010, an amount of $30,000.00 is deposited into the account of Axis Legal 'F & G Delpopolo'. (52)On 29 December, 2010 the legal practitioner pays herself the sum of $6,083.00 from Axis Legal A/c. (53)On 16 January, 2011 the legal practitioner sends email to Theo@archwealth re 'My Loan App' stating..... 'If my loan is not approved I will need to sell my unit to pay my parents back $50K asap....' (54)On 3 March, 2011 CBA approves an investment home loan to legal practitioner for $47,000.00, loan repayments to be debited from CBA A/c no. 062 1282 8019013, Burwood. In her oral evidence the legal practitioner said that $40,000 of this advance was paid back to her parents. (55)In March, 2011 Axis Legal is insolvent and on 8 March, 2011 the ATO serves its statutory demand for $164,631.29. 28In a report to creditor's, the Administrator stated that preliminary investigations identified several payments totalling approximately $100,000.00 paid to the legal practitioner, within the 12 months prior to the date of the appointment of the Administrator, such payments may be considered as unfair director related transactions. The report goes on to say the transactions appear to be for the repayment of a loan, or loans, to the company and that the amount may increase as transactions up to 4 years prior to the appointment of the administrator may be recovered. 29In evidence, before the Tribunal, is a letter from a Catherine Irving headed 'Taxation and Accounting' at the firm Thirdview, who acted as accountants and tax agents for the legal practitioner and her related entities. This letter confirms that payments of approximately $100,000.00 were made to the legal practitioner and that some of those payments were in relation to director's drawings, as the legal practitioner did not take a salary during the relevant period. The letter also asserts that some of the monies were in relation to business expenses that the legal practitioner paid personally on behalf of the company. 30In her oral evidence, the Solicitor said that $40,000 of the unpaid superannuation was her own and that she had enquired of the Administrator if that amount could be allocated to her employees' unpaid superannuation entitlements in priority to hers but was informed that was not possible.

The Law 31The Law Society referred to a number of decisions in support of its proposition that we should make a finding of professional misconduct. 32In Council of the Law Society v Bouzanis [2006] NSWADT 55, the solicitor failed to make a payment of $9,532.51 to an employee's superannuation fund. The employment period was 21 March, 2000 to 13 August, 2003 and it was not until 12 March, 2004 that the superannuation payment was made, but only after the solicitor 'received correspondence from solicitors acting for (the employee) and the intervention of the (Law) Society.' This case is on point and for that reason we quote directly from the Tribunal's decision at [15ff] commencing at the reference to Cummins at [18] as follows: '[15]....,18 as Mason P said in Hamman: '[85] I emphatically dispute the proposition that defrauding 'the revenue' for personal gain is of lesser seriousness than defrauding a client, a member of the public or a corporation. The demonstrated unfitness to be trusted in serious matters is identical. Each category of 'victim' is a juristic person whose rights to receive property are protected by law, including the criminal law in the case of dishonest interception. 'The Revenue' may not have a human face, but neither does a corporation. But behind each (in the final analysis) are human faces who are ultimately worse off in consequences of fraud. Dishonest non-disclosure of income also increases the burdens on taxpayers generally because rates of tax inevitably reflect effective collection levels. That explains why there is no legal or moral distinction between defrauding an individual and defrauding 'the revenue'. 33Honesty and integrity are important in so many spheres of conduct. However, in some spheres, significant public interests are involved in the conduct of particular persons and the state regulates and restricts those who are entitled to engage in those activities and acquire the privileges associated with a particular status. The legal profession has long required the highest standards of integrity. 34There are four interrelated interests involved. Clients must feel secure in confiding their secrets and entrusting their most personal affairs to lawyers. Fellow practitioners must be able to depend implicitly on the word and the behaviour of their colleagues. The judiciary must have confidence in those who appear before the courts. The public must have confidence in the legal profession by reason of the central role the profession plays in the administration of justice. Many aspects of the administration of justice depend on the trust by the judiciary and/or the public in the performance of professional obligations by professional people'. 35His Honour went on to consider what was meant by the expression 'professional misconduct' and he said at 56: 'There is authority in favour of extending the terminology 'professional misconduct' to acts not occurring directly in the course of professional practice. That is not to say that any form of personal conduct may be regarded as professional misconduct. The authorities appear to me to suggest two kinds of relationships that justify applying the terminology in this broader way. First, acts may be sufficiently closely connected with actual practice, albeit not occurring in the course of such practice. Secondly, conduct outside the course of practice may manifest the presence or absence of qualities which are incompatible with, or essential for, the conduct of practice. In this second case, the terminology of 'professional misconduct' overlaps with and, usually it is not necessary to distinguish it from the terminology of 'good fame and character' or 'fit and proper person.' 36It is the view of this Tribunal that His Honour's Judgment does support the submission that the relationship between the conduct and the practice of law is all that was required to link any misconduct to the description 'professional misconduct'. 37The Tribunal finds that the failure by the solicitor to make superannuation payments on behalf of his employee Mr Apps, during the course of his employment which was between 21 March 2000 and 13 August, 2003, and the further finding that the superannuation payment was only made on behalf of Mr. Apps after the solicitor received correspondence from solicitors representing Mr. Apps to be a sufficiently serious abrogation of his fiscal responsibilities in the practise of law to warrant a finding by this Tribunal that the solicitor is guilty of professional misconduct.' 38The distinguishing factor in Bouzanis from the case before us is that the legal practitioner at all times recognised and acknowledged her obligation to pay the superannuation contribution and had put arrangements in place to part pay well before the complainant lodged the complaint whereas Mr. Bouzanis only acknowledged his obligations after the Law Society intervened. 39In Law Society v. Vosnakis [2007] NSWADT 42 the solicitor failed to comply with a Notice under Section 162 Legal Profession Act 1987, failed to assist the Law Society in the investigation of complaints, misappropriated deposit moneys, borrowed money from a client in breach of Rule 12, failed to lodge GST returns from July 2000, failed to document a loan when borrowing from a client, failed to secure the interests of that client and placed himself in a conflict of interest and failed to pay PAYG in relation to his employees and delayed paying superannuation guarantee levies for his employees. 40The relevance of this decision to the case before us is the finding that the failure to make the superannuation guarantee payments in respect of one employee from August 1996 to April 2004, with respect to another employee for approximately 5 years until November 2004, with respect to a third employee from January 2003 until May 2005 and in respect of a fourth employee from June 2003 until May, 2005 constituted professional misconduct. 41In Law Society v. Somerfield [2008] NSWADT 235 the solicitor was found guilty of professional misconduct, fined $5,000 and publicly reprimanded in relation to a slew of various complaints (including acting without instructions, failure to honour an undertaking, and so on) and 'failed to pay superannuation entitlements due on behalf of a total of 25 employees.... for the period commencing from 1 July 2002 until 31 December 2006.' 42It was conceded that the 'failure to pay was due to the solicitor's financial incapacity at the time' and the Tribunal at [6] observed that 'there was no dishonesty involved in the several incidents particularised and the failure to pay contributions under the Superannuation Guarantee Charge Act 1992 arose from Mr. Somerfield's lack of financial resources flowing from the poor financial performance of his practice. He had undertaken to pay the superannuation contributions, and intended to do so, but ultimately did not have the financial resources to meet his undertaking.' 43In the decision of Law Society of NSW and Koffel [2010] NSW ADT 149 the Tribunal considered the decisions of Vosnakis and Somerfield at paragraph 48 and said, 'this Tribunal is of the opinion that neither Vosnakis nor Somerfield are authorities for the proposition advanced by the Law Society in the matter now before us. It is plain to us that the facts in Vosnakis differ significantly from the facts in this matter of Koffel; similarly the facts in Somerfield involved a number of separate issues and, importantly, in circumstances where all parties, including the Legal Services Commissioner, joined in seeking the various orders ultimately made by the Tribunal by consent. It cannot be said that Somerfield bears any relationship to the matter now before us, simply because this solicitor Mr. Koffel did in fact recognise his professional, corporate and moral obligations and met those obligations. Thus, in our opinion, the mere fact of a failure to pay superannuation guarantee contributions on time does not, of itself, constitute professional misconduct. It is the circumstances surrounding the failure, the consequences of the failure, and the actions subsequently taken by the solicitor, that determine whether the conduct constitutes professional misconduct.' 44The Tribunal ultimately dismissed the Application in Koffel on the basis of a combination of observations by the Court of Appeal in NSW Bar Association v Murphy [2002] NSW CA 138 and the observations independently reached by the Tribunal in Koffel saying, 'this is a case where, clearly on the evidence, the practitioner has done all that he believed he reasonably could to ultimately discharge his statutory obligations to pay the superannuation guarantee levies in respect of his employees. This is so notwithstanding the fact that his employees were employed by two proprietary corporations - the practitioner himself personally assumed those obligations in the two Deeds of Company Arrangements (to which we have made reference above) and has discharged those personal obligations. Indeed, in the circumstances before us this practitioner has demonstrated that he is a fit and proper person to remain on the roll of legal practitioners.' 45The Koffel case has many similarities to the case before us and we were urged by Counsel for the legal practitioner to follow it. The distinguishing factor between Koffel and the instant case is that Mr. and Mrs. Koffel took steps to sell their home and other personal assets to reduce debt within reasonable proximity of the relevant entity's failure to pay its fiscal debts. In the words of the presiding member, 'The solicitor's evidence, which was clear and unchallenged, was that once the matter had been drawn to his attention he did what he believed he could reasonably do in all the financial circumstances to meet his revenue responsibilities, thus demonstrating conduct in a professional (and personal) sense a commitment to pay the outstanding debts including the superannuation payments.' Law Society of NSW v Koffel [2010] NSWADT 149. 46The final authority to which the Tribunal was referred to is Council of the Law Society of New South Wales v Dalla [2011] NSWADT 130. Mr. Dalla failed to pay employee's superannuation contribution entitlement in respect to his employee Ms Elshab for a period of years believing she was an independent contractor. The Law Society accepted the belief was honest. The parties entered into an Instrument of Consent and in accepting the said Instrument, the Tribunal said (at paragraph [36]) ......Having regard to this, to his age, health and present financial circumstances (as outlined above at [27]), to what is likely to be his professional role in the future and to the approach to broadly similar facts taken by the Tribunal in Law Society of New South Wales v Gillroy [2010] NSWADT 232, we consider that the single order proposed by way of penalty in the Instrument of Consent - namely, a reprimand - is 'within the permissible range'. The conduct was found to be professional misconduct.

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