Legal Services Commissioner v Russo

Ground 3: Failure to account for payment of fees

1. Ground 3 is pleaded as follows: 1. … 2. … 3. … 4. … 5. … 6. … 7. … 8. … 9. … 10. The applicant repeats particulars 1 to 7. 11. On or about 24 August 2009, Adamson Solicitors representing P wrote to Mr Russo enclosing a copy of a cheque in the sum of $5,605.10 in proposed payment of Mr Russo's outstanding professional fees and disbursements. 12. During the period 6 December 2012 to 14 June 2013 Adamson wrote to Mr Russo about payment of Mr Dupree's fees by their client and the Local Court proceedings commenced by Mr Dupree. 13. In or about mid 2013 P retained Marks Griffiths & Bova Solicitors to act for him in relation to payments made by him to Mr Russo for professional fees and disbursements, including counsel's fees. On or about 8 August 2013 Marks Griffiths & Bova wrote to Mr Russo about this matter. 14. Mr Russo failed to account to Adamson and Marks Griffiths & Bova on behalf of P regarding payments made by P for counsel's fees as summarised in particular 2 and not paid by Mr Russo to counsel until 13 March 2014. 15. The applicant repeats particular 7.
2. In his reply, Mr Russo, subject to his argument that there was no direction for payment for barrister's fees and also a denial that the payments were made to him personally or his staff, admitted paragraphs 1 to 7 and 11 to 15. In respect to para (14) of the particulars, he denied failing to account except in respect of fees of Mr Dupree in his bills of 9 March 2009 and 18 May 2009.
3. It should be mentioned here that the bills that Mr Russo provided to P that included the relevant fees of Mr Dupree did not particularise the disbursements and did not identify the fees of Mr Dupree as being part of the disbursements claimed. They included a single item "disbursements incurred on your behalf" and then an amount and another for GST. When he later wrote itemized bills, he included in them (where applicable) an item "barrister's fees - James Dupree" for any barrister's fees included, and then set out the amount of the fees and the amount of the GST claimed.
4. It is clear that the invoices sent originally to the client did not identify barrister's fees paid and the amount. Had Mr Russo looked at a copy of such a bill in his office, it would not have identified whether barrister fees were paid, the amount, and the relevant amount of GST. This practice of Mr Russo providing such invoices to his client without providing particulars of the individual disbursements, did not adequately inform the client whether the whole bill, or part of it, had already been paid by funds received from the client. It did not account to the client. It did not identify a part of the account that was for an unpaid disbursement.
5. There is a considerable history relevant to this ground. It commences by the invoices that included counsel's fees but did not particularise disbursements, including the counsel's fees. This occurred in particular with the bills of 20 January 2009, 27 March 2009 and 25 June 2009.
6. In a letter to Mr Russo of 19 May 2009 Mr Dupree raised the fact that his fees of $8,602.00 billed on 9 March were still unpaid and asked "Please let me have your cheque in the sum of $10,131.00 being the balance of fees outstanding by return." The evidence does not disclose that Mr Russo responded to that by replying to Mr Dupree, contacting P, making any enquiry in his office or any other action.
7. On 30 July 2009, Adamson Solicitors wrote to Mr Russo advising that they had instructions from P and requesting P's files. On 4 August 2009 Mr Russo responded and said that he would forward the file, on receipt of payment of the bill of 25 June 2009. Payment was made on 25 August 2009.
8. On 15 September 2009, Mr Dupree sent an email to Mr Russo about unpaid fees. He said, referring to one of the staff of Mr Russo "Sal, yesterday you indicated that you would get Leeta to ring your client and chase up the fees due. I spoke with her today to enquire as to whether she had rung your client, and I was informed by her that she had not been told to ring your client to chase up the fees".
9. On 29 October 2009 Mr Dupree's bookkeeper sent an email to Mr Russo's bookkeeper "Leeta confirming advice from Russo that [P] had paid his bill in August 2009 and requested fees be paid to your account."
10. On 10 March 2012 P's son sent Adamson Solicitors an email. He advised that P had just returned home after heart surgery and had asked him to "look after the matter for him" because he had paid Mr Dupree's fees to Mr Russo and Mr Russo had apparently not paid Mr Dupree. Attached was a copy of the Statement of Claim issued by Mr Dupree and a copy of a bank statement from P's bank showing clearance on 26 March 2009 of the cheque for $8,602.00 he paid to Mr Russo for Mr Dupree's fees.
11. On 6 December 2012, Adamson Solicitors wrote to Mr Russo referring to the proceedings by Mr Dupree and noting that Mr Russo had been named as a defendant. Adamson's said that when P's file was transferred to Adamson Solicitors, Russo and Partners confirmed that no further fees were payable, and they requested an explanation. They stated "we would appreciate an answer within 3 working days as to what your explanation would possible (sic) be in the circumstances"
12. There was no reply, as such, to the request. More than a month later on 9 January 2013, Mr Russo avoided the issue. He responded by writing to Adamson Solicitors saying "as the file has been archived, would you please provide a copy of the letter you refer to and we will reply accordingly".
13. Adamson Solicitors replied on 28 February 2013 and in that letter said "we can only assume that notwithstanding [P] paid all fees as we referred to in previous letter that you have failed to pay those fees which were rendered by counsel. Please confirm or otherwise. [P] we can indicate is very upset at the action being taken against him".
14. Mr Russo replied on 5 March 2013 "we do not understand what you mean in your letter. We no longer hold a file and cannot assist you".
15. On 16 May 2013 Adamson Solicitors wrote to Mr Russo noting his tax invoice of 25 June 2009 included counsel's fees, and that he was paid by P all outstanding fees. "we note that at the time of transferring the file you sought and were paid your outstanding fees being an understanding of all costs and disbursements. Given the same, we require you to undertake to pay those monies that is sought in the judgment by Mr Dupree within seven (7) days….".
16. It appears that Mr Russo, did not give any serious consideration to what was said in that letter from Adamson Solicitors. He again avoided the issue. His reply on 22 May 2013 said "We are most concerned that you have wasted [P]'s money on a defence of the above proceedings [proceedings in the Gloucester Local Court]. In circumstances where had he discharged the outstanding amount, the costs associated with these proceedings would have been minimized. We query whether or not you have obtained proper instructions from your client in respect of this matter and are most concerned as to how this resistance to payment of Mr Dupree's fees is escalating out of control.".
17. Adamson Solicitors wrote again to Mr Russo on 13 June 2013 noting that Mr Russo's letter dated 22 May 2013 did not respond to the letter to him from Adamson Solicitors dated 16 May 2013. Adamson Solicitors requested a response "as a matter of urgency". They said: "Our client's instructions are to take more formal action in circumstances where the matter progress and you have failed in your obligation as a solicitor to respond".
18. On 14 June 2013 Mr Russo wrote to Adamson Solicitors. He stated that he would attend to the matter "as soon as possible" and "Once we have been able to retrieve the file, if it is still in our possession, we will then be able to answer the various questions.".
19. On 8 August 2013 Marks, Griffiths & Bova wrote to Mr Russo on behalf of P requesting copies of the trust account statements in respect of the maters in which Mr Russo acted on behalf of P. Mr Russo did not respond to that request.
20. Marks, Griffiths and Bova lodged a complaint with the Office of the Legal Services Commissioner against Mr Russo on behalf of P.
21. The Legal Services Commissioner wrote to Mr Russo on 13 September 2013 requesting submissions from him on the allegations of failure to pay counsel's fees and failure to account. A copy of the complaint from Marks Griffiths and Bova was provided and particulars of the 2 grounds. His response of 16 September 2013 did not address or deny the 2 grounds.
22. He argued that the complaint should not be investigated because it related to conduct more than 3 years prior and because: ● there had been the Local Court proceedings and P could have cross claimed against him in those but didn't; ● Adamson Solicitors had been provided with the file and "all the material requested"; ● "at no time was there any suggestion by Mr Adamson that he had any basis at all to support his client's contention that payment had been made'; ● the complaint "is not fair and reasonable, nor is it just and fair to deal with the complaint having regard to the delay and there being no reasons for the delay.." ● "None of the cheques were produced in the Notice of Motion to set aside Dupree's judgment"; and ● "there is a public interest component to this complaint i.e. litigation has completed and resolved all matters between the parties";
23. The Commissioner decided to proceed with the investigation. On 4 November 2013, the Office of the Legal Services Commissioner wrote to Mr Russo advising that the investigation would also include an allegation that he breached section 255 of the Act and requesting a copy of all trust records and all tax invoices and communications between and / or P in relation to P's matters.
24. On 15 November 2013, Mr Russo wrote to the Office of the Legal Services Commissioner and said "we do not have the file. The file was provided to Mr Adamson and we cannot provide you with any of the material which you have requested in relation to the file". He did not provide copies of any trust records or of any invoices. He requested in his letter copies of the cheques P was claiming had paid counsel's fees so that it could be investigated further".
25. There was no evidence that Mr Russo or throughout these communications made any attempt to personally (or by a staff member) check the amounts of Mr Dupree's 2 unpaid bills with Mr Russo's records of receipts issued to clients, his ledger records for P, his records in bank statements of deposits to his bank accounts or copies of the bills issued to his client,
26. On 18 November 2013 the Office of the Legal Services Commissioner wrote to Mr Russo. It indicated that it had requested P's file from his solicitors and "in the meantime, you should be able to provide me with a copy of all of your trust records as requested at question 1 of my letter dated 4 November 2013".
27. On 29 November 2013, Marks, Griffiths and Bova wrote to the Office of the Legal Services Commissioner enclosing a copy of the file, copies of cheque butts and statements. A copy of that letter and the documents was sent to Mr Russo on 6 December 2013.
28. On 17 January 2014 more than 10 weeks after the request of the Commissioner for Mr Russo to provide copies of "trust records and all tax invoices and communications between and / or P in relation to P's matters" he wrote to the Office of the Legal Services Commissioner and said "we are currently in the process of retrieving the file. It is our intention to provide a full accounting exercise of all the monies held in receipt. We hope to have this to you within the next 2 weeks". He did not provide any accounting.
29. On 11 February 2014, more than 14 weeks after the request of 4 November, Mr Russo had still not provided any of the documents requested. The Office of the Legal Services Commissioner wrote to Mr Russo noting his failure to provide requested information and enclosing a notice under Section 660 of the Legal Profession Act. It stated "You still have not provided the information and documents requested in this office's letter dated 4 November 2013. I have decided to issue a notice to you under Section 660 of the Legal Profession Act 2004".
30. On 13 March 2014, Mr Russo sent a letter to Mr Dupree already quoted and enclosing a cheque for $10,131 drawn on Charju Pty Ltd. It appears that he did not communicate with P regarding that payment and he did not pay Mr Dupree any amount for costs or interest on the $10,131.00.
31. Mr Russo also wrote to the Office of the Legal Services Commissioner on 14 March 2014 enclosing a statutory declaration. Annexed to that was a copy of the combined office and trust ledger which had been "printed from archived records as requested". In para 7 of the statutory declaration of 14 March 2014 he declared, "Upon reconciliation of the office account, it appears I did receive payment of my invoices and I have forwarded to Mr Dupree a cheque in the sum of $10,131.00 in respect of his fees."
32. At paragraph 4 of the letter he said "No monies were paid into trust at any time as bills of costs were outstanding and payable at all times monies were received". At paragraph 6 of his letter regarding allegation 3.1, he said "the funds were not trust funds and therefore there was no breach of the Section".
33. The Office of the Legal Services Commissioner requested further information from Mr Russo by letter dated 28 March 2014. Mr Russo replied in letter dated 10 April 2014. He said "the funds were applied to the tax invoices as issued by my firm". And the reason why the funds paid by [P] for counsel's fees were not passed onto Mr Dupree was said to be "an administrative oversight".
34. On 6 June 2014 Mr Dupree wrote to Mr Russo seeking the balance due under the judgment for costs and interest of $7,559.21. He said in that letter "it seems abundantly clear that the judgement obtained against your former client by me was as a result of your failure to make payment of my outstanding fees in a timely fashion such that you are responsible".
35. There is no evidence of any payment or other response by Mr Russo.
36. On 23 July 2014, P, via his representative paid $7,213.97 to settle the judgment debt owing to Mr Dupree. This was additional to the amount of $887.49 previously recovered under a garnishee order, so that P paid Dupree a total of $8,101.46.
37. On 18 August 2014 the Office of the Legal Services Commissioner wrote to Mr Russo and informed him that these proceedings would be taken against him. It set out the reasons.
38. Ground 3 of the complaint has been proved.

Unsatisfactory Professional Conduct / Professional Misconduct.

1. Section 496 of the Act applied at all relevant times and provided:

Unsatisfactory professional conduct (1) For the purposes of this Act: (a)"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.

1. Similarly section 497 of the Act applied and provided::

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;

1. Section 498 of the Act similarly applied and provided::

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.

1. Mr Russo did not pay Mr Dupree or P the balance of the judgement Mr Dupree had obtained against P. Nor did he pay either of them any interest on the $10,131 for the period of about 5 years that he had had the use of the money.
2. In cross examination Mr Russo insisted that he is "well aware" of the requirements of the Act in relation to dealings with client's money. He conceded that his primary obligation in that regard was to ensure that the firm had dealt correctly with trust monies. He still denied directing P to pay money into the general account. And he denied that anyone in the firm must have done it. This is notwithstanding the evidence of his written directions to the client to do so.
3. In cross examination it was asked whether he accepted that in sending the invoice, which included barrister's fees, he was suggesting the client could pay the amount of the barrister's fees to him and he would pass it onto the barrister. His first response was to avoid the question. But he eventually conceded the proposition.
4. He later conceded that a reasonably competent solicitor would, if he held a deposit in an office account of $8,602 from a client, "enquire where that came from".
5. It was put to him that "a reasonably competent solicitor who had previously received counsel's fees from a client into an office account, would have considered it likely that a client might pay counsel's fees into the office account in the future". He did not respond to the question. Eventually, the presiding member interrupted him and cautioned him about answering the questions rather than volunteering unresponsive material. The question was repeated and he answered "I think probably yes".
6. When he was asked the question "do you accept that if you have contacted P and told him Mr Dupree had told you his fees were still unpaid, [P] would have told you that he had paid them to your account?". His response was "I don't know". When the question was repeated to him by the presiding member, he conceded the answer was "yes". He denied that the reason he took no action regarding the letter from Mr Dupree because he knew that the fees had already been paid by the client. He said that at no time did he ever direct P to pay counsel's fees into his trust account.
7. In cross examination Mr Russo was at times not responsive to questions and often questions had to be repeated to him before an answer was elicited. He also at times was evasive and also avoided questions.
8. In paragraph 35 of his affidavit he said: "to the best of my recollections I had formed a view in 2009 that the client had discharged both Senior Counsel and Junior Counsel's fees directly, and that my fees were the only fees outstanding. I negotiated payment of my fees and the last payment was deposited into my general office account by EFT or direct deposit".
9. However, it was clear that at the time the payment of $5,605.10 for his last bill was made on 25 August 2009, he was on notice from Mr Dupree that his fees, to a total of $10,131 had not been paid. In that regard he conceded that a reasonably competent solicitor would have ensured that counsel's fees had been paid. After considerable evasion he eventually conceded in cross examination that when he sent his letter of 9 January 2013 in response to the enquiry from Adamson Solicitors of 6 December 2012 saying that he needed a copy of the letter referred to, he did not need the letter and could have still investigated the allegation regarding the payment of counsel's fees.
10. Similarly, he eventually conceded that when he received the letter of 28 February 2013 from Adamson Solicitors and replied "we do not understand what you mean in your letter. We no longer hold a file and cannot assist you", he did not need to file to investigate the alleged payment by the client of counsel's fees.
11. Also, in relation to his letter of 14 June 2013 in response to the letter of 13 June 2013 from Adamson Solicitors, he purported that he needed to retrieve the file in order to answer the questions or queries. It was put to him that he did not need the file to respond, and his answer was "by 'file' I meant the ledger etc".
12. He eventually conceded that he could have responded to the issues without the file.
13. He denied that his responses to the solicitors acting for P were evasive and misleading. He denied that he was careless in handling the client's money. He still in cross examination denied that the funds for unpaid counsel's fees were trust monies and said the issue was "in debate. I can see that some think it is".
14. It was put to him "a client's money paid to a solicitor to pay another is trust money?" After considerable delay he replied "I've always considered it to be transit money….but I recognise now it's trust money".
15. In a letter of 28 March 2014, the Commissioner asked a series of questions of the Mr Russo, including "…did you undertake any investigations to determine whether Mr Dupree's fees, the subject of the proceedings, had been paid? If the answer is 'yes': 5.1 what investigation did you carry out and what was the result of the investigations and 5.2 when did you carry out these investigations?".
16. His answer was as follows: "…5.1 I was unable to undertake any investigations. Mr Adamson had the whole of my file. 5.2 when I received the file from the Legal Services Commissioner".
17. In cross examination he conceded that those answers were incorrect.
18. When it was put to him that in 2013 or even 2012 he could have accessed bank records and statements, he denied that proposition.
19. In re-examination he said that he has changed his office practice and counsel's fees are no longer included in an account. He sends the bill for counsel's fees to the client to pay. He has kept a running ledger of counsel's fees since early 2014 which has the date of the account and when it is paid. He requires all counsel to inform him when they have been paid. He has also changed his procedure for access to bank statements. He said that in 2009 "I didn't look at bank statements". He conceded that if he had not failed to reconcile the bank statements, the problem would have been revealed.
20. Since 2014 he reviews bank statements and "reconcile who has paid monies for an account". He said that in 2012 he would have had to retrieve the bank statements to investigate. But he didn't.
21. His evidence was that he didn't check financial records in 2009 "because there was no issue in 2009".
22. The Tribunal finds that the failure to account was unsatisfactory professional conduct which involved a substantial and consistent failure to reach or maintain a reasonable standard of competence and similarly a failure to reach and maintain a reasonable standard of diligence. Under para 497(1)(a) his failure to account was therefore professional misconduct .
23. Mr Russo's evidence was that there was no motive or reason for him to not pay counsel's fees. The Tribunal members raised in closing submissions the issue of whether there was evidence to support Mr Russo's contention that he had no financial need to have trust money go to his office account.. His counsel then referred the bank statements part of Exhibit SR1 to his affidavit (at pp 32 - 37).. They are for the office account and cover most of the period from 1 January 2009 to 31 August 2009. Some pages are missing.
24. Those bank statements show deposits in P's name as follows: 1. 22/01/2009 - $7,012 2. 26/03/2009 - $8,602 3. August 2009 - $5,605.10
25. The entries in the pages provided do not show the account ever being in overdraft, but the office account balance on 4 occasions in January 2009 was $14.42 and on one occasion was $6.93. In January, the balance of the account was less than $5,000 for much of the month. In February / March the account on 3 occasions was $20.93. The highest balance for the account in the period of March covered was $7,992.51.
26. In the April entries, there are periods where the account balance was less than $1,000, and once as low as $31.63.
27. In the August entries, most of the time the account balance was less than $2,000.
28. The number of times that the balance of the office account exceeded $10,131 in those 6 pages of bank statements is only 4. Generally there were insufficient funds in the office account in the period covered by the statements to pay Mr Dupree's fees.
29. The Tribunal is of the view that these bank statements indicate, in the absence of contrary evidence, that there were financial pressures, which would have motivated Mr Russo to not investigate an alleged deposit of trust monies into his office account and not to rectify it if he knew of it.
30. With regard to Section 255, it is of particular concern that in 2009 and subsequently a solicitor with more than 20 years experience did not understand that the money that his client was paying him for payments to a barrister or some other person was trust money, even if a bill had been rendered including the unpaid amount. He steadfastly adhered to that position for years since 2009 until quite recently. He still appears to be ambivalent about the issue.
31. A further concern is that he gave, or caused the client to be given, instructions to pay $8,602, which was all trust money for barrister's fees, into the office account. Similarly the payment of 22 January 2009 which included $1,628.00 for unpaid barrister's fees was made by the client to the office account and on the balance of probabilities that was on direction given by Mr Russo or on his instruction. He also instructed the client to pay the subsequent bill, which included trust money for unpaid barrister's fees, into the office account.
32. Another issue that is of concern to the Tribunal is that although the evidence falls short of establishing intentional misappropriation, it was clear that Mr Russo was causing trust money to be paid into his office account, and did not rectify the situation in relation to the second and third amounts till after he had use of the money for about 5 years.
33. Over that period the solicitor knew, or ought to have known, that the barrister's fees had been paid into his office account and should have immediately rectified the situation by paying the barrister. He did not do so. He did not make reasonable enquiries despite repeated requests by or on behalf of P. That was intentional or reckless indifference.
34. His conduct under ground 1 was conduct which contravened Section 255 of the Act. It fell far 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.
35. It was clearly unsatisfactory professional conduct.
36. With regard to ground 2, the respondent had the responsibility to pay Mr Dupree, even if the client had not paid him the funds.
37. A competent solicitor would have known that the funds had been paid to his practice. A competent solicitor would have ensured that disbursements in a bill were particularised so as to record that information for the client and his record of the bill.
38. It has been held that "wilful or persistent refusal to pay counsel's fees can amount to professional misconduct on the part of the solicitor" (Re Robb (1996) 134 FLR 294 at P310; Law Society v McCarthy (2003) NSW ADT 58 at [43] and Council of the Law Society of NSW v Beazley [2012] NSW ADT 153)
39. In Re Robb, trust funds were transferred to an office account to pay counsel, but the payment was delayed for several months. This conduct was found to amount to professional misconduct.
40. The court held: "where the solicitor holds a client's funds for the very purpose and uses them for the solicitor's own ends, then the solicitor's conduct is that the Court must take steps to ensure that the solicitor concerned and other members of the profession who might act likewise, whether through indifference or ignorance, understand the seriousness of their breach of duty. … it is necessary then that the order of the Court, although not punitive in character, deliver the message that no matter how efficient, eminent or popular the practitioner, conduct like that in the present case must be understood by all professional practitioners to amount to professional misconduct" (re Robb (1996) 134 FLR 294 at 330)
41. In Law Society of NSW v Davidson [2007] NSW ADT 264 the solicitor delayed for periods of 1 - 4 months the payment of barrister's fees and consultant's fees for a total of 6 different people. The Tribunal held that the delays were "not a mere matter of oversight or misapprehension as to the solicitor's obligation to pay those disbursements". It found that the delays were deliberate and constituted professional misconduct.
42. In Law Society of NSW v Graham [2007] NSW ADT 67 the Tribunal held that the failure to pay counsel's fees was professional misconduct.
43. In Law Society of NSW v McCarthy [2003] NSW ADT 198 the solicitor delayed paying counsel's fees for 12 months after receiving the funds into his personal account. This failure was found to be professional misconduct.
44. Mr Russo's failure to pay counsel's fees was either intentional or done because he was recklessly indifferent to his obligations. It was professional misconduct.
45. The practitioner's rigidity and arrogance have been remarkable. As has his determination not to bother himself with a serious claim by a former client. A reasonably diligent solicitor would have investigated the client's allegation of payment immediately it was raised, as it suggested a serious failure on Mr Russo's part in terms of competence and diligence.
46. Over a very long period of time he refused to entertain any suggestion that he might have received the barrister's fees. He refused to make any reasonable enquiries despite requests from his former client, solicitors, and even the Legal Services Commissioner. It was only when he was confronted with this disciplinary application that he investigated as he should have done as soon as the issue was first raised with him.
47. His conduct of failing to account over those years after the client's claim was raised, displayed rigidity, arrogance and failure to recognise and address the interests of his former client.
48. With regard to ground 3, it took Mr Russo years and commencement of these proceedings to come to the realisation that he should account to his client in respect to the monies his client had paid to him, particularly the payment of barrister's fess. Consistently over that period, his conduct was a substantial and consistent failure to reach or maintain a reasonable standard of competence and a substantial and consistent failure to reach or maintain a reasonable standard of diligence and amounted under para 497(1)(a) of the Act to professional misconduct.
49. In re-examination Mr Russo testified that he was "quite happy to pay compensation to P and 'with the benefit of hindsight it should never have happened". However, at that time he had not voluntarily made any payment to P at all, notwithstanding that P had incurred substantial payments to Mr Dupree, legal costs for solicitors to rectify the non-payment of counsel's fees, and also legal costs in respect to his unsuccessful motion to set aside the judgment against him. He also had a liability for interest on the judgment that came against him.
50. More than 3 months after the hearing the parties provided the tribunal with evidence that Mr Russo had paid P a compensation settlement amount of $7,500.00. By then P was represented by a 4th firm of solicitors. The evidence provided does not indicate how the amount was arrived at. P had paid Mr Dupree a total of $8,101.46. He had had 3 firms of solicitors act for him. In the absence of other evidence it appears the settlement did not fully reimburse P for what he paid Mr Dupree or compensate him for legal costs or interest foregone.

Fitness to Practice

1. The Tribunal finds that because of his lack of competence, lack of diligence and lack of integrity, under subsection 497(2) of the Act Mr Russo is not a fit and proper person to engage in legal practice.
2. The Tribunal has decided that it should, to protect the public, the reputation of the profession, and the standards of the profession, exercise the power under S.562 of the Act to remove Mr Russo from the local roll.

Costs

1. As a consequence of the findings that the practitioner is guilty of professional misconduct the tribunal is required by subsection 566(1) of the Act to order the practitioner to pay the applicant's costs of the proceedings unless the tribunal is "satisfied there are exceptional circumstances". The Tribunal finds there are no exceptional circumstances that would support a different order.

Orders

1. Accordingly the orders are: 1. The respondent is guilty of professional misconduct; 2. The respondent's name is to be removed from the local roll; 3. The respondent must pay the applicant's cost of or incidental to the proceedings as agreed or assessed. I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 12 April 2016