Michael George Conn [1992] NSWLST 4

The Legal Profession Disciplinary Tribunal In the matter of Michael George Conn Determination and Orders Before: Mr F. Herron (Presiding Member), Dr U. Gault and Mr A. Martin. Appearances: Mr D. Hipsley, instructed by Mr F. Smith, appeared for the Law Society of New South Wales. Mr G. Downes QC with Mr J. Webster, instructed by Messrs Barkell and Peacock, appeared for the Solicitor.

In this matter the Council of the Law Society of New South Wales (the Complainant) complained to the Legal Profession Disciplinary Tribunal (the Tribunal) against Michael George Conn (the Solicitor) under Section 135 of the Legal Profession Act 1987 (the Act).

The complaint was dated 24 March 1992, and the particulars of the complaint were:

The solicitor, without his client's authority, did deduct the sum of $24,219.80 from the client's trust funds and, despite his being informed that the client protested to (sic) such withdrawal, did not replace those funds in the trust account pending resolution of the ensuing dispute.

Those particulars were expanded under the heading Further Particulars in the complaint.

The Complainant sought the following orders: 1. Such orders as the Tribunal deems fit. 2. That Michael George Conn pay the costs of the complainant in these proceedings on a solicitor/client basis.

The Tribunal heard the matter on 26 October 1992 and reserved its decision.

The Complainant's case consisted of: 1. The Complaint dated 24 March 1992, including statutory declaration of Frederick John Smith dated 24 March 1992 and annexed documents, but not including those documents and parts of documents excluded as a result of submissions made on behalf of both parties. Those submissions, and the resulting rulings of the Tribunal, are set out in the Transcript of Proceedings (T), (exhibit"A"). 2. Statutory declaration of Martin Simpson dated 10 September 1992, subject also to certain exclusions set out in (T), (exhibit "B"). 3. Telephone entry of 18 January 1991, (exhibit "C"). 4. Oral evidence of Martin Bert Simpson, lithographic printer. 5. Oral evidence of Louis William Pierotti, solicitor.

The Solicitor's case consisted of: 1. Letter dated 20 July 1992 from Barkell & Peacock to the Complainant, and reply dated 6 August 1992, (exhibit "1"). 2. Photocopies of two cheques dated 12 March 1991 for $5,000.00 and 15 March 1991 for $4,167.05, (exhibit "2"). 3. Statutory declaration of Michael George Conn dated 20 July 1992, (exhibit "3"). 4. Statutory declaration of Martin John Woods dated 20 July 1992, (exhibit "4"). 5. Statutory declaration of John Michael Curran dated 15 June 1992, (exhibit "5"). 6. Statutory declaration of Maureen Hickman dated 16 July 1992, (exhibit "6"). 7. 16 declarations and 2 letters as to the character of the Solicitor, (exhibit "7"). 8. Outline document in the form of a summary of estimated disbursements and costs dated 1 November 1989, (exhibit "8"). 9. Outline document in the form of a summary of estimated disbursements and costs dated 4 May 1990, (exhibit "9"). 10. Business records of Teakle Ormsby and Associates in the form of telephone entries, (exhibit "10"). 11. Oral evidence of Michael George Conn, solicitor. 12. Oral evidence of John Michael Curran, barrister. 13. Oral evidence of Martin John Woods, solicitor. 14. Oral evidence of Mary McKenna, secretary.

The allegations against the Solicitor are set out in detail in the further particulars of complaint which forms part of the evidence in these proceedings as exhibit "A". The Tribunal does not consider it is necessary to repeat those details here. However, for ease of reference, that part of exhibit "A" headed "Further Particulars", is annexed hereto and marked with the letter "A". The relevant matters referred to in that part of exhibit "A" will be dealt with in this determination.

At the start of the hearing Mr Downes submitted on behalf of the Solicitor that much of the material contained in filed documents should be excluded on the ground that it was not relevant to the narrow issue before the Tribunal for consideration. In making that submission he relied on two documents which became exhibit "1". They were a letter dated 20 July 1992 from Barkell and Peacock to the Complainant seeking further particulars of the complaint, and the Complainant's reply dated 6 August 1992. Mr Downes submitted that the effect of exhibit "1" was to confine the complaint to a narrow question relating to the payment of money out of a trust account into a general account. He submitted that no complaint was made other than a complaint relating to section 61 of the Legal Profession Act 1987 (the Act), and that this effectively excluded all material relating to the conduct of the proceedings which gave rise to the trust money, as well as material relating to events which took place after the relevant act of transfer of money out of the trust account. Lengthy submissions were made on behalf of both parties on this aspect of the proceedings, and much time was taken up in considering various parts of the filed documents, and either admitting or excluding those parts.

The detail of the submissions and rulings on those submissions is set out in the Transcript of Proceedings, but it will be convenient to set out here a summary of the Tribunal's rulings. The Tribunal ruled that the issues for its consideration were whether or not the Solicitor had committed a breach of section 61 of the Act by withdrawing trust money in satisfaction of costs and disbursements without being so authorised by his client as required by Regulation 8, and, if so, whether such contravention was wilful so as to amount to professional misconduct as referred to in section 61(7). On that basis the Tribunal ruled further to exclude material relating to the conduct of the proceedings giving rise to the relevant trust money, and material relating to subsequent events, except as to such material ruled to be relevant to those narrow issues.

Before dealing with the evidence relating to the issues so determined, it is appropriate to give a brief outline of some of the facts which were not in dispute.

The witness Martin Simpson (Simpson) was, at the relevant time, a client of Teakle Ormsby and Associates (the firm). The Solicitor was and is one of two partners constituting the firm. The firm had a number of employed solicitors, including the witness Martin John Woods (Woods). Simpson was the plaintiff in a motor vehicle personal injuries claim against the GIO of NSW. The Solicitor was the partner in the firm handling the Simpson matter. Woods was the employed solicitor having the day to day conduct of the Simpson file. In respect of the conduct of the Simpson file, Woods was answerable to the Solicitor.

In May 1990 a judgment was given in favour of Simpson for $91,657.95. By letter dated 15 June 1990 the firm forwarded to Simpson a cheque for $65,113.31 and a document referred to in the letter as a "statement of account". The document showed that the firm had deducted $24,219.80 for costs and disbursements. In the course of the firm's accounting process carried out at the time the cheque was forwarded to Simpson, various cheques were drawn and the balance remaining in the trust account was transferred to the office account as costs and disbursements.

By letter dated 6 July 1990 addressed to "The Senior Partner" of the firm, Simpson objected to the account, disputed various amounts in it, and requested that it be amended.

By letter dated 26 July 1990 addressed to Simpson, the firm acknowledged receipt of his letter dated 6 July 1990 and advised him that it had submitted a party/party bill to the GIO of NSW. The letter said nothing about Simpson's objections or request.

In August 1990 Simpson gave instructions to Brophy Bridge and Mirow, Solicitors. Those Solicitors, by letter dated 13 August 1990 addressed to the firm, referred to the previous correspondence between Simpson and the firm and took up the objections on behalf of Simpson. They also noted that the firm was holding $24,219.80 on behalf of Simpson, and that Simpson had not authorised the firm to deduct any costs or disbursement from that amount.

By letter dated 20 September 1990 addressed to "The Senior Partner" of the firm, Brophy Bridge and Mirow noted that they had not received a reply to their letter of 13 August 1990 and called for a refund to Simpson of $19,099.20 representing the amount withheld, less disbursement not in dispute. They also stated that if the firm failed to so account to Simpson, their instructions were to make a formal complaint to the Law Society of New South Wales.

By letter dated 10 October 1990, Simpson made a formal complaint to the Law Society of New South Wales, ultimately resulting in these proceedings. The Tribunal now turns to the issues for its consideration:

Whether there was a breach of section 61 of the Act The Solicitor claimed that he believed he was authorised by Simpson to withdraw trust money held on behalf of Simpson in satisfaction of costs and disbursements. He based that belief on two things: 1. An assumption by him that Woods, who had the day to day conduct of the Simpson file, had obtained Simpson's authority (T-51A to 53); and 2. His reliance on a practice, which he believed to be in operation in the firm, "that files which had been finished to the extent that they had been settled or verdicts given, were only given to the managing clerk for payment of disbursements if the written or oral consent of the client had been obtained" (exhibit "3", paragraph 10).

Acting on that belief, the Solicitor authorised and signed the transfer cheque.

The Solicitor had no personal contact with Simpson as to the authority which was claimed to have existed, nor did he see any written authority signed by Simpson. Indeed, it was never claimed that a written authority had been obtained from Simpson. Nor was it claimed that Simpson had ever specifically authorised the withdrawal of trust money in satisfaction of costs and disbursements. The Solicitor relied on an implied authority said to have been given by Simpson in the course of discussions between Simpson and Woods.

The practice which was said to have been in operation in the firm will be dealt with later in this determination. Before dealing with that subject, the Tribunal will turn to the discussions between Simpson and Woods which the Solicitor claimed had given rise to an implied authority.

The first of those discussions took place on the first day of the hearing, on 8 May 1990. In fact there were two discussions on that day. The first took place in the chambers of the witness Curran, who had been briefed by Woods to represent Simpson. The second took place in a room at the court. In the discussions in chambers, Simpson and Curran were present for the whole of the time, while Woods was present for part of the time. In the discussions at court, Simpson and Woods were present for the whole of the time, while Curran was absent for a short time having left the room to discuss settlement negotiations with the other party to the proceedings. Much of the evidence as to these discussions was directed towards a document referred to by Woods as "a file note dated 4th May 1990 comprising an estimate of costs and fees" (exhibit "4", paragraph 15). Copies of that document (the file note) appeared as annexures to a number of the exhibits, and the original was ultimately tendered and admitted as exhibit "9". It was sought to establish on behalf of the Solicitor that the file note was presented to Simpson as an estimate of costs and disbursements for the purpose of obtaining his authority at that time for the withdrawal in due course from money to be received and held in trust for him in the event of the proceedings being successful. Unfortunately, however, the three people involved were not in agreement as to what actually occurred during the discussions relating to the file note. In fact they did not even agree that exhibit "9" was the document actually discussed. Woods and Curran identified exhibit "9" as the document which was discussed, but even from their evidence there was confusion as to the state of the document as to alterations and additions. Simpson claimed that the document shown to him was not exhibit "9". In doing so, he gave detailed evidence as to differences in form and content between exhibit "9" and the document he claimed he was shown.

Notwithstanding the confusion which arose in evidence in relation to the document, the Tribunal is of the view that the real issue to be determined is not so much the identity of the document itself, but whether or not the discussions which took place at the time gave rise to an implied authority by Simpson for the Solicitor to make the subject withdrawal from trust money.

The evidence of Woods as to the discussions which took place on that day did not, in the view of the Tribunal, support the claim of the Solicitor that an implied authority had been received from Simpson. For example in relating his version of the conversation on which he relied, in part, for the required authority, he said that Curran left the room for a discussion with the GIO, and that when he returned, Curran said: "They want us to make an offer'. He then said to me, What has to come out?'. I took the outline bill (the file note) that had been prepared in the office, from the file, and showed it to Mr Curran, Mr Curran amended his fees, I can't remember, and I really don't know, whether he increased or decreased those fees, but he then said words to the effect, These are my fees'. He then placed the outline bill, I think he placed it with the file in front of Mr Simpson, he said to Mr Simpson words to the effect, These sums will have to come out of any result in your favour'. Mr Simpson was then given some time to study the figures on the outline bill, I gained the impression that he had read the whole document, and then Mr Curran said to him words to the effect, Is that OK', Mr Simpson said, Yes, I want fifty or sixty thousand dollars clear to me.' Then Mr Curran responded with words to the effect, Well, we will have to make an offer of around $70,000' and left the room. My recollection is that shortly later he returned and said words to the effect, We won't be able to settle it, we should go and start the case now'." (T-65).

The evidence of the witness Curran, both in his declaration exhibit "5", and orally during the hearing of this matter, was of more help to the Tribunal. In the view of the Tribunal it did not support the Solicitor's claim that Simpson had given an implied authority, but it did assist the Tribunal to establish the true import of the discussions which took place on the day of the hearing.

In exhibit "5" Curran said: "I recall a conference which took place on the first day of the hearing namely 8th May 1990...I recall that Mr Woods and myself on that occasion discussed with the plaintiff offers to settle his claim...The plaintiff was not at all interested in any of them...However, the plaintiff's instructions were sought and obtained to put counter offers to the defendant...I believe that the said document was shown to him by me and I recall that the figures in the document were discussed with the plaintiff...I am satisfied that he appeared to understand his position before he gave instructions to myself and Martin Woods to put a counter offer to the defendant just before the case started" (exhibit "5", paragraphs 5 and 6).

In oral evidence before this Tribunal, in evidence in chief, Curran said: "I placed the sheet on top of the file which was in front of Mr Simpson and pointed to the document and said, `These are the amounts that have got to come out of any amount that you get' and from that point the conversation catapulted to what he wanted." "He said words to the effect, I think it was 50,000 to 60,000, I want 50,000 to 60,000 nett". I said "To clear that to you we will have to put an offer accordingly".

The following exchange then took place: "After you said `To clear that we will have to put an offer accordingly', do you remember if Mr Simpson said anything?"---"He may have said something, he may have said something briefly, I can't remember if he did or not".

Simpson maintained throughout that he did not give any authority at any time to withdraw trust money in satisfaction of costs and disbursements.

Having considered the evidence of the witnesses, and the manner in which they gave that evidence, as to the discussions which took place on 8 May 1990, the Tribunal is satisfied that no such authority as claimed by the Solicitor, either express or implied, was given by Simpson during the course of those discussions. The Tribunal is satisfied that the discussions were directed towards the settlement of Simpson's claim, and nothing more.

The second of the discussions relied upon by the Solicitor was a telephone discussion between Woods and Simpson which took place on or about 22 May 1990, shortly after judgment was handed down. As to that discussion, in his declaration exhibit "4" Woods said: "...I told him of the result and to expect to have to wait for about four weeks before he could expect payment and the defendant might be considering appealing. "I can recall Mr Simpson asking me with words to the effect - How much will I finally get?' I replied with words to the effect - The verdict is $91,000.00 but I do not know exactly how much you will get as money will have to come out for disbursements and our costs'. He then asked - Well, how much will I get?'. I replied with words to the effect - I don't know possibly somewhere between $60,000.00 - $70,000.00'." (exhibit "4". paragraphs 22 to 23).

In evidence before this Tribunal Woods said: "I firstly advised Mr Simpson that he had received a verdict in the sum of 91,000, whatever, I can't remember the exact amount. I said to him a verdict has been entered in your favour in the sum of 91,000', whatever, I said, I don't know the exact amount you will get because costs and disbursements will have to come out of that figure'. He said to me words to the effect, Well, how much will I get'. I said, I don't know, I guess around sixty to seventy thousand dollars, you will receive a bill with the money detailing all the disbursements which have come out of the verdict moneys'. I know (now) recall also saying to him, The GIO are considering appealing, we will know whether or not they appeal in approximately four weeks, but if they do appeal they will still have to pay the sum of $50,000'. I then said to him, The file will now be placed in the section that prepares the bills, Maureen will prepare the bill'."

In cross examination, the following exchange took place: "I am suggesting that you believed that he had given authority but that was only based on the conversations you had had?---Yes. "It was not based on Mr Simpson saying to you, yes, I understand that there are $20,000 worth of costs to come out and I authorise you to deduct those moneys before you give them to me, that never happened?---That never happened."

Again as to the discussion on 22 May 1990, Simpson maintained throughout that he did not give any authority at any time to withdraw trust money in satisfaction of costs and disbursements. As was to be expected, Simpson was cross examined at length on this point. Here are some extracts from that cross examination: "Your understanding was that you didn't have to pay until the end result, but when the end result was known you would then have to pay?---Via an account. "Your further understanding was, was it not, that the payment would be deducted from the proceeds of any judgment?---Yes. "So your understanding right at the outset was that although you didn't have to pay anything then, if a judgment were secured in your favour and payment made, that it would be necessary for you to pay at that time?---Via an account. "You keep saying via an account', but the words which were used to you were, Don't worry, you don't pay until the end result. You will get an account later'?---Yes. "I am suggesting to you that your belief, after this very early conversation with Mr Carter, was that it would be a possible result that at the same time as an account was sent to you the moneys identified in that account would be deducted from the judgment?---No. "And I suggest to you in those circumstances a likely result, in your mind, was that the deduction would be made at the time an account was sent to you?---With my authority." (T-29 to 31). In the conduct of the case for the Solicitor it was suggested that Simpson was not genuine in his complaint about the lack of authority and that his real complaint was about the quantum of the costs and disbursements. In pursuing this line, Simpson was referred to a letter dated 6 July 1990 addressed by him to "The Senior Partner" of the firm. He was asked: "And I suggest to you there is nothing there about a complaint that there was no authority to deduct anything?---Yes. "You don't say anything about authority?---Yes." However, in considering that evidence, it is necessary to look at the letter in question. It appears in exhibit "A" at pages 21 and 22. On page 22, Simpson said: "Without going into further lengthy correspondence in relation to your account, I note that you hold the sum of $17,500.00 on my account and request that you forward me an amended account taking into account the above comments." The Tribunal is satisfied from that and other related evidence that Simpson's evidence as to lack of authority was credible. As to the discussion which took place on 22 May 1990, the Tribunal is similarly satisfied that no such authority as claimed by the Solicitor, either express or implied, was given by Simpson during the course of that discussion.

As to the Solicitor's claimed reliance on a practice which he believed to be in operation in the firm, The Tribunal is satisfied on the evidence already dealt with above, that any such practice which might have existed was manifestly inadequate for the purpose for which it was apparently designed. That proposition was virtually conceded by the Solicitor during cross examination. He was questioned about the previously existing practice, and about the steps he had taken to tighten up the system: "What steps have you taken to tighten the system up so that this will not happen again?---There is now procedure in place where I have asked that there be written authority from the clients to transfer costs from trust to general in every case. In those exceptional cases where written authority cannot be obtained, but there is oral authority, I have asked that the firm write to the client echoing those instructions and the authority in the letter. There is also a further directive that no costs are to be transferred in those particular matters until there has been a specific direction from one of the partners.

"Do you think it may not have been prudent to have a system of that nature in place prior to this?---I wish it was." The inadequacies of the so-called system were further emphasised by the evidence of Woods, already referred to above, and by the declaration of Maureen Hickman (exhibit "6"), in which she said at paragraph 12 "Sometimes there would be a written authority from the client on file but this was not always so and I would have assumed that in the absence of a written authority that an oral authority had been obtained from the client. I did not then regard and never have regarded (until a change in my instructions in or about October 1991) the aspect of the client's authorisation to be my responsibility".

According to the Solicitor, he relied on a practice which provided a chain of events in which each staff member in the chain carried out an action or a check designed to ensure that appropriate authority existed for the transfer of trust money in payment of costs and disbursements. Sadly, as the evidence disclosed, at virtually no point in the chain was there any effective check. Furthermore, there was no evidence before the Tribunal that any steps had been taken from time to time to ensure that the practice was intact and operating effectively.

The Tribunal will now turn to the second issue for determination:

In considering this issue, the Tribunal has had regard to the principles relating to "wilful failure" dealt with in New South Wales Solicitors Manual - Riley at 4031, and particularly to in Re Mayes and Legal Practitioners Act [1974] 1 NSWLR 19. The Tribunal has applied those principles to the evidence given by and on behalf of the Solicitor.

In his evidence before this Tribunal, the Solicitor was cross examined as to his actions at the time he authorised and signed the transfer cheque in satisfaction of costs and disbursements: "You indicate that it is normally the practice to have specific written instructions or specific oral instructions?---Yes. "Did you make inquiries as to whether in this case there was either written instructions or specific oral instructions before you signed the cheque?---I remember talking to my clerical assistant, Maureen Hickman, who rang me in respect to the statement of account that she was preparing, but other than that there were no other conversations in respect to actual authority.

"Would it be fair to say that you relied on a practice from the solicitor handling the matter at the coal face, if I can put it that way, passing the material on to your accounts department and then on to you, as being an assurance that in fact the initial step of ensuring that the instructions had been taken, had been complied with?---Yes.

"And it was simply the procedure that you relied on in order to satisfy yourself that that had been done?---Yes." (T-52). It was clear from that exchange that the Solicitor made no inquiry to verify the existence of the required authority. In his declaration, exhibit "3", the Solicitor said: "I can recall, that in or about June 1990 a managing clerk Maureen Hickman, also used as a para-legal clerk, rang me in the lunch hour to ascertain what would be the professional costs that should be charged to Mr Simpson...I recalled that this was the file I had previously seen and inspected after a telephone call from Mr Simpson. To my knowledge the practice in Teakle Ormsby at this time and certainly on my floor was that files which had been finished to the extent that they had been settled or verdicts given, were only given to the managing clerk for payment of disbursements if the written or oral consent of the client had been obtained. The managing clerk on my floor who handles these matters is Linda Hanson. I was not aware of either the letter or the bill at the time they were sent. The firm accounts section then proceeded to transfer the outstanding costs payable by Mr Simpson from the firm's trust account to its office account...I signed the trust account cheque for $65,113.31 in favour of Martin Simpson." (exhibit "3", paragraphs 10 and 11).

The Tribunal notes that the telephone call referred to by the Solicitor in the last passage was a call in which Simpson expressed concern about the conduct of his claim and sought the Solicitor's assurance that the claim had been properly prepared for trial.

The Solicitor continued: "In July 1990, Martin Woods informed me during an incidental conversation that he had received a letter from Mr Simpson querying items included in the firm's memorandum of costs and disbursements. A copy of that letter, which is dated 6 July 1990 appears at pages 21 and 22 of the Complaint filed herein. At the relevant time I knew nothing else about the letter...In August 1990 Martin Woods came to me and informed me and I verily believed that he had received another letter disputing the firm's memorandum of costs and disbursements in the Martin Simpson proceedings...The question as to authority to pay those costs was to the best of my recollection never raised with me at that time." (exhibit "3", paragraphs 12 to 14).

Here then was a situation in which the Solicitor had knowledge of two complaints by Simpson about costs and disbursements, the second of those being from a firm of Solicitors acting for Simpson. These two complaints followed an earlier expression of concern by Simpson about the conduct of his claim by the firm. The Solicitor was the partner in the firm handling the Simpson matter, and yet he did nothing to investigate the problem further, other than to pass the problem over to Woods. It was in these circumstances that the Law Society arrived on the scene. The Solicitor continued in his declaration exhibit "3": "I refer to the letter dated 26 October 1990 from the Law Society addressed to me...I received that letter at or about the date as appears on it and read it...I called Martin Woods down to my room and I handed him the letter and asked him to reply as I had no knowledge of the specific allegations raised in the letter...In late December 1990 the firm received a letter from the Law Society dated 17 December 1990...Although the letter is addressed to me, I did not see it when it arrived at the firm...I was in the United States from 25 December 1990 to 29 January 1991 and in my absence the letter went to Martin Woods. I note that the letter seeks a response to a letter addressed to me from the Law Society dated 20 November 1990...I have attempted to locate this letter without any success. I certainly remember receiving letters from the Law Society and was in the office at the relevant time, however, I did not see that earlier letter until a copy was later provided for me by the Law Society." (exhibit "3", paragraphs 16 and 17). The Tribunal notes that the letter from the Law Society dated 26 October 1990 (exhibit "A", annexure "B") was clear and unequivocal that there was a complaint about unauthorised deduction from trust money. The letter from the Law Society dated 20 November 1990 (exhibit "A", annexure "D") sought confirmation from the Solicitor "that those monies do indeed remain in your Trust account". The letter from the Law Society dated 17 December 1990 (exhibit "A", annexure "E") sought a reply to the letter dated 20 November 1990. Those letters were all addressed to the Solicitor personally. During the course of the last-mentioned correspondence, the firm wrote two letters to the Law Society dated 7 November 1990 (exhibit "A", annexure "C"), and 22 January 1991 (exhibit "A", annexure "F"). Both those letters carried the reference of Woods. There was no response in the first of those letters to the allegation of unauthorised deduction from trust money, nor was there a response in the second of those letters to the Law Society's request for confirmation "that those monies do indeed remain in your Trust account". The Tribunal notes that the second of those letters informed the Law Society "that the dispute between Mr Simpson and ourselves, has been resolved...". There does not appear to have been any appreciation that by that time the matter had become a question of professional conduct under examination by the Law Society.

There was further correspondence from the Law Society to the Solicitor, and the Solicitor then responded by letter dated 10 April 1991 (exhibit "A", annexure "I"). In that letter he expressed his view that the matter had been settled and "that this complaint had been formerly (sic) withdrawn from the society". However, he failed to respond to the earlier request for confirmation "that those monies do indeed remain in your Trust account".

Following further correspondence, the Solicitor wrote to the Law Society by letter dated 13 May 1991 (exhibit "A", annexure "K"). In that letter he said "We now understand that the essence of the complaint is that we deducted our costs without obtaining authority from our client", and he again stated his view that "The whole matter was subsequently amicably sorted out". Once again, however, he failed to respond to the request for information as to the whereabouts of the trust money.

The Tribunal notes that the Solicitor had clear notice of "the essence of the complaint" as far back as the letter to him from the Law Society dated 26 October 1990, which stated: "the complainant claims that: 1. You have, without his authority, deducted costs and disbursements from the monies received from the District Court proceedings." The Solicitor acknowledged, in his declaration (exhibit "3") that "I received that letter at or about the date as appears on it and read it".

On 15 May 1991 the Solicitor, prompted by a telephone call from the Law Society, provided a copy of the trust account ledger. The Law Society was then, for the first time, able to determine positively what had happened to the trust money, notwithstanding that it had first given notice to the Solicitor of the "essence of the complaint" in its letter to him dated 26 October 1990, and had specifically sought that information as far back as its letter to the Solicitor dated 20 November 1990.

In considering the foregoing correspondence and events in some detail, the Tribunal has been guided by the principle that it is "essential in an enquiry as to whether there have been wilful breaches by a solicitor...to examine the facts and circumstances relevant to his state of mind, knowledge and intention at the material dates" (in Re Hodgekiss (1962) 62 SR (NSW) 340).

Having examined the facts and circumstances surrounding this matter, the Tribunal is satisfied that the conduct of the Solicitor was sufficiently careless and reckless as to constitute wilful failure on his part.

After considering all the facts given in evidence, and the manner in which the witnesses gave their evidence, the Tribunal is satisfied: 1. That the Solicitor contravened the relevant provisions of Section 61 of the Legal Profession Act 1987 and of Regulation 8 of the Legal Profession (Trust Accounts and Controlled Money) Regulation 1988 by withdrawing trust money in satisfaction of costs and disbursements without being so authorised by his client. 2. That the conduct of the Solicitor was such as to amount to a wilful contravention within the meaning of Section 61(7) of the Act. 3. That the conduct of the Solicitor amounted to professional misconduct.

Orders In determining the orders which should be made, the Tribunal has taken into account the circumstances surrounding the events giving rise to the complaint, and the evidence as to the character of the Solicitor.

There was no evidence of dishonesty on the part of the Solicitor. Indeed, dishonesty was not even alleged. His good character and his high standing in the community were supported by many declarations admitted in evidence on his behalf. There was no evidence to suggest that he was not fit to continue in practice as a solicitor. While those matters certainly come to the Solicitor's aid on the question of the orders which should be made, the Tribunal is bound to consider the serious nature of the complaint. The legislature has seen fit to impose stringent requirements on the handling of trust money by solicitors, and for good reason. The Act goes so far as to declare certain breaches to be professional misconduct, and the subject breach is one of them. Consequently the Tribunal is of the view that the subject breach is not one which should be taken lightly, and it has reflected this view in the orders to be made.

The Tribunal therefore orders: 1. That the Solicitor pay a fine of $5,000.00 within thirty days from this date. 2. That in default of compliance with Order 1 hereof the Solicitor's practising certificate be cancelled and that a practising certificate not thereafter be issued to the Solicitor until he has complied with such order. 3. That the Solicitor pay the costs of the Complainant, such costs to be assessed on a solicitor and client basis as if taxed in the Supreme Court of New South Wales. 4. That in respect of Order 3 hereof, either party to have liberty to apply.

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.