The Prothonotary of the Supreme Court of New South Wales v Dimitrious

The criminal proceedings against the respondent

1. Sixteen charges were brought in relation to the respondent's dealings with nine clients of the practice. Those charges were with respect to conduct occurring between 13 March 2008 and 22 February 2011. That last date, notably, is after the Law Society appointed a manager to the respondent's practice, after a receiver had been appointed by the Court, and after the respondent had been formally notified of those appointments.
2. On 20 February 2013 the respondent pleaded guilty to each of those charges. The offences are listed below and, with the exception of the offence numbered 16, are in chronological order by reference to each of nine clients whose funds were misappropriated. The descriptions in square brackets have been added to assist in an understanding of the nature of the relevant conduct. They are taken from facts admitted by the respondent for the purpose of this proceeding: 1. Contrary to s 178A of the Crimes Act 1900 (NSW), on 13 March 2008 at Earlwood did fraudulently misappropriate to his own use certain money, to wit, the sum of $43,244.00 in violation of the terms on which he the said James Dimitrious so received the said money, the said James Dimitrious having received the said money upon terms requiring him [to pay stamp duty due on the purchase of a property by Client 1]. 2. Contrary to s 300(2) of the Crimes Act 1900, on 30 April 2009 at Earlwood did use an instrument, to wit, Certificate of Confirmation of Stamping which was, and which the said James Dimitrious knew to be false, with the intention of inducing another person [the daughter of Client 1] to accept the instrument as genuine and because of that acceptance [not to pursue inquiries as to whether stamp duty had been paid]. 3. Contrary to s 178A of the Crimes Act 1900, on 10 September 2008 at Earlwood did fraudulently misappropriate to his own use certain money, to wit, the sum of $311,500.00 in violation of the terms on which he the said James Dimitrious so received the said money, the said James Dimitrious having received the said money upon terms requiring him [to pay that money into the practice trust account to be held for Client 2 in relation to the purchase of a property]. 4. Contrary to s 178A of the Crimes Act 1900, between 10 September and 30 November 2008 at Earlwood did fraudulently misappropriate to his own use certain money, to wit, the sum of $32,500.00 in violation of the terms on which he the said James Dimitrious so received the said money, the said James Dimitrious having received the said money [as the deposit paid on a property being sold by Client 3]. 5. Contrary to s 300(2) of the Crimes Act 1900, between 1 May and 31 May 2009 at Earlwood did use an instrument, to wit, covering page of 'contract for sale' which was, and which the said James Dimitrious knew to be false, with the intention of inducing [Client 3 to believe that the amount of the deposit was being held by a selling agent]. 6. Contrary to s 300(2) of the Crimes Act 1900, between 1 July 2008 and 31 July 2009 at Earlwood did use an instrument, to wit, 'Century 21' facsimile which was, and which the said James Dimitrious knew to be false, with the intention of inducing [Client 3 to believe that the amount of the deposit was being held by a selling agent]. 7. Contrary to s 300(2) of the Crimes Act 1900, between 1 July 2008 and 31 July 2009 at Earlwood did use an instrument, to wit, a letter [authorising the agent to account for the deposit] which was, and which the said James Dimitrious knew to be false, with the intention of inducing [Client 3 to believe that the amount of the deposit was being held by a selling agent]. 8. Contrary to s 300(2) of the Crimes Act 1900, between 1 July 2008 and 31 July 2009 at Earlwood did use an instrument, to wit, letter to [Client 3] dated 25 September 2008 which was, and which the said James Dimitrious knew to be false, with the intention of inducing [Client 3 to believe that the amount of the deposit was being held by a selling agent]. 9. Contrary to s 300(2) of the Crimes Act 1900, between 1 July 2008 and 31 July 2009 at Earlwood did use an instrument, to wit, a letter to [a selling agent] dated 25 September 2008 which was, and which the said James Dimitrious knew to be false, with the intention of inducing [Client 3 to believe that the amount of the deposit was being held by a selling agent]. 10. Contrary to s 178A of the Crimes Act 1900, on 28 August 2008 at Earlwood did fraudulently misappropriate to his own use certain money, to wit, the sum of $11,510.00 in violation of the terms on which he the said James Dimitrious so received the said money, the said James Dimitrious having received the said money upon terms requiring him to pay the same to [Client 4 as the proceeds of the settlement of a money claim]. 11. Contrary to s 178A of the Crimes Act 1900, on 17 October 2008 at Earlwood did fraudulently misappropriate to his own use certain money, to wit, the sum of $23,800.00 in violation of the terms on which he the said James Dimitrious so received the said money [as the deposit received whilst acting for Client 5 on the sale of his property]. 12. Contrary to s 178A of the Crimes Act 1900, on 28 October 2009 at Earlwood did fraudulently misappropriate to his own use certain money, to wit, the sum of $25,010.00 in violation of the terms on which he the said James Dimitrious so received the said money [as the deposit paid to Client 6 as vendor of a property]. 13. Contrary to s 192E(1)(b) of the Crimes Act 1900, between 21 June 2010 and 27 January 2011 at Earlwood did, by deception, that is by misappropriation of practice trust funds, cause a financial disadvantage, to wit, $619,724.45 [by paying monies held for Client 7 into the practice trust account rather than into an interest bearing account so as to prevent that trust account from being overdrawn in May, June and July 2010]. 14. Contrary to s 192E(1)(b) of the Crimes Act 1900, between 6 June 2010 and 6 June 2011 at Earlwood did, by deception, that is by misappropriation of practice trust funds, dishonestly obtain a financial advantage and cause a financial disadvantage, to wit … $183,120.80 [to Client 8, on whose behalf the respondent acted in relation to a property sale, and which is the net amount of the trust monies of that client which were misappropriated]. 15. Contrary to s 253(b)(ii) of the Crimes Act 1900, on 22 February 2011 at Earlwood did, make a false document, to wit, a document headed 'Memorandum of Instructions' dated 22 February 2011 intending it to be used to induce [the solicitor to whom client files had been transferred on the appointment of a receiver to the respondent's practice] to accept it as genuine, and, because of it being accepted as genuine to obtain a financial advantage [being that it would not be discovered that the stamp duty due on the purchase of a property by Client 8 had not been paid and that those funds had been misappropriated]. 16. Contrary to s 192E(1)(b) Crimes Act 1900, between 21 June 2010 and 27 January 2011 at Earlwood did, by deception, that is by misappropriation of practice trust funds, cause a financial disadvantage, to wit, $11,240.00 [to Client 9 by misappropriating funds held for him as the stamp duty payable on a business sale to pay land tax on a property purchased by the respondent].
3. It is apparent that during the relevant period from March 2008 to February 2011 the respondent used his clients' funds for his own benefit. He did so by misapplying funds that should have been paid into the practice trust account and by withdrawing money from that trust account other than in accordance with the directions of the person on whose behalf it was held. That conduct involved breaches of ss 254 or 255 of the Legal Profession Act 2004. He also prepared false documents and trust records to conceal his dishonesty and the discrepancies in the trust account. That conduct, as the respondent conceded to the psychiatrist qualified to express an opinion about his depressive illness, was motivated by self-interest. The psychiatrist's report recorded: Mr Dimitrious said that he transferred about $850,000 to cover a temporary inability to finance his loans, which he intended to fully repay after refinancing or selling property. He said that he had exhausted all other avenues of obtaining credit at the time and the alternative was bankruptcy, which would have greatly disadvantaged the clients who relied on him.
4. It is also significant that the conduct was not discovered as a result of any self-reporting on the part of the respondent. The circumstances in which it was discovered were also the subject of an observation in that psychiatrist's report: [Mr Dimitrious] said that his problems had come to the attention of the Law Society as a result of an independent audit of his trust accounts. He said that he had been able to cut and paste statements printed from the internet in order to conceal the discrepancies, but a solicitor he had employed on a temporary basis became aware of the shortfall and notified the Law Society, which launched a further investigation.

The sentencing proceedings

1. Following his conviction of the offences described above on 20 February 2013, Local Court Magistrate Schurr sentenced Mr Dimitrious to a total sentence of 2 years and 6 months imprisonment to commence on 20 February 2013, with a non-parole period of 2 years expiring on 19 February 2015. (Appeal proceedings brought by Mr Dimitrious in respect of those convictions were dismissed and the above sentence confirmed. As a result of his having been on bail pending the determination of those proceedings, Mr Dimitrious is not eligible for release on parole until 8 April 2016.)
2. In her remarks on sentence, the learned Magistrate made the following findings, which are not disputed: The figures cited in the charges amount to 1.9 million dollars, although, it has been put on behalf of Mr. Dimitrious that these charges involve double counting, that the amount actually defrauded was actually 1.1 million dollars. The victims of the fraud were 8 [sic] of Mr. Dimitrious' clients and the Law Society's fidelity fund has paid about 1.136 million dollars, to various of Mr. Dimitrious' clients. … One of the charges involved actions taken after Mr. Dimitrious practising certificate was suspended and the practice was taken over by the law society on 31st January 2011 and that was sequence 15 an offence committed on or about the 22nd February 2011. … ... There is substantial case law in support of the submission that only a full time custodial sentence is appropriate in a case where a professional entrusted with clients money has defrauded them of that money in a manner designed to hide the misappropriation from them, and where the fraud is later discovered by an outside agency. … He has shown remorse as evidenced in the character references and reparation has been made to the victims with the sale of his assets by the receiver appointed by the law society, so I take into consideration Mr. Dimitrious' depressive illness as evidenced by the psychiatric and medical reports, take into consideration the support Mr Dimitrious has given to his elderly and incapacitated parents …
3. In relation to the offence numbered 15 as referred to above, the learned Magistrate recorded: So Mr Dimitrious has pleaded guilty to having on the 22nd February 2011 created a false document in the name of one of the victims [Client 8] purporting to give instructions about the payment of monies, listing her address which was in fact his, and this documents purpose was to limit the appearance of criminality on the part of Mr Dimitrious …

Not a fit and proper person to remain on the roll

1. The Prothonotary relies upon the fact of these convictions and sentences and the conduct underlying them as sufficient to justify a conclusion that Mr Dimitrious is not a fit and proper person to remain on the roll of lawyers. That submission is not contested and must be accepted.
2. Over a period of almost three years the respondent misappropriated clients' funds and sought to conceal that conduct by the creation of false documents and accounts. His doing so was careful, planned, not isolated and no doubt targeted clients who were least likely to discover what was going on. That conduct only came to an end when a junior solicitor in the practice notified the Law Society of a shortfall in the general trust account.
3. Legal practitioners are expected to act and must act with scrupulous honesty when discharging their obligations generally, and specifically with respect to the receipt and payment of monies on behalf of clients. There is an unqualified expectation that they adhere to those standards. The position was stated plainly by Ipp JA in Barwick v Council of the Law Society of New South Wales [2004] NSWCA 32; Aust Torts Reports 81-730 at [118]: … The trust and confidence which clients place in their solicitors are a basic element of the administration of justice in this country. Violations by legal practitioners of trust accounts betray that trust and harm public confidence in the legal system. This explains the sacrosanct nature of trust accounts and the acute concern that courts have when practitioners, in breach of their fiduciary obligations, misuse trust moneys for their own benefit. There have been many statements to a similar effect. See, for example, Law Society of New South Wales v Bannister [1993] NSWCA 157; 4 LPDR 24 at 30 (per Sheller JA); Johns v Law Society of New South Wales [1982] 2 NSWLR 1 at 15 (per Moffitt P); Prothonotary of the Supreme Court of New South Wales v Da Rocha [2013] NSWCA 151 at [16] (per Ward JA).
4. The respondent's conduct was inconsistent with his possessing qualities of honesty and integrity and a willingness to comply with the law. It also reveals a preparedness to prefer and pursue self-interest and financial gain at the expense of those qualities, which is incompatible with the standards and behaviour required of a legal practitioner. In these respects Mr Dimitrious' conduct reflects adversely on his character and, accordingly, on his fitness to remain on the roll.
5. The fact of his conviction of the various offences also involves a loss by him of the standing, before the Court and public, which must belong to those entrusted with the privileges, duties and responsibilities of a member of the legal profession. In that respect the fact of his conviction and the sentence imposed reflect adversely on his fame and, for that reason, also on his fitness to remain on the roll.
6. The respondent's misconduct was engaged in directly in the course of his practice. It was plainly "professional misconduct" as that expression is used in s 497(1) of the Legal Profession Act 2004, and more relevantly in a case where the Court is exercising its inherent jurisdiction, was conduct contrary to that expected of members of a profession closely involved in the due administration of justice.
7. It remains to be considered whether the respondent is presently not a fit and proper person. His conduct occurred during a period ending more than four years ago. Reference was made in the course of submissions to matters that were relied on in mitigation of his offending. They included his depressive illness and the fact that a close senior colleague and mentor became seriously ill and subsequently died during the period of offending. It was also pointed out that the respondent had co-operated with the Law Society investigators and, through the sale of his properties, made full reparation of the monies that had been misappropriated. This last submission must, however, be considered in light of the offence committed in February 2011 which, as the learned Magistrate found, was directed to misleading the Law Society investigators by limiting the appearance of the extent of his criminality after supervision of his practice had begun.
8. However, none of these matters is relied on in support of a submission that the respondent has reformed his character to such an extent that he is presently a fit and proper person to remain on the roll. Specifically, it is accepted that his criminal and other misconduct still speaks as to his present character and fitness to practise. Nor could it be suggested otherwise when the respondent, because of his circumstances, is not able to say that by his conduct over a number of years since his offending he has demonstrated that he is in relevant respects a "different man": see Health Care Complaints Commission v Litchfield (1997) 41 NSWLR 630 at 637 (approving what was said earlier by Walsh JA in Ex parte Tziniolis at 460-461).

Proposed orders and declarations

1. It is appropriate that this Court makes declarations as to the respondent having engaged in professional misconduct; as to his not presently being of good fame and character; and as to his not being a fit and proper person to remain on the roll. The fact of such declaratory relief, as was said in A Solicitor v Council of the Law Society of New South Wales [2004] HCA 1; 216 CLR 253 at [15], may be of importance for the information of others and relevant to future proceedings for his re-admission as a lawyer.
2. By way of summary, the respondent has been guilty of serious professional misconduct involving gross dishonesty. That conduct reveals deficiencies of character which demonstrate a present unfitness to practise. The fact that he engaged in that conduct and the fact of the ensuing convictions also reflect on the respondent's standing, general reputation and fame and for that reason also make him unfit to practise.
3. That being the position the public interest is addressed by the Court making the following declaration and orders which I propose be made:
4. Declare that James Dimitrious: (a) having pleaded guilty to 16 criminal offences comprising one count of making a false document to obtain a financial advantage; five counts of fraudulent misappropriation of amounts exceeding $15,000; six counts of using a false instrument; one count of fraudulent misappropriation of an amount between $500 and $15,000; and three counts of dishonestly obtaining a financial advantage by deception; (b) having engaged in the conduct which was the subject of those offences in the period between 13 March 2008 and 22 February 2011 whilst carrying on a legal practice under the name "James Lawyers Solicitors & Attorneys"; and (c) having been sentenced to an overall term of imprisonment of 2 years and 6 months with a non-parole period of 2 years for those offences, is not a fit and proper person to remain on the roll of lawyers of the Supreme Court of New South Wales.
5. Order that the name of James Dimitrious be removed from the roll of lawyers of the Supreme Court of New South Wales.
6. Order that the respondent pay the applicant Prothonotary's costs of these proceedings.
7. LEEMING JA: I agree with Meagher JA.

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