31 The protection of the public requires that money paid by a client on trust to a practitioner is properly recorded and that it is available, and only available, in relation to that client's affairs. Throughout the period of the conduct in question, Part XI of the 1949 Rules contained detailed provisions to ensure the proper recording of trust monies and maintenance of trust accounts. Rule 91(1) required that every practitioner keep and maintain books of account and other accounting records necessary to show and distinguish between money received from or held on account of each client and money received, or held or paid, on account of the practitioner himself. Rule 92 required that a practitioner deposit trust monies to the credit of a trust account. Rule 94(2) permitted a practitioner to pay out of the trust account money for or on account of a client, notwithstanding that the practitioner did not hold in the trust account money, or sufficient money, for that payment, only if the practitioner had sufficient money in the trust account to cover the debit balance. Rule 99 required a practitioner, at least every month and at intervals of no longer that six weeks, to cause the trust ledger to be balanced and an account or statement to be drawn up reconciling the balance of the trust ledger with the trust account bank statements. The 1949 Rules were repealed, with effect from 14 May 2004, by r 77 of the Legal Practice Board Rules 2004 (WA) (2004 Rules). However, Part VI of the 2004 Rules contains similar requirements in relation to trust accounts (see, in particular, r 51, r 52, r 53 and r 57).
32 Notwithstanding the previous finding by the Disciplinary Tribunal that Mr Cullen had been guilty of unprofessional conduct in a similar respect to the present charge, the Tribunal does not consider that the severe sanction of Mr Cullen's suspension from legal practice is necessary or appropriate for the protection of the public or the maintenance of proper standards in the legal profession. Had he been aware of the problem, and failed to address it, or had he directly caused the problem, a suspension may have been appropriate. Had there been dishonesty, a suspension for the maximum period available to the Tribunal, or a report to the Supreme Court (full bench) recommending a greater consequence, would certainly have been appropriate.
33 The Tribunal considers that the protection of the public and the maintenance of proper standards warrants a reprimand, a substantial fine, the imposition of conditions on the right of Mr Cullen to practice for the maximum period available to the Tribunal, namely two years, and publication of the Tribunal's decision and reasons.
34 The fine should be substantial because, although the circumstances which gave rise to Mr Cullen's unprofessional conduct were not of his making, and do not reflect any dishonesty or impropriety on his part, there was a risk to clients' money, and he did not have in place a proper system to ensure that trust account deposits and bank statements were reconciled, as was required by r 99 of the 1949 Rules. The Tribunal accepts that it would generally be impractical for a practitioner to undertake the reconciliation which was required by r 99 of the 1949 Rules (and which is now required by r 57(1) of the 2004 Rules) personally. However, the protection of the public and the maintenance of proper standards require that a practitioner must put in place a system to ensure that reconciliation by an appropriately qualified and experienced person occurs in accordance with the Rules, and that any irregularities are brought immediately to his or her attention.
35 It is apparent that Mr Cullen did not have an appropriate system in place to ensure compliance with r 99 of the 1949 Rules. This resulted in a breach of r 94(2) of the 1949 Rules, which only permitted Mr Cullen to use trust account money on behalf of a client, notwithstanding that he did not hold money in trust or sufficient money, if he had a sufficient amount of his own money in the trust ledger to cover the debit balance; see now r 53 of the 2004 Rules. Mr Cullen's failure to have in place a system to ensure that the firm's trust ledger was balanced and reconciled with the bank statements in accordance with r 99 of the 1949 Rules was all the more significant, given that the Disciplinary Tribunal previously had found that he was guilty of unprofessional conduct in relation to the firm's trust account, and particularly in consequence of his failure to comply with r 99.
36 Throughout most of the period during which Mr Cullen was guilty of unprofessional conduct, from 1 October 2001 to 31 December 2003, the maximum fine which was available under s 29A of the Legal Practitioners Act 1893 was $10 000. During the period 1 January 2004 to 11 May 2004, the maximum penalty under the 2003 Act was $25 000. Bearing in mind the finding of unprofessional conduct in a similar respect in 1997, and the fine imposed by the Disciplinary Tribunal on that occasion, Mr Cullen's plea and acceptance of responsibility, the risk to clients' money, and the compliance costs, in light of the conditions on practice referred to below, the Tribunal considers that a fine of $8000 is appropriate. In the context of the maximum fine which was available throughout most of the period in question, this fine is, and is intended to be, substantial.
37 At the Tribunal's request, in the course of his address, Mr McCusker outlined a practical system, involving daily, weekly and quarterly review, to ensure that money received by Mr Cullen on trust is properly deposited and used. The Tribunal directed Mr Cullen to submit a proposed system in writing reflecting the characteristics outlined by Mr McCusker, following conferral and agreement with the Committee.
38 In accordance with the Tribunal's direction, Mr McCusker submitted a proposed system on behalf of Mr Cullen which is appropriate, practical and sensible, and which should be imposed by way of condition on Mr Cullen's practice for two years. The proposed system involves daily reconciliation by an experienced bookkeeper or the practitioner of deposits to the trust account with the trust account bank statement referenced by internet, weekly reconciliation by an experienced bookkeeper of deposits and withdrawals against the trust account bank statement, provision of this reconciliation to Mr Cullen and, following his review, to a Senior Trust Account Inspector of the Board within seven days, and provision by the auditors of a quarterly report in relation to the maintenance of the trust account to Mr Cullen and a Senior Trust Account Inspector of the Board within 21 days of the end of each quarter.
39 The Tribunal does not consider that the imposition of a condition on the right of Mr Cullen to practice which would preclude him from holding a trust account is necessary or appropriate for the protection of the public or the maintenance of proper standards. Such a condition would, in effect, prevent Mr Cullen from practising on his own account in the areas in which he has considerable experience. The conditions which are referred to in the previous paragraph in relation to daily, weekly and quarterly review of Mr Cullen's trust account will ensure its proper maintenance.
40 It is appropriate that Mr Cullen pay the Committee's costs in bringing these proceedings. Mr Goetze sought the sum of $2000, and Mr McCusker consented to that amount on behalf of Mr Cullen.