Law Society of New South Wales v Grech [2005] NSWCA 127 | Case summary

REASONS FOR DECISION Introduction 1 On 8 August 2005, the Applicant, the Law Society of New South Wales, filed in the Tribunal an Information alleging that the Respondent solicitor, Henry Vincent Grech ('the Solicitor') was guilty of professional misconduct on five grounds. Schedule 1 of the Information set out particulars of the alleged grounds of misconduct. As the Information was filed before the commencement of the Legal Profession Act 2004, it fell to be determined under the Legal Profession Act 1987 ('the Act'). 2 Towards the end of the hearing, which took place on 15 and 16 November 2005, we made some rulings, based on the terms of prior correspondence between the parties or their representatives, the way in which the Grounds set out in the Information were particularised and the nature of the evidence on which Mr Boyd, appearing for the Law Society, sought to rely. They included a ruling under s 167A of the Act that the Law Society should have leave to amend the particulars relating to Ground 1 of the Information. The outcome of this amendment is explained below. 3 In consequence of these rulings and of some concessions made by Mr Boyd, the scope of the Information was significantly reduced and a number of allegations contained in it were no longer of direct relevance to the outcome of the proceedings. 4 We do not propose to set out in detail all the allegations that were removed from the Law Society's case. But we will refer to some of them, as they form part of the factual background. By the end of the hearing, there was little dispute as to the relevant events. This is because in correspondence with the Law Society before the Information was filed, in his Reply, in an affidavit filed in the proceedings and in submissions handed up during the hearing, the Solicitor made various admissions, either directly or through his legal representatives. Relevant events 5 The Solicitor was admitted and commenced practice on 4 June 1971. At all relevant times, so far as these proceedings are concerned, he was the sole principal of a firm called Grech Partners, which employed about 25 people. 6 During 1999, Grech Partners acted for Ms Narin Shamoun in Family Court proceedings involving her husband, Mr Farouk Shamoun. Mr David Chesters, a solicitor employed by Grech Partners, had carriage of the matter. 7 Consent orders filed in the Family Court on 3 May 1999 provided for various payments to be made, in order of priority, out of the proceeds of sale of a property at Quakers Hill owned by Mr and Ms Shamoun. One of these payments was to be for legal fees on the sale, in which Grech Partners had acted for both of the vendors. A further payment of lower priority was to be to Avco Finance Co in respect of a loan or line of credit taken out by Mr Shamoun. 8 The balance after all the specified payments had been made was to be remitted to Grech Partners, as solicitors for Ms Shamoun, 'on her behalf'. As matters transpired, however, the proceeds of sale were insufficient to meet all the specified payments. 9 At the settlement of the sale on 25 June 1999, Grech Partners received a cheque for their costs and disbursements as solicitors for the vendors. On 28 June 1999, the balance of the proceeds still to be distributed, then amounting to $26,790.36, was paid into the trust account of Grech Partners. 10 The trust account ledger card which recorded this payment, along with a number of prior and subsequent transactions, bore the name of Ms Shamoun and was headed 're F/L prop sett'. Although on the sale of the property Grech Partners acted for both Mr and Ms Shamoun, no separate ledger card was created to reflect this, or the fact that both of them had proprietary interests in the proceeds of sale. 11 On 29 June 1999, although Grech Partners had received no authority to do so from Mr Shamoun, the Solicitor signed a cheque transferring the sum of $1,664.23 from the trust account to his office account. This was the amount due to the firm for its costs for representing Ms Shamoun in the family law proceedings. The cheque was prepared by an employee of the firm belonging to the accounts department. The Solicitor assumed that the payment had been approved or authorised by Mr Chesters and did not inspect the file or take any other step (other than checking that there were funds available in the trust account) to ensure that there was no impediment to making the payment. 12 On 22 December 1999, Mr Chesters withdrew $24,000 from the trust account to make two payments required by the Family Court orders. The amount remaining in the account was $1,126.13. 13 On 31 March 2000, Mr Chesters ceased to be employed by Grech Partners. 14 On 5 July 2000, the Solicitor, in circumstances resembling those of the transfer of funds on 29 June 1999, signed a cheque making a similarly unauthorised transfer of $196.57 from the trust account to his office account. He had forgotten that Mr Chesters had left the firm. 15 On 20 September 2000, the Solicitor signed in similar circumstances a further cheque making a similarly unauthorised transfer of $929.56. In consequence, no funds were held in the trust account on behalf of either Mr Shamoun or Ms Shamoun. 16 On 24 April 2001, Mr Shamoun lodged a complaint against Mr Chesters with the Legal Services Commissioner, claiming that no payment had been made to Avco Finance Co on his behalf, as required by the Family Court orders, and that his attempts to obtain an explanation from Grech Partners had been unsuccessful. On 30 April 2001, the Commissioner referred this complaint to the Law Society. 17 The Law Society first notified the Solicitor of this complaint in a letter dated 17 May 2001. Following a brief reply by the Solicitor, dated 2 May 2001, the Law Society wrote back to him on 29 May 2001. In this letter, the Law Society requested the following documents: (a) his firm's trust account ledger for Ms Shamoun, (b) 'copies of memorandum' of costs and disbursements sent to her in her family law matter after 31 March 2000, (c) all correspondence between his firm and Mr Shamoun following the making of the consent orders in April 1999, (d) 'the family law settlement document' and (e) the name of the person who took over the matter within the firm following the departure of Mr Chesters. 18 Following some intervening correspondence, the Law Society wrote again to the Solicitor on 25 July 2001. In this letter, it repeated its request for documents made in its letter of 29 May 2001 (a copy of which was enclosed) and asked for all 'information' that, according to the Solicitor, provided authorisation for the transfers of funds in July and September 2000 from the trust account of Ms Shamoun to the firm's office account. It also asked whether the Solicitor would authorise the release to Mr Chesters of a letter apparently written by the Solicitor on 10 July 2001 to the Law Society. In addition, it observed that this matter might give grounds for a Law Society complaint against the Solicitor and that there appeared to be 'possible breaches' of s 61 of the Act. 19 A letter dated 7 August 2001 from 'Grech Partners', on that firm's letterhead, was sent to the Law Society. But in common with the letter of 10 July 2001, to which we have just referred, it was not written by the Solicitor. The writer was instead Mr Vincent J Grech, who is the Solicitor's son. This could be discerned from the following notations at the top: 'Our Ref: VG' and 'Enquiries: Vincent J Grech'. 20 Mr Vincent J Grech was noted on the letterhead as the firm's 'Practice Director'. He was not legally qualified. At that time he had been employed in the firm for about 11 years. His duties included the management and supervision of administrative matters. 21 The letter of 7 August 2001 to the Law Society referred to 'previous discussions in this matter' and enclosed five documents. These included copies of the Family Court consent orders and of letters dated 22 November 1999 and 1 February 2000 to Mr Shamoun. It will be noted that only the first of these documents was requested in the Law Society's letter of 29 May 2001. It is not necessary here to outline the contents of the letter of 22 November 1999, which had been written by Mr Chesters, and the letter of 1 February 2000 was not in evidence in these proceedings. 22 In a letter of reply dated 29 August 2001, addressed to Mr Vincent J Grech, the Law Society noted inter alia that his letter of 7 August 2001 failed to 'address the possible breaches' of s 61 of the Act raised in the Law Society's letter of 25 July 2001 and indicated that his 'cooperation' was 'necessary for a resolution of this dispute'. It asked for his response on four specific issues. These included the grounds on which he claimed to be entitled to make the transfers of June 1999, July 2000 and September 2000 from the trust account to the office account of Grech Partners ahead of the payment to Avco required by the Family Court consent orders. 23 This letter of 29 August 2001 made no reference to the fact that it responded to a letter written by, and was addressed to, Mr Vincent J Grech, even though earlier correspondence from the Law Society had been addressed to the Solicitor, in his capacity as sole principal of Grech Partners. The evidence before us included a copy of a letter dated 22 February 2005 written by Mr Knox Sinclair, a solicitor employed by the Law Society who was conducting this correspondence during 2001, to Mr Richard Gulley, acting for the Solicitor. In it, Mr Sinclair stated that in the course of correspondence on this matter between May and October 2001 and when conducting telephone discussions such as were referred to in Mr Vincent J Grech's letter of 7 August 2001, he believed that he was dealing with the Solicitor himself. Since the Solicitor's name is Henry Vincent Grech and the letter of 10 July 2001, to which we have referred, had the notation 'Enquiries: Vince Grech', this mistake was understandable. 24 Mr Vincent J Grech wrote the letter of 7 August 2001, along with two other letters to the Law Society dated 10 July and 18 September 2001, in compliance with instructions from the Solicitor to 'investigate the matter' and correspond with the Law Society. The Solicitor gave him these instructions after receiving the Law Society's letter of 17 May 2001. He did not discuss the contents of any of these letters with the Solicitor, who was not involved in the investigation, and they were sent without the Solicitor's knowledge. 25 In a letter dated 21 December 2001 addressed to Mr Henry Grech, the Law Society stated that the Legal Services Commissioner had determined that the original complaint by Mr Shamoun against Mr Chesters should now be investigated by the Law Society as a complaint against the Solicitor. It referred to previous correspondence between the Law Society and the Solicitor and specified the 'conduct issues' arising from the complaint as 'transferring costs without authority'. It required the Solicitor to provide his written response, with copies of any supporting documents, and to answer two additional questions, on or before 21 January 2002. 26 After this letter was received, Mr Vincent J Grech involved the Solicitor in the matter. Thereafter the Solicitor conducted the correspondence with the Law Society, though he consulted his son on some aspects of the matter. 27 On 21 January 2002, the Solicitor swore a statutory declaration and sent it to the Law Society. For present purposes, the relevant statements in it included the following: (a) that the accounts department of his firm, seeing that there was an outstanding account for costs due to the firm, had 'inadvertently' made the transfers of July and September 2000, totalling $1,126.13, from the trust account into the office account, without realising that they were in breach of a Family Court order; (b) that according to 'standard practice' within the firm, the solicitor with carriage of the matter would direct such a transfer; (c) that this practice was not followed in this instance because Mr Chesters had left the firm; (d) that he himself 'at no time had any input carriage or conduct of the matter and was not aware of the Orders made by the Family Court'; and (e) that he apologised for this error, which 'should not have occurred'. 28 The Solicitor also stated as follows:- I have arranged for an amount of one thousand one hundred and twenty six dollars and thirteen cents ($1,126.13) to be deposited back to the Trust Account. Those funds will be paid to Acco ( sic ) Finance upon receipt of the Authority from Mr Shamoun,… 29 The Solicitor's evidence was that before making the declaration of 21 January 2002 he verbally instructed Ms Janette Freeman to make this transfer of the sum of $1,216.13. There were more than sufficient funds in his office account to enable the transfer to be made. He did not keep a diary note of these instructions. Ms Freeman had been employed by the firm since March 1997 and was a bookkeeper and office manager in the accounts department. According to the Solicitor, she was very competent and was held in high regard both inside and outside the office, having always in the past carried out his instructions. He therefore believed that his instructions would be carried out, having no reason to believe otherwise. He took no steps to check whether they were in fact carried out. 30 In a statutory declaration dated 25 February 2003, forming part of the evidence in these proceedings, Ms Freeman stated that she recalled these verbal instructions from the Solicitor 'in about January 2002', but that she overlooked them and did not make the transfer until some months later. The transfer was in fact made on 27 June 2002. 31 In a letter to the Solicitor dated 3 April 2002, the Law Society put some further questions to him regarding the transfers of July and September 2000. It also asked him to provide a copy of his trust ledger in the matter, including a record of the transfer of $1,126.13 that he claimed to have 'arranged' in his statutory declaration of 21 January 2002. The letter also stated that the Law Society had not 'heard further' from Mr Shamoun (though it had recently written to him) and that the Solicitor's distribution of trust funds was not a matter on which the Law Society could advise him. The letter stipulated that he should reply within 14 days. 32 In a letter to the Solicitor dated 15 April 2002, the Law Society confirmed (a) that he would be in a position to provide the requested information by 24 April 2002 and (b) that it would assist the Professional Conduct Committee if he could provide an explanation of his delay in paying 'the monies' back into his trust account following the Law Society's 'letters of advice' dated 25 July 2001 and 29 August 2001 questioning his authority to withdraw 'the monies'. 33 On 18 April 2002, the Solicitor wrote a letter giving answers to the Law Society's questions. He stated that a copy of the ledger sheet was enclosed. He also stated that his failure to realise that the disposition of the funds in question was governed by Family Court orders was attributable to his failure to consult the file and to the fact that the existence of the orders was not noted on the ledger. At three points in the letter, he said that this was a 'one-off' or 'isolated' instance of his having failed to check the appropriateness of transfers out of his trust account and that he took full responsibility for this and other transactions on the trust account. This letter also contained the following statements:- We were unable to obtain instructions from our client and we were unable to comply with the Orders... I note that you have now requested our client to give us an appropriate instruction… 34 The ledger sheet was not, however, enclosed with this letter. In a statutory declaration dated 24 January 2003, forming part of the evidence in these proceedings, Ms Gail Cole stated as follows: (a) that she was the Solicitor's secretary; (b) that she had typed and mailed the letter of 18 April 2002; (c) that at that time her duty was to present letters for his signature without enclosures, then to attach any enclosures before photocopying and mailing them; (d) that he had drawn to her attention the fact that this letter had been sent without a copy of the trust ledger; and (e) that he had on numerous occasions reminded her that enclosures must be attached to letters, as he did not see letters after signing them. 35 On 3 May 2002, the Law Society wrote to the Solicitor pointing out that the trust ledger had not been enclosed in the letter of 18 April 2002 and asking that it be provided by return mail. It also asked him to indicate whether Mr Shamoun had ever been a client of his firm and, if so, to provide a copy of his file 36 In a letter dated 24 June 2002, the Law Society referred to telephone calls on 5 and 6 June to the Solicitor's office, the first of which had been returned, and reiterated its requests for the trust ledger and, if Mr Shamoun had indeed been a client of the firm, his file. 37 In a letter dated 1 July 2002, the Solicitor apologised for the delay in replying, indicating that there had been a recent death in his family. His mother had in fact died during June (in evidence, the Solicitor gave 13 June as the date, but we were later told from the Bar table that it was 6 June). Her death followed an illness during which she had been in a nursing home for about a year and he had devoted a significant amount of time to caring for her. He also said in evidence that he was 'seriously affected' for a significant period after her death. In this letter of 1 July 2002, he stated that Mr Shamoun was not and had never been a client of his firm. He also enclosed the trust ledger and briefly explained that although he had directed the transfer of funds outlined in the statutory declaration of 21 January 2002, he had not followed the matter up and there had been a delay in making the transfer. 38 In a letter dated 1 August 2002 to the Law Society, the Solicitor stated that, having received authorisation from Ms Shamoun, he had paid the amount of $1,126.13 remaining in her trust account to Mr Shamoun. 39 In a further letter dated 26 August 2002, the Solicitor repeated that Mr Shamoun was not and had never been a client of his firm. 40 In a letter dated 22 November 2002, headed 'Complaint by Farouk Shamoun', the Law Society required the Solicitor to provide a statutory declaration within 14 days answering a number of questions relating to (a) the transfers of July and September 2000, totalling $1,126.13, from the trust account of Ms Shamoun to his office account and (b) his subsequent directions for this money to be repaid and his failure to follow up those directions. The letter also required that within 14 days he should provide statutory declarations from the person or persons within his accounts department who were involved in these matters. 41 Up to this point of time, all of the correspondence between the Law Society and the Solicitor related to the complaint dated 24 April 2001 by Mr Shamoun against Mr Chesters or its reformulation as a complaint by Mr Shamoun against the Solicitor, as notified to him on 21 December 2001 (see [25] above). But on 12 December 2002, the Law Society by its Professional Conduct Committee resolved to make its own complaint against the Solicitor. This was to the effect that he had misled the Law Society by indicating in his statutory declaration of 21 January 2002 that the repayment of $1,126.13 to the trust account was 'solely within his power to carry out', whereas it had not been effected until 29 June 2002. 42 This complaint was communicated to the Solicitor on 13 December 2002, with a requirement that he provide a written response by 13 January 2003. 43 On 19 December 2002, the Solicitor sent to the Law Society a statutory declaration explaining in detail the reasons, outlined above at [29 - 30], why the repayment of $1,126.13 had not occurred until 29 June 2002. 44 In a letter dated 23 December 2002, headed 'Complaint by Farouk Shamoun', the Law Society pointed out to the Solicitor that this declaration appeared to respond to the Law Society's complaint against him but did not provide the information required in the Law Society's letter of 22 November 2002 regarding Mr Shamoun's complaint. It foreshadowed the issue of a Notice under s 152 of the Act if the Solicitor did not provide by 13 January 2003 the declarations required in the letter of 22 November. 45 In a second letter dated 23 December 2002, headed 'Complaint by Law Society', the Law Society required the Solicitor to provide by 13 January 2003 a statutory declaration containing further information regarding the delays in making the repayment of $1,126.13 and sending the trust account ledger to the Law Society. It also required him to provide a statutory declaration by Ms Freeman. 46 In a letter dated 15 January 2003 to the Law Society, headed 'Complaint by Farouk Shamoun', the Solicitor requested 'a short extension of time', on the grounds that the office had closed for Christmas on 23 December and he had been on leave until 13 January. 47 In a letter dated 24 January 2003 to the Law Society, headed 'Farouk Shamoun', the Solicitor enclosed the statutory declaration by Ms Cole referred to above at [34], and also a statutory declaration by himself, further explaining the delays in making the repayment of $1,126.13 and sending the trust account ledger to the Law Society. 48 In a letter dated 29 January 2003, headed 'Complaint by Farouk Shamoun', the Law Society pointed out to the Solicitor that he had still not provided the statutory declarations required in its letter of 22 November 2002, and foreshadowed the issue of a Notice under s 152 of the Act if he did not provide these declarations within 14 days. 49 In a letter to the Law Society dated 28 February 2003, headed 'Farouk Shamoun', the Solicitor enclosed the statutory declaration by Ms Freeman referred to above at [30]. 50 In a letter dated 4 March 2003, headed 'Complaint by Law Society', the Law Society acknowledged receipt of this declaration and indicated that a report on this complaint would be given to the Professional Conduct Committee following completion of the investigation into Mr Shamoun's complaint. 51 In a second letter dated 4 March 2003, headed 'Complaint by Farouk Shamoun', the Law Society advised the Solicitor that in view of his failure to provide the information requested on 22 November 2002 the issue of a s 152 Notice to him would be recommended to the Professional Conduct Committee at its next meeting. 52 In a letter to the Solicitor dated 11 March 2003, also headed 'Complaint by Farouk Shamoun', the Law Society repeated the questions set out in the letter of 22 November 2002, required his answers to them by 19 March 2003 and stated that if these answers were not forthcoming the issue of a s 152 Notice to him would be recommended to the Professional Conduct Committee at its next meeting on 20 March 2003. 53 In a letter dated 14 March 2003, headed 'Farouk Shamoun', the Solicitor enclosed a statutory declaration by him providing answers to the questions contained in the letter of 22 November 2002. The Solicitor apologised for the failure to reply to this letter, adding that 'we' - apparently meaning his firm - 'were under the misunderstanding that you did not require a reply' to it. 54 In a letter dated 17 March 2003, headed 'Complaint by Farouk Shamoun', the Law Society acknowledged receipt of this declaration, made some comments on its contents and stated that the issue of a s 152 Notice would now not be recommended. 55 On 20 March 2003, the Law Society by its Professional Conduct Committee resolved to make a second complaint against the Solicitor. Referring to his handling of the sale proceeds of the matrimonial property of Mr and Ms Shamoun, the complaint alleged that he had (a) wilfully breached s 61 of the Act and (b) knowingly breached an order of the Family Court dated 23 March 1999. In a letter dated 21 March 2003 advising him of this complaint, the Law Society referred him to prior correspondence relating to the earlier complaints and required his written response within 14 days. 56 In a letter dated 2 April 2003 to the Law Society, Mr Richard Gulley, solicitor, advised that he had received instructions from the Solicitor with regard to the complaints. 57 In a further letter dated 11 April 2003, Mr Gulley drew to the Law Society's attention the fact that, contrary to the Solicitor's belief, the withdrawal of $1,664.23 from the trust account of Grech Partners on 29 June 1999 (see [11] above]) had not been as payment for this firm's costs and disbursements in acting on the sale of Mr and Ms Shamoun's property. Instead, it was for the firm's costs and disbursements in acting for Ms Shamoun in her family law proceedings. The costs and disbursements on the sale, amounting to $1,255.15, had been paid direct to the firm on settlement. 58 Mr Gulley stated also in this letter that (a) the Solicitor accepted that the payment should not have been made and was in breach of Family Court orders and (b) the Solicitor had told him that the money had been repaid to the trust account on 9 April 2003. Enclosed with the letter were documents providing evidence of this repayment, together with the firm's file on the sale of the Shamouns' property. 59 Between 11 April 2003 and the date of filing of the Information in these proceedings (8 August 2005), numerous letters passed between the Law Society and Mr Gulley. There is no need to summarise this correspondence. It was instrumental, in part, in narrowing the range of (a) the allegations by the Law Society that we must now consider and (b) the disputed matters of fact (see [2 - 4] above). 60 In concluding this outline of the relevant events, we should however note the making of two additional complaints by the Law Society against the Solicitor. These were (a) a complaint dated 30 November 2003, relating to the transfer of $1,664.23 from the trust account to the office account of Grech Partners on 29 June 1999, and (b) a complaint dated 30 September 2004, alleging that the Solicitor had (i) misled or attempted to mislead the Law Society, (ii) failed to assist or cooperate with it in its investigations and (iii) delayed in repaying the sum of $1,126.13 that had been transferred into his office account in the transactions of July and September 2000. The allegations subsisting against the Solicitor 61 By the time the hearing of this matter concluded, the range of allegations made against the Solicitor in the Information was reduced for the reasons explained above at [2 - 4]. We will now set out and discuss the remaining allegations. 62 The Information, as we have said, contained five Grounds on which we are asked to make a finding of professional misconduct. There was no claim that, in the alternative, the Solicitor should be found guilty of unsatisfactory professional conduct. 63 We will now address the five Grounds in the order in which they appeared in the Information. Ground 1: wilful breach of s 61 64 In the Information as initially formulated and particularised, Ground 1 alleged that the Solicitor wilfully breached s 61 of the Act by virtue of making the transfer of $1,664.23 on 29 June 1999 and the transfers, totalling $1,126.13, on 5 July and 20 September 2000, in each case from his trust account to his office account. 65 As ultimately pleaded, however, the Law Society's allegation of wilful breach of s 61 was based only on the Solicitor's failure between 21 January and 27 June 2002 to repay the sum of $1,1216.13 into his trust account. 66 The particulars to Ground 1 included the following three paragraphs (the last of which was added pursuant to the amendment to the Information made towards the end of the hearing (see [3] above)):- 8. On 5 July 2000 the solicitor transferred $196.57 from his Trust Account to his office account. Such transfer was without the authority of Frank Shamoun. 9. On 20 September 2000 the solicitor transferred the balance then held namely $929.56 from his Trust Account. Such transfer was without the authority of Frank Shamoun. 19. Having regard to the matters referred to in paragraphs 8 and 9 the solicitor wilfully breached section 61 through failing to promptly take corrective steps to hold in trust the total sum of $1,126.13 in light of the following course of communications that ensued between the Society and the Solicitor prior to the transfer of that sum into his trust account on 27 June 2002 namely:- i. Society letters to Mr Grech on the following dates: 3 April 2002, 15 April 2002, 3 May 2002 and 24 June 2002. ii. Letters from Mr Grech to the Society dated 21 January 2002 and 18 April 2002. 67 The facts relevant to this Ground are those outlined above at [14 - 15, 28 - 37]. 68 The relevant provisions of s 61 are as follows:- 61 Money received by solicitor on behalf of another (1) A solicitor who, in the course of practising as a solicitor in this State, receives money on behalf of another person: (a) must pay the money, within the time prescribed by the regulations, into a general trust account in New South Wales at an approved financial institution and must hold the money in accordance with the regulations relating to trust money, or (b) if the person on whose behalf the money is received directs that it be paid or delivered to a third party free of the solicitor's control, must ensure that the money is paid or delivered: (i) before the end of the next working day or, if that is not practicable, as soon as practicable after the next working day, or (ii) no later than the day allowed by the solicitor's authority or instructions (if that day is later than the day allowed under subparagraph (i)), or (c) if the person on whose behalf the money is received directs that it be paid otherwise than into a general trust account or to a third party, must pay the money as directed and (if the money is to be held under the direct or indirect control of the solicitor) must hold the money in accordance with the regulations relating to controlled money. (2) In any of those three cases, the solicitor must hold the money exclusively for, and must disburse the money in accordance with the directions of, the person on whose behalf it is held. …. (8) It is professional misconduct for a solicitor to wilfully contravene subsection (1) or (2). 69 It was conceded by Mr Strasser, counsel for the Solicitor, that the transfers of funds on 5 July and 20 September 2000 each constituted a breach of s 61(2). 70 As we understood Mr Strasser's submissions, he did not seriously contend that the Solicitor's subsequent failure to repay these funds could not also constitute a breach of s 61(2). In any event, we are satisfied, taking account of the observations of the Court of Appeal in Johns v Law Society of New South Wales [1982] 2 NSWLR 1 on the predecessor to s 61 (s 42 of the Legal Practitioners Act 1898), that the obligation under s 61(2) to 'hold' money falling within s 61(1) 'exclusively for… the person on whose behalf it is held' is a continuing one. Between the dates (5 July and 20 September 2000) on which he made these two transfers of funds from his trust account into his office account and the date (27 June 2002) on which he repaid the total sum of $1,126.13 into his trust account, the Solicitor breached his statutory duty under s 61(2) to hold this sum exclusively for Mr Shamoun. 71 The crucial question, as both Mr Boyd and Mr Strasser acknowledged, was whether in the period commencing when the Solicitor became aware that the transfers should not have been made (i.e. on or shortly before 21 January 2002) and concluding when the repayment was made (i.e. 27 June 2002), he acted 'wilfully', within the meaning of s 61(8), in failing to ensure that the repayment took place. 72 It was common ground that the Solicitor did not intentionally delay in repaying this money. In addition, no challenge was made to his evidence that he instructed Ms Freeman to effect the transfer, or to her evidence that, having received this instruction, she inadvertently failed to carry it out. Nor was there any challenge to his claim that she was a very competent person and was held in high regard both inside and outside the office, having always in the past carried out his instructions. 73 It was also common ground, however, that according to established authority a breach of s 61(1) or (2) may be 'wilful', within the meaning of s 61(8), if it is attributable to reckless carelessness on the part of the solicitor concerned. In Re Hodgekiss [1962] SR (NSW) 340, Hardie J (as he then was) held to this effect with regard to the equivalent provision (s 43) of the Legal Practitioners Act 1898. At 354, he stated his conclusion on the matter as follows:- I am of opinion that the section deals with personal breaches of the statutory provisions in question on occasions when the solicitor knew or believed that he was committing such breaches or was recklessly careless in that regard. It is thus essential in an inquiry as to whether or not there have been wilful breaches by a solicitor of the provisions of ss.41 and 42 to examine the facts and circumstances relevant to his state of mind, knowledge and intention at the material dates. 74 Hardie J based his conclusions in part on two English cases, In re City Equitable Fire Insurance Co Ltd [1925] 1 Ch 407 and In re Vickery [1931] 1 Ch 572, which dealt respectively with the meaning of the phrase 'wilful neglect or default' in specific contexts within company law and trusts law. He quoted the following passage from the judgment of Pollock MR in the former case (at 517):- Wilful misconduct… means misconduct to which the will is party as contradistinguished from accident, and is far beyond any negligence, even gross or culpable negligence, and involves that a person wilfully misconducts himself who knows and appreciates that it is wrong conduct on his part in the existing circumstances to do, or to fail or omit to do (as the case may be), a particular thing, and yet intentionally does, or fails or omits to do it, or persists in the act, failure or omission regardless of consequences… or acts with reckless carelessness, not caring what the results of his carelessness may be. 75 These statements of principle by Hardie J were approved and applied by the Court of Appeal in Re Miles; Ex parte Law Society of New South Wales (1966) 84 WN (Pt 1) (NSW) 154 and Re Mayes and the Legal Practitioners Act [1974] 1 NSWLR 19. In both of these cases, the solicitor in question had failed over a period of years to supervise the operation of his trust account by his partner in the firm (in Mayes) or by clerks (in Miles), with the result that substantial amounts of clients' funds were misappropriated. Both solicitors were on notice of circumstances that should have impelled them to conduct inquiries into the way in which trust moneys were handled. They were both held to have committed professional misconduct by wilfully breaching s 43 of the Legal Practitioners Act 1898. 76 In Mayes, at 21, citing his own judgment in Re Hodgekiss, Hardie JA said: It is well settled law that there can be wilful failure within the meaning of the section without any positive intention to break the law; breaches committed over a period of time can, in the light of the relevant circumstances, be so substantial and reckless and show such complete indifference on the part of the solicitor to his important obligations to his clients and to the public, as to amount to wilful failure. 77 At 22, he said: It is true that the solicitor did have complete trust in his partner. However, in the special circumstances of this case, I am satisfied that the existence of that trust was accompanied by a complete indifference on the part of the solicitor as to the performance of his statutory obligations in relation to the trust account. The matters brought to his notice over a period of years were such that failure to inquire and ascertain what was happening in relation to the trust account was, under the circumstances, recklessly careless and properly found to constitute wilful failure within the meaning of the section. 78 In a short discussion of the question at 26-27, Reynolds and Hutley JA agreed that wilful misconduct could be established by evidence that a person acts with 'reckless carelessness, not caring what the results of his carelessness may be' and that this criterion was satisfied by the facts of the case before them. 79 In applying the principles stemming from Re Hodgekiss, the need to reach a conclusion as to a solicitor's 'state of mind, knowledge and intention' at the time when s 61 was breached was emphasised by this Tribunal in Law Society of New South Wales v Hill [2002] NSWADT 190 at [45] and Law Society of New South Wales v Lukas [2004] NSWADT 231 at [19]. 80 In the former case, the Tribunal's reason for rejecting an allegation of wilful breach of the section was that there was no evidence to assist it to reach such a conclusion. It added that the issue did not appear to have been put to the solicitor. It pointed out also at [45] that the requisite wilfulness 'may in many circumstances be apparent but it clearly cannot be simply implied on the basis that a provision of s 61 has been breached'. 81 In Law Society of New South Wales v Muir [2004] NSWADT 61, the respondent solicitor could have ascertained from monthly trial balance reports prepared by his book-keeper that the trust account ledgers for four of his clients were at different times in debit, contrary to s 61 of the Act. When he received these reports, he tended to put them aside in order to deal with them later. He did not discuss them with the book-keeper, nor did he realise that there was any irregularity requiring urgent attention. A trust account inspector ultimately visited his office and advised him about the debits. He still did nothing to rectify them until some five months had elapsed. 82 Applying the principles stated in Hodgekiss and Mayes (to which it referred at [10]) and taking account of the relevant onus and standard of proof (see [50]), the Tribunal held that the solicitor's contravention of s 61 was wilful during the period following, but not before, the visit of the inspector. It said, at [54], that following this visit he had 'actual knowledge' and 'strong encouragement' to take action, but that he 'showed complete indifference to his obligations'. At [40 - 44], it made a similar determination, on similar facts, with regard to his handling of the trust account of a fifth client. 83 In other cases applying these principles regarding allegedly 'wilful' behaviour by a legal practitioner in this or a similar context, the question raised has been whether the practitioner was 'recklessly careless' as to whether his conduct was or was not in breach of statutory requirements relating to legal practice or of fiduciary obligations to clients. Examples are Re Robb (1996) 134 FLR 294 and Law Society of New South Wales v Green [2001] NSWADT 142. 84 In this context, Mr Boyd drew attention to two aspects of the Solicitor's conduct in instructing Ms Freeman to make the relevant transfer of funds and omitting over a period of five months to check that she had done so. First, instead of giving these instructions, the Solicitor did not take the simple and obviously prudent step of obtaining the necessary cheque book and writing a cheque himself. Secondly, during the period of delay between January and June 2002 he received four letters relating to this very issue from the Law Society, dated respectively 3 April, 15 April, 3 May and 24 June, and himself wrote a letter dated 18 April. 85 As we see it, there are further reasons why this conduct of the Solicitor might well be said to display 'reckless carelessness' or 'reckless indifference'. These are (a) that he gave the instructions to Ms Freeman orally, not in writing; (b) that he made no diary note of them; (c) that the Law Society in its letters to him between January and June 2002 asked him to supply a copy of a document (i.e., the trust account ledger) that would have indicated to him straightaway that the transfer had not been made; (d) that the protracted earlier correspondence with the Law Society, dating back to May 2001, showed very clearly that this was, and was regarded by the Law Society as, a matter of considerable importance; and (e) he could very easily have checked whether the transfer had been made, either by inspecting the trust account ledger or asking Ms Freeman. 86 Mr Strasser openly conceded that the Solicitor's conduct was imprudent, but contended that it did not amount to wilfulness, as defined in the cases to which we have referred. He relied on the fact that there had been no challenge to the evidence of the Solicitor, or of Ms Freeman. He pointed out also that the relevant letters from the Law Society covered a period of less than three, not five, months (from early April to late June 2002) and that while they reminded the Solicitor of his promise to ensure that the transfer of funds took place, they said nothing to suggest that it had not in fact taken place. Mr Strasser also referred to the Solicitor's evidence of having provided care to his mother during the period preceding her death in June 2002. 87 We have found it particularly difficult to determine whether the Solicitor's conduct in relation to repayment of the amount of $1,126.13 to his trust account displayed wilfulness, in the sense of reckless carelessness or indifference. Given the importance of the matter, it was clearly most imprudent of him simply to give oral instructions, rely on an employee to carry them out and take no steps whatsoever by way of follow-up. Imprudence on this scale might well deserve to be labelled as 'reckless'. But we are mindful of two countervailing considerations of considerable importance. 88 The first is that, in the authorities from which we have quoted, the type of recklessness involved must be ascertained from the solicitor's 'state of mind, knowledge and intention at the material dates' (Re Hodgekiss [1962] SR (NSW) 340 at 354; see [73] above) and is 'far beyond any negligence, even gross or culpable negligence' (In re City Equitable Fire Insurance Co Ltd [1925] 1 Ch 407 at 517; see [74]). The second follows from the fact that a finding of recklessness here would lead to a finding of professional misconduct on the Solicitor's part. It is, as has been repeated many times in proceedings such as these, that we are bound to pay regard to 'the high standard of proof required in the case of a charge as serious as this' (to quote from the judgment of Owen J in Re Hodgekiss at 347) and to be 'comfortably satisfied' in accordance with the principles laid down in Briginshaw v Briginshaw (1938) 60 CLR 336 at 368 (see eg Law Society of New South Wales v Lukas [2004] NSWADT 231 at [20]). 89 We note also that, in contrast to the facts in Re Hodgekiss and Re Mayes and the Legal Practitioners Act [1974] 1 NSWLR 19, the present case is not one where the solicitor in question, being on notice that a trusted partner or employee might have failed to act in accordance with legitimate expectations, still failed to make the necessary inquiries. The facts in Law Society of New South Wales v Muir [2004] NSWADT 61 (see [81] above) bear some resemblance to those which we are now considering. But in that case, unlike the present, the solicitor who had been advised of trust account irregularities did nothing to rectify the situation. This was the basis of the Tribunal's finding that on account of showing 'complete indifference to his obligations' he was guilty of a wilful breach of s 61. 90 There was no evidence or cross-examination directly challenging the Solicitor's testimony that he held a positive belief that his action in instructing Ms Freeman was sufficient to rectify the breach of s 61. We cannot be 'comfortably satisfied', in the light of the foregoing authorities, that an inference that he nonetheless acted with 'reckless carelessness' or 'reckless indifference' should be drawn. For this reason, our conclusion, after careful consideration of what we perceive to be a very difficult issue, is that wilfulness has not been proved. In consequence, Ground 1 has not been made out. Ground 2: Knowing breach of Family Court orders 91 Ground 2 of the Information was that the Solicitor 'knowingly breached Orders of the Family Court dated 23 March 1999'. As ultimately pleaded, the 'knowing breach' relied upon was constituted by the same behaviour of the Solicitor as was claimed under Ground 1 to constitute wilful breach of s 61 of the Act. This was his failure between January and June 2002 to bring about the repayment of the sum of $1,126.13 that had been removed from his trust account by the transactions of 5 July and 20 September 2000, despite having become aware at some time in January 2002 that these two transactions infringed the orders of the Family Court made in the Shamoun matter. 92 For completeness, it should perhaps be added that the Solicitor did not realise until April 2003 that the earlier transaction of 29 June 1999, withdrawing $1,664.23 from his trust account, was also in breach of these orders. 93 The facts relevant to this Ground are those outlined above at [14 - 15, 28 - 37]. 94 The Ground alleges professional misconduct at common law. As confirmed in numerous cases (see for example Re Veron; Ex parte Law Society of New South Wales [1966] 84 WN (Pt 1) (NSW) 136 at 143; Council of the Law Society of New South Wales v Graham [2005] NSWCA 127 at [31]), common law professional misconduct by a legal practitioner is constituted by conduct 'which would be reasonably regarded as disgraceful or dishonourable' by fellow-practitioners who are 'of good repute and competency'. This is the Allinson test, derived from the judgments of Esher MR and Lopes LJ in Allinson v General Council of Medical Education and Registration [1894] 1 QB 750 at 761, 763. 95 We have no doubt that intentional conduct by a practitioner that he or she knows to constitute breach of a court order may well amount to 'disgraceful' or 'dishonourable' conduct in the eyes of reputable and competent fellow-practitioners. In fact, this is a distinctly probable outcome. 96 In view, however, of all the factual considerations that we have outlined in dealing with Ground 1, it cannot be said that during the relevant period from January to June 2002 the Solicitor knew that he remained in breach of the Family Court orders. He actually believed during this period that Ms Freeman had carried out his oral instructions to effect the repayment of $1,126.13, thereby rectifying his prior breach of the orders. His omission to check this was, as we have said, highly imprudent. But this imprudence does not warrant our characterising his continuing breach as a 'knowing' breach. 97 For these reasons, Ground 2 has not been made out. Ground 3: Misleading or attempting to mislead the Law Society 98 As ultimately pleaded, this Ground alleged that the Solicitor 'misled or attempted to mislead the Law Society' in his letter to the Society dated 18 April 2002. 99 The contents of this letter are outlined above at [33]. The statements on which the Law Society relied were to the effect that the transactions of 5 July and 20 September 2000, causing funds totalling $1,216.13 to be transferred from the Solicitor's trust account to his office account, constituted a 'one-off' or 'isolated' incident in so far as they were in breach of Family Court orders. 100 The Law Society pointed out that, as was clearly the case, these statements were false and misleading. They took no account of the fact that, in circumstances outlined above at [57], the withdrawal of $1,664.23 from the trust account on 29 June 1999 in order to pay costs owing to the Solicitor's firm was also in breach of the Family Court's orders. 101 The Solicitor did not, however, realise the impropriety of this earlier withdrawal until Mr Gulley drew his attention to it in April 2003. For this reason, Mr Boyd conceded that the misrepresentation in the letter of 18 April 2002 should be deemed innocent. He did not raise an allegation of carelessness. But he submitted that in all the circumstances the misrepresentation amounted to professional misconduct. 102 We cannot agree. A single misrepresentation of this nature to the Law Society, even if attributable to carelessness on the Solicitor's part in not ascertaining for himself whether the earlier withdrawal was compatible with the Family Court's orders, could not be labelled 'dishonourable' or 'disgraceful' so as to constitute professional misconduct at common law. 103 For these reasons, Ground 3 has not been made out. Ground 4: Failure to assist and co-operate with the Law Society's investigations 104 Ground 4 alleged that the Solicitor 'failed to assist and co-operate with the Society in its investigation of complaints'. 105 In this connection, the Law Society relied on eight specified aspects of the Solicitor's behaviour in his dealings with it. These were set out in a letter dated 1 November 2004 from the Society to Mr Gulley. 106 In the ensuing discussion of this part of the Information, the particular allegations by the Society are reformulated and placed in a more convenient order. We will deal with each of them in turn. 107 (a) Failing in the letter dated 7 August 2001 to address the issues raised by the Society in its letters dated 29 May and 25 July 2001. The relevant events in this context are outlined above at [17 - 24]. 108 The letter of 7 August 2001 from the Solicitor's firm to the Law Society was in fact written by Mr Vincent J Grech. It was, as Mr Strasser admitted, 'pretty scant'. It enclosed some of the documents requested by the Law Society in its two earlier letters, but did not provide any answers to the Society's questions. 109 In this instance, there was therefore a clear and unjustifiable failure by the Solicitor to assist and co-operate with the Law Society in its investigation of a complaint. Although the complaint was, at this stage, about the professional conduct of Mr Chesters, not of the Solicitor himself, the Solicitor was obliged to provide appropriate assistance. The fact that he delegated this responsibility to the firm's 'Practice Director', who was not a legal practitioner, and did not ask to see the letter that the Practice Director drafted before it was sent, heightens the seriousness of this failure on his part. 110 (b) Failing without explanation to forward to the Society the documents requested in its letters dated 29 May and 25 July 2001. The documents requested by the Society were these: (i) the Solicitor's firm's trust account ledger for Ms Shamoun, (ii) 'copies of memorandum' of costs and disbursements sent to her in her family law matter after 31 March 2000, (iii) all correspondence between his firm and Mr Shamoun following the making of the consent orders in April 1999, (iv) 'the family law settlement document' and (v) the name of the person who took over the matter within the firm following the departure of Mr Chesters. 111 As indicated above at [21], the only document sent in the reply of 7 August 2001 was a copy of the Family Court's consent orders (document (iv)). The trust account ledger (document (i)) was not sent until 1 July 2002, in circumstances more fully discussed below. The firm's file on Mr Shamoun (document (iii)) was not sent until 11 April 2003 (see [58] above). It seems that the Law Society was first advised as to who took over the Shamoun matter from Mr Chesters ('document' (v)) in the Solicitor's statutory declaration of 14 March 2003. 112 As to the request for 'copies of memorandum' of costs and disbursements sent to Ms Shamoun in her family law matter (document (ii)), there was evidence before us, chiefly taking the form of part of a letter dated 21 April 2005 from Mr Gulley to the Society, to the effect that at that stage, at any event, it was not possible to reproduce the relevant invoices from the firm's records. This did not necessarily show, however, that the relevant memorandum or memoranda of costs would not have been accessible when the Law Society's letters of 29 May 2001 and 25 July 2001 reached the firm. 113 In the outcome, only one of the five requested documents (document (iv)) was provided within a reasonable time after these two letters. No explanation was given for the Solicitor's failure with respect to the other four documents. 114 In later letters from the Law Society, as outlined below, the Solicitor was pressed particularly to supply the trust account ledger (document (i)). But less emphasis was placed on the remaining three. The Society did not repeat its specific request for the file on Mr Shamoun until its letter of 3 May 2002. It made this request again in its letter of 24 June 2002. The requests for any memorandum or memoranda of costs sent to Ms Shamoun and for the name of the person who took over the Shamoun matter from Mr Chesters were not repeated in the correspondence. 115 (c) Failing to advise the Society that the transfer of $1,664.23 on 29 June 1999 related to the Solicitor's costs on acting for Ms Shamoun in the family law proceedings, not to the costs of the conveyance of the former matrimonial home, as believed by the Society. This component of Ground 4 can be dealt with briefly. 116 As indicated above at [57], the Solicitor until April 2003 held the same belief on this matter as the Law Society. Mr Gulley's statement to this effect in his letter of 11 April 2003 to the Society was not challenged at the hearing. In the context of Ground 3 (see [101] above), the Law Society did not claim that the Solicitor was careless in maintaining this belief. 117 In these circumstances, we do not see how a broad allegation that the Solicitor 'failed to advise' the Law Society of the true position could be treated as an instance of failing to assist and co-operate with the Society's investigation of the complaints in this matter, 118 (d) Attempting to 'confuse the issue' by making a misleading statement in the letter of 18 April 2002 to the Society. The statement in question was as follows:- We were unable to obtain instructions from our client and we were unable to comply with the Orders... I note that you have now requested our client to give us an appropriate instruction… 119 The Law Society claimed that this statement constituted an attempt to 'confuse the issue' because in its letter of 3 April 2002 it had made it quite clear to the Solicitor that an authority was being sought from Mr Shamoun, not from the Solicitor's former client Ms Shamoun. 120 Again, we can deal briefly with this component of the Society's case. It does appear from other letters written by the Solicitor during 2002 (see [37, 39] above) that he then believed, mistakenly, that Mr Shamoun had never been a client of his firm. By the words 'our client' in his letter of 18 April 2002, he must therefore be presumed to have meant to refer to Ms Shamoun. This is how the Law Society interpreted the letter. 121 But the Society's allegation of an 'attempt to confuse' is based on an assertion regarding its own letter of 3 April 2002 that we cannot accept. The letter did not in fact refer to any sort of authority at all. Enclosed with it was a copy of a letter from the Society to Mr Shamoun which was not put into evidence. The factual basis of the Society's allegation has accordingly not been established. 122 A further reason for rejecting this part of the Law Society's case is that its allegation requires proof that the Solicitor consciously, or perhaps recklessly, attempted to confuse matters. No evidence was led to establish this and it cannot be inferred merely from the correspondence. At most, the Solicitor may have been careless in making this statement. 123 (e) Failing to enclose the trust ledger for Ms Shamoun in the letter of 18 April 2002. The circumstances relating to this matter are outlined above at [34]. 124 The statutory declaration of Ms Cole, as there summarised, provides an explanation for this failure on the Solicitor's part. Her account of the matter was not challenged. Given the importance of this correspondence with the Law Society, it was imprudent of the Solicitor not to check for himself that the ledger was enclosed. But since his letter expressed an intention that the ledger be enclosed and he trusted Ms Cole to put this intention into effect, we cannot treat his conduct as constituting a failure to co-operate with the investigation. 125 (f) Failing to send the trust ledger to the Society until 1 July 2002, despite requests to do so on 3 May and 24 June 2002. The circumstances relating to this matter are outlined above at [35 - 37]. 126 This further failure on the Solicitor's part cannot be explained or justified as an error on the part of Ms Cole or anyone else employed by the Solicitor. Mr Strasser effectively conceded this. He acknowledged that the Solicitor handled this correspondence in a 'dilatory' way, but reminded us that it was during this period (May - June 2002) that the Solicitor's mother died. 127 While making due allowance for the Solicitor's undoubted distress during this period, we are bound to find that he was guilty of failing, over a period of nearly two months following receipt of the letter of 3 May 2002, to assist and co-operate with the Law Society in its investigations. He did so even though he knew that an earlier request for the trust ledger had not been complied with, due to an error by Ms Cole. This failure was significant, in terms of its effect on these investigations, and was not open to justification on any reasonable ground. 128 (g) Indicating in the statutory declaration of 21 January 2002 that he had arranged for the sum of $1,126.13 to be deposited back to the trust account, whereas this was not done until 27 June 2002. This conduct by the Solicitor forms the basis for Grounds 1 and 2 of the Information and has already been discussed in those contexts. 129 We do not see how by acting in this way the Solicitor can be said to have 'failed to assist and co-operate with the Law Society in its investigation of complaints'. Irrespective of whether the repayment occurred in January 2002, when it should have done, or at some later time, the Law Society's capacity to carry out its investigations remained the same. 130 (h) Failing until 14 March 2003 to send a statutory declaration to the Society, despite requests dated 22 November 2002, 23 December 2002, 29 January 2003 and 4 March 2003. The circumstances relating to this final component of Ground 4 are outlined above at [40 - 54]. 131 As this outline shows, some of the Law Society's letters to the Solicitor between November 2002 and March 2003 related to Mr Shamoun's complaint, whilst others related to the complaint that the Society itself made on 12 December 2002. Each of the letters bore a heading indicating which of the two complaints was involved. 132 By contrast, the Solicitor's letters during this period were all headed 'Complaint by Farouk Shamoun' or 'Farouk Shamoun' and did not expressly indicate which complaint was being addressed. But the content of all but the last of these letters and their accompanying documents - that is, the letters of 19 December 2002, 24 January 2003 and 28 February 2003 - showed clearly that he was primarily concerned to respond to the allegations in the Law Society's complaint. Only in his letter of 14 March 2003, which followed a threat by the Law Society to issue a s 152 Notice, did the Solicitor deal with the questions that were put to him in the letter of 22 November 2002 under the heading 'Complaint by Farouk Shamoun'. 133 In this letter of 14 March 2003, the Solicitor actually stated that 'we', meaning apparently his firm, had been 'under a misunderstanding' that the Society did not require an answer to the letter of 22 November 2002. The Society had however made it quite evident, notably in its letter of 23 December 2002, that it was investigating the Shamoun complaint alongside its own complaint and required answers relating to both complaints. This statement by the Solicitor displayed a clear unwillingness to give careful attention to what was required of him so far as the former complaint was concerned. 134 The time taken by the Solicitor to answer the questions asked in the letter of 22 November 2002 was nearly four months. Some allowance must be made for the fact that the Christmas holidays formed part of this period. But in the light of our finding as to the attitude that he adopted to questions concerning the Shamoun complaint, we are bound to hold that he was guilty of failing, over a period of nearly four months, to assist and co-operate with the Law Society in its investigations. This failure was significant, in terms of its effect on these investigations, and was not open to justification on any reasonable ground. 135 Our conclusions on Ground 4. We have found significant and unjustifiable failures by the Solicitor to assist and co-operate with the Law Society in three of the above instances, namely (a), (f) and (h). 136 To summarise these instances, the Solicitor acted as follows. First, he allowed a totally inadequate reply to be given to a letter from the Law Society through delegating to a non-lawyer the task of preparing the reply and then not checking its contents. Secondly, he unjustifiably delayed for nearly two months in sending an important document to the Society, despite being made aware that an earlier request for it had not been complied with, due to an error by his secretary. Thirdly, he unjustifiably delayed for nearly four months in sending a statutory declaration answering a number of questions put to him by the Society. 137 We have also found a failure of rather less seriousness in one further instance, namely (b). This involved failures over varying periods to provide documents. We say that this was less serious because (putting to one side the trust ledger involved in (f)) the Law Society did not subsequently press the matter, except as regards one further document. 138 Mr Boyd submitted that, taken cumulatively, the various instances of failure by the Solicitor to assist and co-operate amounted to professional misconduct at common law. He drew our attention to three authorities bearing on the duty of legal practitioners to co-operate with official investigations. 139 First, he referred to the following passage in the judgment of Clarke JA in Malfanti v Legal Profession Disciplinary Tribunal [1993] 1 LPDR 17 at 19:- The Tribunal is bound to mould its procedures to enable it efficiently and effectively to carry out its functions in an expeditious manner. In making these comments I have not overlooked the principle that a solicitor who appears before the Tribunal is bound to assist it in its investigations. (See Johns v Law Society of New South Wales [1982] 2 NSWLR 1, per Moffitt P at 6). 140 Secondly, Mr Boyd cited various paragraphs in the decision of the Court of Appeal of Queensland in Council of the Queensland Law Society Inc v Whitman [2003] QCA 438. It appears to us, however, that most of these paragraphs deal with the duty of legal practitioners not to mislead official bodies such as the Law Society or, as it is sometimes called, their duty of candour. Only in paragraph [36] is the practitioner's duty of co-operation raised, and here the topic discussed is co-operation with a tribunal (such as this Tribunal) in the hearing of a disciplinary matter, not co-operation with an investigating authority. 141 The third case that Mr Boyd cited was Law Society of New South Wales v Jayawardena [2005] NSWADT 96. Here, as he said, the Tribunal, at [57 -58], made a finding of professional misconduct at common law based on its conclusion that the respondent solicitor had failed to assist and co-operate with the Law Society in its investigation of complaints. But it did not discuss the legal issues raised; indeed, it did not refer at all to the common law criterion of professional misconduct. Its approach in this regard was understandable because it also found professional misconduct on the grounds of practising without an appropriate practising certificate, attempting to mislead the Law Society and failure to comply with a s 152 Notice. 142 In response, Mr Strasser emphasised, in this context as in others, that we could not make a finding of common law misconduct unless we were 'comfortably satisfied' that the Solicitor's behaviour could reasonably be regarded as 'disgraceful or dishonourable' by reputable and competent legal practitioners. 143 We agree with Mr Boyd that a legal practitioner's professional duties include rendering appropriate assistance to any official investigation of possible wrongdoing. In addition to the authorities that he cited, we refer to the following passage in the judgment of Smart J in Veghelyi v Council of the Law Society of New South Wales, unreported, Supreme Court of New South Wales, 6 September 1989:- It is important that solicitors respond promptly to the [Law] Society when it asks for a response to complaints which have been made. It will be an unusual and complex case when a delay of more than 14 days is acceptable and often the reply should be delivered within a shorter period such as 7-10 days. Replies to the Law Society in respect of complaints warrant a high priority. Such replies should be full and complete and deal directly with the complaints made. 144 His Honour was not, however, dealing with the issue now facing us, namely, the circumstances in which one or more failures to assist and co-operate with an official investigation will amount to professional misconduct. The context of his remarks was that of an application by a solicitor, in the course of an appeal against the cancellation of his practising certificate, for an interim order staying the cancellation. 145 A very recent decision of the Tribunal, Law Society of New South Wales v Knudsen [2006] NSWADT 49, involved a solicitor's failure over nearly seven months to provide to the Law Society a response to a complaint, coupled with his failure over nine months to provide documents required in this connection by the Society. About two months after the Society's initial letter requiring this response and these documents, the Society issued a notice under s 152(1) (a) and (b) of the Act. It related to the same matter and called for the same documents, but required a more detailed response. 146 The Tribunal held that these failures by the solicitor to assist the Law Society, while deserving of censure, were not 'disgraceful' or 'dishonourable' so as to amount to professional misconduct at common law. Under a separate ground of the Information, however, it held that the solicitor had committed professional misconduct under s 152(4) of the Act by failing without reasonable excuse to comply with the requirements of the notice. 147 Section 152(1) of the Act provides that, for the purpose of investigating a complaint, the Council of the Law Society or the Bar Association, or the Legal Services Commissioner may, by notice in writing served on a legal practitioner, require him or her to do any one or more of the following: (a) to provide written information, by a date specified in the notice, and to verify the information by statutory declaration, (b) to produce, at a time and place specified in the notice, any document (or a copy of a document) specified in the notice. 148 Section 152(1)(c) empowers the same bodies to serve a notice requiring a legal practitioner to 'otherwise assist in, or cooperate with, the investigation of' a complaint 'in a specified manner'. 149 In explaining its rulings, the Tribunal in Knudsen indicated at [63] its disagreement with any proposition to the effect that 'in any case where a serious breach, without reasonable excuse, of s 152(1)(a) or (b) is found to have occurred, constituting statutory misconduct under s 152(4), a finding of common law misconduct should also be made, on the ground of failure to assist the relevant authority in its investigation of the relevant complaint'. 150 The Tribunal pointed out at [64] that if professional misconduct is to be established against a legal practitioner under s 152(1)(a), (b) or (c) coupled with s 152(4), a formal notice must have been served. This, it said, will 'draw the practitioner's attention to the fact that non-compliance without reasonable excuse will amount to professional misconduct'. 151 The Tribunal then said at [65]:- We do not think that the existence of s 152(1)(c) and s 152(4) renders it impossible for a practitioner to be found guilty of professional misconduct at common law on account of failure to assist in the investigation of a complaint. But in view of this component (replicated in the Legal Profession Act 2004) of the statutory regime governing professional misconduct, we believe that the Tribunal should not make a finding of common law misconduct unless the well-established criterion of 'dishonourable' or 'disgraceful' behaviour is clearly satisfied. 152 Returning to Ground 4 in the present case, we must say, as we did with regard to Ground 1, that we have found the issue facing us to be particularly difficult to determine. 153 Our conclusion, taking all the foregoing considerations into account, is as follows. We cannot be 'comfortably satisfied' that the conduct of the Solicitor that has been alleged and proved under Ground 4 is of sufficient seriousness to warrant the label 'disgraceful' or 'dishonourable'. We say this while recognising that he violated his professional duty of co-operation with the Law Society more than once, generally in circumstances where little could be advanced in his favour by way of justification. Had the formal procedures established in s 152 been employed by the Law Society, his foolish conduct by way of response, if unchanged, would have exposed him more than once to a finding of misconduct under s 152(4). But this, as the Tribunal held in Knudsen, is not enough of itself to warrant a finding of misconduct at common law. 154 For these reasons, Ground 4 has not been made out. Ground 5: Delay in repaying funds to the firm's trust account 155 Ground 5 of the Information states as follows:- [The Solicitor] delayed in repaying to his trust account the sum of $1,216.13 improperly drawn from the trust account by an initial withdrawal on 5 July 2000 ($196.57) and a subsequent withdrawal on 20 September 2000 ($929.56). 156 This Ground alleges professional misconduct at common law arising from the conduct of the Solicitor that formed the basis for Ground 1. The element of culpability to be proved, however, is that of behaving disgracefully or dishonourably, not 'wilfully'. 157 In view of all the factual considerations that we have outlined in dealing with Ground 1, we cannot be 'comfortably satisfied' that the Solicitor, in failing over five months to check whether Ms Freeman had carried out his oral instructions to effect the repayment, acted in a manner that would be 'reasonably regarded as disgraceful or dishonourable' by legal practitioners 'of good repute and competency'. It was highly imprudent of him to do so, but it was not, in our view, 'disgraceful or dishonourable'. 158 For this reason, Ground 5 has not been made out. Concluding observations 159 Mr Boyd argued that while the matters established in relation to each of the four grounds alleging professional misconduct at common law - i.e., Grounds 2 to 5 - might not actually amount to such misconduct if considered individually, we could and should consider them 'in their totality'. Viewed in this way, he submitted, they would provide a sound basis for a finding of common law misconduct. 160 We have already adopted this approach of viewing a number of separate matters 'in their totality' when dealing with Ground 4. We are not sure, however, whether we can do the same with regard to separate and distinct grounds alleging different kinds of breach of professional duty, the more so when the facts alleged to constitute one or more of the grounds have not been made out. 161 To illustrate this point, we will consider two of the four grounds to which Mr Boyd referred. Ground 2 alleged the knowing breach of a court order. We have found that the Solicitor, through imprudence, committed a continuing breach of a court order, but not that it was 'knowing'. With respect to Ground 3, we have found that, as Mr Boyd conceded, the Solicitor's misrepresentation to the Law Society was innocent. It therefore did not fall within the scope of the Law Society's claim that he 'attempted to mislead' the Society and it only technically fell within its allegation that he 'misled' the Society. Most significantly, Ground 2 is concerned with the duty of practitioners to the court, whereas Ground 3 is concerned with their duty to their professional association, in its capacity as an investigating body. 162 In the absence of any authority to guide us on this matter, we cannot follow Mr Boyd's suggested path of bringing together separate and limited findings of breaches of different kinds of professional duty in order to arrive at a single finding of professional misconduct. 163 Mr Boyd indicated that the Law Society did not seek a finding of unsatisfactory professional conduct in relation to any of the matters alleged. In such circumstances, it is not open for us to make any such finding of our own accord: see Council of the Law Society of New South Wales v Graham [2005] NSWCA 127 at [33]. 164 More than once during the hearing and in earlier correspondence, the Solicitor or those representing him conceded that the circumstances giving rise to these proceedings demonstrated significant defects in the procedures adopted in his firm. We can only hope that distinctly more satisfactory procedures are now being followed. 165 For the foregoing reasons, we find that professional misconduct on the part of the Solicitor has not been established. 166 The Information must be dismissed.

Law Society of New South Wales v Grech

At a glance

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Judgment (9 paragraphs)

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Cases Cited (3)

Cited By (1)