Law Society of New South Wales v Scanlan

THE FACTS PROVED

Before August 2009 Mr. & Mrs McPeake retained Newport Law ,solicitors, to act for them as vendors for sale of their former matrimonial home. On or before 15 August 2009 the respondent was retained by Mrs McPeake [nee Dadic] to act for her in a Family Law matters relating to children and property against Mr McPeake.
Mr McPeake retained Shipton and Associates, solicitors, to represent him in Family Law Proceedings.
On 10 August 2009 Mrs McPeake wrote to the solicitor: - "I authorise you to invest the $229,000.00 proceeds from the sale of [the former matrimonial home] into a high interest bearing account rather than holding money in a non-interest bearing Trust Account. You may do this with my authorisation as long as there is no risk to the principal amount. Please provide statements of the interest earned."
On or about 21 August 2009 Mrs McPeake attended on settlement of the sale and collected two cheques representing the nett proceeds of the sale, being: - 1. cheque for $57,215.34 made to payable to Mr & Mrs McPeake 2. St George cheque payable to Mr and Mrs McPeake for $229,929.19.
By agreement between Mr & Mrs McPeake they divided the funds of $57,215.34 equally between them.
On Thursday 27 August 2009 at 1:07 pm Mr McPeake instructed the respondent in writing to: - "secure the St George Bank cheque number 15896414 for $229,929.19 in a secure interest bearing Trust Account in your Trust until such time as property settlement is reached between Linda and myself - no funds are to be released from this account until such settlement is agreed upon by both parties."
On 29 August 2009 the McPeake's trust money was credited to the law practice Trust Account to the Trust Ledger of Mrs McPeake Matter No 01280809 "Family Court Children and Property Matter".
The respondent failed to place the McPeakes' trust money into a Controlled Money Account. That was a breach of subsection 256(1) of the Act.
By letters from Shipton and Associates to the respondent on 12 September 2011, 2 March 2012, 26 March 2012, 4 June 2012 and 7 June 2012, Mr McPeake requested copies of statements of the Controlled Money Account, but the respondent provided no such statement in response to those requests. That was a breach by the respondent of the requirements of subsection 255(3) of the Act and paragraphs 82((6)(b) and (c) of the Legal Profession Regulation 2005.
The only authorities and directions given by Mr & Mrs McPeake in relation to the $229,929.19 and the interest thereon was for the initial sum to be placed in the an interest bearing controlled money trust account.
On 2 May 2010 the remainder of the Mc Peake trust money in the Family Law Trust Ledger was only $171,749.19. By then the respondent had misappropriated $58,160.00 by making unauthorised payments that were described in the Trust Ledger as follows: - 1. 24 February 2010 transfer to De Stress Express - file #1331009 Trust A/C - $19,331.95 2. 4 March 2010 Scanlan Lawyers for payment of inv. 227 - $5,668.05 3. 22 March 2010 Scanlan Lawyers for payment of inv. 227 - 2,000.00 4. 1 April 2010 transfer to De Stress Express - file #1431009Trust A/C - $8,510.70 5. 6 April 2010 Scanlan Lawyers for payment of inv. 232 -$14, 258.39 6. 23 April 2010 Scanlan Lawyers for payment of inv. 227 - 2,450.91 7. 2 May 2010 transfer to De Stress Express - file #1431009 Trust A/C - $5,940.00
The withdrawal of funds from the amount of $229,929.19 not only constituted misappropriation. It also offended various provisions in Section 255 of the Act. It offended the requirements of s 255(1)(a) because it was, according to the trust ledger, held solely for Mrs McPeake instead of for both the McPeake's. It also offended the requirements of s 255(1)(b) because the withdrawals were not authorised by Mr and Mrs McPeake.
The respondent's conduct also created a deficiency of $58,160.00 of the trust funds of $229,929.19 held on behalf of Mr and Mrs McPeake. That was an offence against the prohibition in subsection 262(1)(a) of the Act.
On 13 October 2010 the respondent opened the controlled money account and deposited to it $171,769.19, which was the amount remaining from the Trust Money of the amount of $229,929.19 received in Trust for Mr & Mrs McPeake.
The solicitor prepared written authorisations for each of the authorised payments from the Trust money in the period 24 February 2010 to 2 May 2010 inclusive and forged the signature of Mrs McPeake on each of those.
After the establishment of the Controlled Money Account with the $171,769.19, the respondent between 13 October 2010 and June 2012 failed to provide Mrs McPeake bank statements for the Controlled Money Account.
She also did not provide Mrs McPeake with Trust Ledger Statements in relation to her Family Law matter.
One effect of the solicitor's failure to account in respect of the trust money was that Mr & Mrs McPeake remained unaware until June 2012 of anomalies in the Trust Ledger and that a sum $58,160.00 less than entrusted money was deposited into the Controlled Money Account on 13 October 2010, and (in the case of Mr McPeake) that trust money was not placed in a Controlled Money Account until some 13 months after he directed that they be so.
In the Family Law Matter, the respondent rendered invoices to Mrs McPeake in October 2010, December 2011 and July 2012 and Mrs McPeake paid those with her own funds without authorising transfers from the Trust money. Tracing from withdrawals made from the trust account on various dates between 1 March 2010 and 11 June 2010 (inclusive) records that $2,000.00 of the money was paid to a Dr Sin, the respondent's dentis,t and the remaining $56,160.00 was paid to the office account of the respondents practice. At the time of such deposits to the office account, the account was already overdrawn on three occasions, and on the other occasions had balances of less than $200.00 (two occasions), less than $3,000.00, and less than $7,500.00.
At all material times, neither Mrs McPeake nor her business De Stress Express had any assets by way of unpaid monies owed by debtors. Neither Mrs McPeake nor De Stress Express retained respondents' practice for debt recovery. The respondent however, created files purporting to be for debt recovery for Mrs McPeake trading as De Stress Express, One was purportedly against Ms Karman and the other against a company National Diagnostic Products (Australia) Pty. Ltd. ("NDP"). The respondent created bogus ledger accounts purporting to be for debt recovery actions on behalf of Linda McPeake (trading as De Stress Express) against each of Karman and NDP.
The Karman trust ledger showed the deposit on 1 March 2010 of $20,000.00 purported to be paid by Mrs McPeake. It corresponds roughly with $19,331.95 withdrawn from Mr & Mrs McPeake's Trust Funds on 24 February 2010.
The same Ledger Account then showed payments on 1 March 2010 and 4 March 2010 to a total of $19,331.95 purportedly for payment of two invoices for work done in relation to the debt recovery action against Ms Karman.
The respondent also created a Trust Ledger for the fictitious debt recovery action by Mrs McPeake against NDP. That shows receipt of transfers of $8,510.70 and $5,900.40 of the Trust monies on 1 April 2010 and 2 May 2010 respectively. The debits to the account were for transfers in payment of invoices in the NDP matter as follows; - 1. 6 April 2010 - invoice 223 - $5,741.61 2. 23 April 2010 - invoice 223 - $2,549.09 3. 17 May 2010 - invoices 223 and 235 - $5,305.39 Total: $13,596.09
There were no instructions from Mrs McPeake to recover any debts and the Trust Ledgers were fictitious. The respondent also created fictitious supporting documents including receipts, file notes, correspondence and files in respect of each of the fictitious matters
The respondent also falsely constructed the Trust Ledger for the Family Law matter (which was the Trust Account to which the $229, 929.19 trust money was credited). She did this knowing that the funds belonged to both Mr McPeake and Mrs McPeake. The Trust Ledger showed that the funds belonged to Mrs McPeake only. She falsely constructed the Family Law Trust Ledger to accommodate unauthorised transfers of money to the Karman matter and the NDP matter and then to the Law Practice account for payment of fictitious bills for purported costs and disbursements in those matters. She did it also to facilitate unauthorised transfers of monies to the Law Practice for bogus bills for costs and disbursements in the Family Law matter.
The solicitor's falsification of the Trust Ledger had the effect of concealing from the Trust Account Inspector, Mr Anthony Fairbairn, unauthorised withdrawals from the Trust Account totalling $58,160.00.
During the period 13 April 2011 to 30 March 2012 the solicitor caused a total of $70,500.00 to be deposited into the Controlled Money Account in attempt to replace misappropriated funds and compensate the McPeakes for interest they would have received had the trust money been deposited to an interest bearing controlled monies account when she received it. The dates and source of these deposits are set out in paragraph 35 of the second Application and substantiated by documents in the bundle provided by the Law Society.
$40.000.00 of those funds came by way of cheques of $20,000.00 each, drawn by Michelle Riedl, the wife of a client of the solicitor. $8,000.00 came from a source unknown, $5,000.00 was a cash deposit by a person unknown, $8,000.00 came from an account in the name of the solicitor and $9,500.00 came from the cheque of the solicitor.
Extensive documents, including trust ledger documents, two bogus files, file notes, statements by the client, notes of telephone calls, purported copies of letters of demand, purported records of the attending at the "Karman Factory", and purported records of attending mediation with the client, were forged. In the NDP file there was a forged cost agreement, forged file notes, forged letter of demand, forged draft statement of claim, forged notes of phone call conversations, a forged bill and a forged authority for payment from Trust Funds.
There were also forged documents in the Family Law file to support the bogus bills used to justify taking funds from the trust money.
When Mr Fairbairn carried out his investigation in June 2012 the solicitor purported that De Stress Express had two debt recovery matters (one against Ms Karman and the other against NDP), that Mrs McPeake had authorised all of the transfers out of the Family Law Matter Trust Ledger to fund the debt recovery matters and to pay her Family Law matter invoices.
When Mr Fairbairn asked the respondent to provide the original authorities, she told him that the originals are with Mrs McPeake and she produced the photocopies.
She falsely represented to Mr Fairbairn that she did not know who deposited the monies to the Controlled Money Account (other than $71,769.19) and that she assumed that was Mrs McPeake.
Via email dated 17 July 2012 the solicitor told Mr Fairbairn: - "Linda banked the money [into the controlled money account] and I made out the receipt when it showed up in the bank statements. I haven't asked her where she got the money, but if I did, I think she would tell me that it is from the money I recovered for her in her two debt recovery matters. I suggested that she should put the money back that she authorised me to take to pay my fees …"
Mr Fairbairn then asked her via email on 21 August 2012: - "Who actually repaid the $70,500.00 into the Controlled Money Account, and have you a copy of the deposit records that I can have a copy of?"
The solicitor responded in the letter dated 27 August 2012 that she had reminded Mrs McPeake that she should replace the money she taken to pay the respondent's invoices and thereafter Mrs McPeake made the decisions about investment "and she refunded the Controlled Money Account and I wrote the receipts when it came into my account…"
The respondent told Mr Fairbairn in her letter of 27 August 2012 that she did not act on the authority to open the Controlled Money Account because she neglected to. She denied that it was a conscious decision. She said: - "I say that because at the time I was having difficulty getting my Cost Agreement signed and returned and I was reluctant to do anything until I had received it, consequently when [Mrs McPeake] gave me the second cheque for $229,929.19 I banked it in the Trust and did nothing further in anticipation of getting my signed Cost Agreement... I note that I eventually received my signed Cost Agreement in March 2010.. "
When Mr Fairbairn asked in an email of 28 August 2012 that the respondent verify the source of the deposits totalling $70,500.00 into the Controlled Money Account by a deposit book or the like, the solicitor falsely told him that she had "no idea where Linda got the money from to repay what she authorised me to withdraw. I've not asked her, but I will if you want me to"
Mr Fairbairn attended upon the respondent's office and asked the solicitor if she knew any person by the name of Michelle Riedl and whether she conducted any matters on her behalf. The respondent falsely replied "No" to both questions. When asked whether she had paid any of her own money into the Controlled Money Account? She falsely answered "No". When asked by Mr Fairbairn: - "I have a copy of the cheque number 941 drawn on 21 June 20111 from your office account. Can you explain to me why you had banked this money to [Controlled Money Account]?" The Respondent falsely replied that she had no explanation as to why that had happened.
In the Respondent's letter of the 15 October 2012 to Mr Fairbairn the respondent said that although it appeared the authorities have been "cut and pasted" she had nothing to do with those alterations and to the best of her knowledge it was the signature of Mrs McPeake. She said "I had put $9,500.00 into the Controlled Money Account from her office account with no explanation after having previously told the inspector that I had not put any money into the account. She falsely said "apart from the above transaction I have no knowledge as to the source of the balance of the deposits banked to the Controlled Money Account." She also falsely said "I do not know Michelle Riedl"
In her letter of 11 December 2012 the solicitor falsely represented to Mr Fairbairn " I probably banked two more cheques to the Controlled Money Account from Michelle Riedl …I banked this money to the Controlled Money Account in exchange for cash received from [Mrs McPeake] over period about one month. The cheques were paid to me from Richard Williams for work done on invoice dated 11 April 2011."
The fraudulent misrepresentations to Mr Fairbairn included records for client matter numbers and the Trust Account records relating to De Stress Express and purported claims against Karman and NDP, false entries to the Trust Account cash payments book, false trial balances, forged copies of correspondence between the respondent and Ms Karman and between the respondent and NDP, and false statements by the purported client.
The Tribunal finds on the evidence that other areas in which the respondent sought to mislead Mr Fairbairn were as follows: - 1. Mrs McPeake did not pay the respondent in cash. She paid the invoices by cheque or EFT, [except perhaps the invoice 1 April 2009 for $220.00]; 2. The respondent knew who deposited the money into the Controlled Money Account and the solicitor knew that it was not Mrs McPeake; 3. The respondent knew that she or under her direction Richard Williams or Michelle Riedl deposited into the Controlled Money Account $20,000.00 on each of 13 and 15 April 2011 4. The respondent herself had made at least two deposits to the Controlled Money Account by the office account cheque number 941 for $9,500.00 on 21 July 2011 and $8,000.00 transferred from the account in the name of MJ Scanlan numbered 038409274. 5. The Respondent purported in practice records that a payment was to Dr Andrew Sim and he was her dentist, but Dr Andrew Sim is not a registered dentist in Australia. 6. The evidence conclusively establishes that the respondent attempted to mislead Mr Fairbairn on a grand scale.
Indeed the solicitor did mislead Mr Fairbairn: 1. In the email 21 August 2012 to the respondent he demonstrated that he accepted that the respondent acted for the De Stress Express recovery actions and said "$58,160.00 was deducted from the Trust Ledger in the name of Linda McPeake (#0128089) to pay various costs and disbursements due to you ….. " 2. It is recorded by Claire Nielsen who was acting for Mr McPeake, that Mr Fairbairn told her in a telephone conversation on 16 July 2012 "Investigating matter re: McPeake monies. Wanted us to know none of it had gone missing. The solicitor allowed the wife to remove some of the money to run her business and then it was put back in it, all accounted for though …."
As a result of the respondent misleading Mr Fairbairn, his findings in his report failed to disclose the true nature of the solicitor's dealing with the McPeake trust money.
The respondent attempted to mislead Ms Lai, the Law Society Chapter 4 Complaints Investigator in the following ways: - 1. By her letter of 15 February 2013 stating "I did not think of the money again and the authorities even when I received my signed cost agreement on 9/3/2010." 2. When she represented in her letter of 18 March 2013 that Mrs McPeake was present when the deposits were made (except for the two deposits of $20,000.00 each) "but she knew about those deposits because she had given me the cash in exchange for those deposits"; Annexed hereto and marked "D" are copies of letters that I sent to [Mrs McPeake] in relation to the subject cash payments" 3. By sending to the Law Society a copy of bogus letters to Mrs McPeake dated 2 April 2011, 3 August 2011 to show that Mrs McPeake had paid the respondent in cash. 4. By the letter dated 3 April 2013 attaching a bogus letter (Annexure F), therefore representing to Ms Lai that Mrs McPeake had made two deposits each of $20,000.00 into the Controlled Money Account. 5. By denying in her letter of 8 May 2013 to the Law Society that she deliberately did not bank the trust money to a Controlled Money Account so she could steal small amounts periodically for no apparent reason amounting to the sum of about $53,000.00. 6. By returning the stolen money to the account in bits and pieces as well as an extra nearly $11,000.00 over and above the alleged stolen money for no apparent reason.
By various conduct she did mislead Ms Lai: 1. Created about 100 false documents to achieve all of the above. 2. Falsely stated in her letter of the 20 May 2013: "my only breach is that I forgot to transfer the sale proceeds of Ms Dadic's [Mrs McPeake's] property from the Trust Account to the Controlled Money Account in accordance with the authorities… " "I had no reason nor did I steal about $53,000.00 from (Mrs McPeake's) Trust Account without her authority …" 1. Stating in her letter 14 June 2013 1. "As far as section 255 is concerned, I deny that I have breached that section. I submit that whilst the money was deposited in the Trust Account I dealt with it in accordance with that Section. I say that because: 1. There is no evidence to the contrary, 2. [Mrs McPeake] did not tell me that the money belonged to her 3. I may add there is no evidence and/or expert evidence that I fraudulently created any documents…" 1. By stating in her letter dated 10 July 2013 to Ms Lai: 1. "255 is all about trust money not controlled money. I again deny that I incorrectly dealt with the money whist it was deposited in the trust money". 2. "Section 264, is, is all about trust money, not controlled money. I say again, Mr & Mrs McPeake did not give me any directions about trust money, therefore I had no trust authorities to deal with, correctly or incorrectly." 3. "I repeat the money was never meant to be trust money. I turned it into trust money by depositing it incorrectly in a trust account. However, whilst the money was deposited in the trust account, I did all that was required of me in accordance with the regulations, by : …… providing [Mrs McPeake] with the required documents to support her authorised withdrawals out of the account." 4. "In relation to the disputed authorities, I say again, there is no evidence either lay or expert evidence (sic) that I "cut and pasted" the authorities that the inspector believed were cut and pasted. I further say (1) that no expert will find that I signed the authorities, cut and pasted or not, and (2) I say again that I had no reason to create fraudulent authorities."
The respondent mislead Ms Lai in the following ways: - 1. indirectly Ms Lai adopted the conclusions of the report of Mr Fairbairn, including the conclusion that the Karman and NDP matters were real; 2. Representations in the respondent's letter of 15 February 29013 mislead Ms Lai into believing that the whole of the Trust Fund of $229, 929.19 deposited to the Trust Account in August 2009 had been transferred to the St George Bank Controlled Money Account on 2 October 2010 and the solicitor had deposited $9,500.00 to the Controlled Money Account as compensation to the clients for a loss of interest.
The evidence establishes that because Ms Lai was misled, erroneous findings were then put before the Professional Conduct Committee and that resulted in only relatively minor complaints as the subject of the first application. Because of misleading of Ms Lai, the Professional Conduct Committee was not aware of more serious allegations including misappropriation.
The respondent attempted to mislead the Tribunal by the sworn evidence she gave in her Affidavit on 4 May 2014 filed 5 May 2914. In each of the paragraphs 9 to 14 in that affidavit the respondent testified she received by email an authority from Mrs McPeake to withdraw money from the Trust Funds and pay an outstanding invoice of the respondent. The respondent was required by summons to give evidence returnable at the Tribunal on 6 June 2014 to produce the emails. She produced no email. Mrs McPeake's evidence is that she made none of the alleged payments and sent no such email.
The relevant six authorities produced by the respondent are not originals; they are photocopies. Mrs McPeake denies signing any of them. The purported signatures of Mrs McPeake on those six documents mis-spell the surname Mrs McPeake by omitting the "e" at the end. For those reasons and that the signatures are completely identical and appear to be cut and pasted, it is clear that the signatures on those six authorities are forgeries.
In relation to the six receipts attached in respect of purported payments made by Mrs McPeake for costs and disbursements in respect to the Family Law proceedings, proceedings against NDP, and proceeding against Ms Karman Mrs McPeake denies paying any of those amounts. The Tribunal is satisfied that the alleged receipts were forged by the respondent.
In the Affidavit the respondent sought to mislead the Tribunal by the following false evidence:- 1. Para 14 "Whilst the money was in the Trust Account I disbursed only in accordance with Linda's authority"; 2. Paragraph 21 …. "During the period 13/10/2011 to 30/03/2012 in accordance with my advice Linda started to repay the controlled money account the money she had authorised me to withdraw to pay my invoices." 3. At paragraph 22, "At times she paid it in cash. At those times I took the money and we paid a cheque into the account" 4. At paragraph 26 "On about two occasions Linda paid me large amounts of cash." 5. Paragraph 31 " Linda usually paid me by cash, and later by cheque."
CONCLUSIONS
The Tribunal finds that the following grounds for the first application have been established: - 1. The respondent failed to invest the trust monies in accordance with the instructions provided by those persons entitled to the monies, namely Mr & Mrs McPeake. 2. The respondent failed to provide statements in relation to the Mc Peake trust money. 3. The respondent failed to respond to the correspondence, particularly to the correspondence from the solicitors for Mr McPeake in relation to the respondent's investment and /or dealings with the trust money. 4. The respondent breached section 255 of the Act in that : - 1. She failed to hold the trust money exclusively for Mr and Mrs McPeake while was in the General Trust Account; 2. She disbursed some of the trust money contrary to the directions given by Mr and Mrs McPeake; and 3. She failed to account to the McPeakes in accordance with the requirements of s 255(3) of the Act and paras 82(6)(b) and (c) of the Legal Profession Regulation 2005; 4. She also breached subsection 255(3) of the Act by failing to issue a receipt in accordance with clause 76(5) of the regulation in that the receipt she issued for the trust money incorrectly stated that the money was received from Mrs McPeake only, incorrectly spelled the surname by omitting the "e" on the end, was not endorsed "Controlled Money Account" and the name of the person who received the money was not stated. 1. The respondent breached Section 256 of the Act. She failed to comply with subsection 256 (1) by not depositing the money in the Controlled Money Account as specified in the written direction. It was not until fourteen months expired that the respondent deposited what was left of the Trust money to a Controlled Money Account. 2. The respondent breached subsection 264 (2) of the Act in that she failed to keep trust records in a way that at all times disclosed the true position in relation to the Trust money received on behalf of the McPeakes. She breached the sub-section by not keeping trust Account records in a way that enabled the Trust Records to be conveniently and properly investigated or externally examined. The records in relation to the trust money concerning Mrs McPeake's money, transfers, payment of costs, and receipts of money into the Controlled Money Account, were in many cases intended to mislead and hide misappropriations or other misconduct.
In relation to the second application the Tribunal concludes that the following grounds have been established: - 1. The respondent misappropriated $58,160.00 of trust funds. 2. The respondent caused the deficiency in the trust account for Mrs McPeake of $58,160.00 in breach of para 262(1)(a) of the Act. 3. The respondent repeatedly failed to account to Mr and Mrs McPeake for about 14 months. 4. The respondent falsified trust ledgers for Mr and Mrs McPeake by making false entries and by inserting false particulars. She fabricated trust ledgers for the purported debt recovery matters. 5. The respondent engaged in an elaborate scheme of falsehoods including production of documents, non-existing files, including file notes, statements, letters and invoices, with the intention of concealing her misappropriation. 6. The respondent attempted to mislead Mr Anthony Fairbairn, Law Society Trust Account Investigator and Ms Michelle Lai, Law Society Chapter 4 Complaints Investigator, by providing false information concerning her dealings with trust money and other matters. 7. The respondent mislead Mr Fairbairn and Ms Michelle Lai by providing false information concerning her dealings with the trust monies. 8. The respondent attempted to mislead the Tribunal by her evidence given in her Affidavit of 4 May 2014

UNSATISFACTORY PROFESSIONAL CONDUCT AND PROFESSIONAL MISCONDUCT 1. Sections 496, 497 and 498 of the Legal Profession Act 2004 provide: 496 Unsatisfactory professional conduct For the purposes of this Act: "unsatisfactory professional conduct" includes conduct of an Australian legal practitioner occurring in connection with the practice of law that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent Australian legal practitioner. 497 Professional misconduct (1) For the purposes of this Act "professional misconduct" includes: (a) unsatisfactory professional conduct of an Australian legal practitioner, where the conduct involves a substantial or consistent failure to reach or maintain a reasonable standard of competence and diligence, and (b) conduct of an Australian legal practitioner whether occurring in connection with the practice of law or occurring otherwise than in connection with the practice of law that would, if established, justify a finding that the practitioner is not a fit and proper person to engage in legal practice. (2) For finding that an Australian legal practitioner is not a fit and proper person to engage in legal practice as mentioned in subsection (1), regard may be had to the matters that would be considered under section 25 or 42 if the practitioner were an applicant for admission to the legal profession under this Act or for the grant or renewal of a local practising certificate and any other relevant matters. 498 Conduct capable of being unsatisfactory professional conduct or professional misconduct (1) Without limiting section 496 or 497, the following conduct is capable of being unsatisfactory professional conduct or professional misconduct: (a) conduct consisting of a contravention of this Act, the regulations or the legal profession rules, (b) charging of excessive legal costs in connection with the practice of law, (c) conduct in respect of which there is a conviction for: (i) a serious offence, or (ii) a tax offence, or (iii) an offence involving dishonesty, (d) conduct of an Australian legal practitioner as or in becoming an insolvent under administration, (e) conduct of an Australian legal practitioner in becoming disqualified from managing or being involved in the management of any corporation under the Corporations Act 2001 of the Commonwealth, (f) conduct consisting of a failure to comply with the requirements of a notice under this Act or the regulations (other than an information notice), (g) conduct of an Australian legal practitioner in failing to comply with an order of the Disciplinary Tribunal made under this Act or an order of a corresponding disciplinary body made under a corresponding law (including but not limited to a failure to pay wholly or partly a fine imposed under this Act or a corresponding law), (h) conduct of an Australian legal practitioner in failing to comply with a compensation order made under this Act or a corresponding law. (2) Conduct of a person consisting of a contravention referred to in subsection (1) (a) is capable of being unsatisfactory professional conduct or professional misconduct whether or not the person is convicted of an offence in relation to the contravention.

The view of the Tribunal is that the matters raised in the first application each separately constitute unsatisfactory professional conduct.
However, the grounds in the second application are much more serious. Some of the grounds for the second application involve a high level of dishonesty and deceit of the McPeakes, Mr McPeake's solicitors, a trust account investigator, and Ms Lai the Law Society Complaints Investigator. Then she gave false evidence on oath in her affidavit of 4 May 2014 intending to mislead the Tribunal. The respondent has committed disgraceful and dishonourable conduct.
Together the grounds in the two applications that have been established constitute serious professional misconduct. The usual consequence of misuse of trust funds by a solicitor is removal from the Roll ( Dupal v Law Society of NSW (Unreported, NSWCA, 26 April 1990) per Kirby P). The grounds proved establish that the respondent does not have the qualities of trustworthiness and character to be entrusted with the responsibilities of a legal practitioner. ( See NSW Bar Association V Hamman (1999) 217 ALR 553 at [100] per Mason P). She does not have the level of integrity required. She is not a fit and proper person to engage in Legal Practice. The Tribunal therefore made the order for the respondent to be removed from the Roll of Local Lawyers.

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