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

Court of Appeal (NSW)|2011-12-08|Before: Campbell JA, Young JA, Mr P

Judgment 1CAMPBELL JA: I agree with Sackville AJA. 2YOUNG JA: I agree with Sackville AJA. 3SACKVILLE AJA: By an amended summons filed on 1 August 2011, the Claimant seeks the following declarations and order against the Opponent: "1. A declaration that the Opponent is guilty of professional misconduct in that he engaged in conduct between 30 September 1994 and 18 May 1995, for which he was convicted in the District Court of New South Wales of nine indictable offences, on 18 December 2002, namely: (i) four counts offences of knowingly and dishonestly with intent to gain advantage made improper use of position as a company officer, contrary to ss 232(6) and 1317FA(1) of the Corporations Law 1991 (NSW), being offences under the Corporations Act 2001 (Cth) by virtue of s 1401 of the Corporations Act 2001 (Cth); and (ii) three counts of offences of dishonestly obtain valuable things, contrary to s 178BA of the Crimes Act 1900 (NSW); and iii) two counts of offences of make false misleading statement with intent to obtain valuable thing, contrary to s 178BB of the Crimes Act 1900 (NSW). 2. A declaration that the Opponent is not a person of good fame and character. 3. A declaration that the Opponent is not a fit and proper person to remain on the Roll of Legal Practitioners of the Supreme Court of New South Wales. 4. An order that the name of the Opponent be removed from the Roll of Legal Practitioners of the Supreme Court of New South Wales." 4The Opponent was represented at the hearing in this Court by a solicitor, Mr Fitzgerald, who did not oppose the making of the declarations and the order sought by the Claimant. However, Mr Fitzgerald submitted that the Court should not make findings adverse to the Opponent on each of the particulars relied on by the Claimant in the amended summons.

Statement of Agreed Facts 11The background to the present application can be stated by reference to a Statement of Agreed Facts which was admitted in evidence "1. The Opponent was admitted to the local roll of lawyers for the State of New South Wales on 14 February 1969 and presently remains on that roll. 2. Between 14 February 1969 and 2002 the Opponent practised as a solicitor in the State of New South Wales. 3. Between 30 September 1994 and 18 May 1995, the Opponent was charged with nine criminal offences pursuant to the Crimes Act 1990 (NSW) and the Corporations Law 2001 (Cth), as follows: (i) Between 23 December 1994 and 13 February 1995 at Sydney in the State of New South Wales, while an officer of Nambucca Investments Pty Limited ('Nambucca') within the meaning of sections 232(1) and 60(1)(b) of the Corporations Law 2001 the Opponent did knowingly and dishonestly and intending to gain, directly or indirectly, an advantage for himself and or Snoco Limited ('Snoco') make improper use of his position as such an officer by causing Nambucca to pay the sum of $50,000 to Snoco contrary to sections 232(6) and 1317FA(1) of the Corporations Law 2001 by section 1401 of that Act ('Count 1'). (ii) Between 23 December 1994 and 13 February 1995 at Sydney in the State of New South Wales, while an officer of Lawnkin Pty Limited ('Lawnkin') within the meaning of sections 232(1) and 60(1)(b) of the Corporations Law 2001 the Opponent did knowingly and dishonestly and intending to gain, directly or indirectly, an advantage for himself and or Snoco Limited ('Snoco') make improper use of his position as such an officer by causing Lawnkin to pay the sum of $50,000 to Snoco contrary to sections 232(6) and 131FA(1) of the Corporations Law 2001 by section 1401 of that Act ('Count 2'). (iii) Between 23 December 1994 and 13 February 1995 at Sydney in the State of New South Wales, while an officer of Lawnkin Pty Limited ('Lawnkin') within the meaning of sections 232(1) and 60(1)(b) of the Corporations Law 2001 the Opponent did knowingly and dishonestly and intending to gain, directly or indirectly, an advantage for himself and or Snoco Limited ('Snoco') make improper use of his position as such an officer by causing Lawnkin to pay the sum of $13,324.27 to Snoco contrary to sections 232(6) and 1317FA(1) of the Corporations Law 2001 by section 1401 of that Act ('Count 3'). (iv) Between 10 February 1995 and 13 February 1995 at Sydney in the State of New South Wales, while an officer of Teamcask Pty Limited ('Teamcask') within the meaning of sections 232(1) and 60(1)(b) of the Corporations Law 2001 the Opponent did knowingly and dishonestly and intending to gain, directly or indirectly, an advantage for himself and or Snoco Limited ('Snoco') make improper use of his position as such an officer by causing Teamcask to pay the sum of $51,577.73 to Snoco contrary to sections 232(6) and 1317FA(1) of the Corporations Law 2001 by section 1401 of that Act ('Count 4'). (v) On 30 September 1994 at Sydney in the State of New South Wales, the Opponent dishonestly obtained from Lawnkin Pty Limited ('Lawnkin') for himself or Snoco Limited valuable things, namely two bank cheques dated 30 September 1994 in the amounts of $100,000 and $200,000 respectively drawn in favour of Lawnkin and endorsed at the request of the Opponent in favour of Helliars City Trust Account, by deception, namely by falsely representing to Phillip Clark Hall that the Equitable Group of companies had agreed to take over Nambucca Investments Pty Limited ('Nambucca') and certain nominated subsidiaries by confirming that the Equitable Group of companies had made an irrevocable offer to purchase all of the shares of the Nambucca group of companies exclusive of Wetercraft Pty Ltd, F & H Bennett Pty Ltd and Spectrum Marketing Pty Ltd and that he the Opponent required the sum of $300,000 to extend his option to buy out the other major shareholder in the Equitable Group of companies, at a time when the Equitable Group of companies had not agreed to take over Nambucca and had made no such offer contrary to section 178BA Crimes Act 1900 ('Count 5'). (vi) On about 8 March 1995 at Macksville in the State of New South Wales with intent to obtain for Nambucca Investments Pty Ltd ('Nambucca') money, namely the sum of $130,000 standing to the credit of Kevin and Roselyn Forbes in the JG & JG Florent trust account the Opponent made a statement to Roselyn and Kevin Forbes which he knew to be false or misleading in a material particular, namely that the same sum would be guaranteed by the Equitable Group of companies, that the Equitable Group was taking over Nambucca and that the Equitable Life Insurance Company prospectus would apply to the investment, contrary to section 178BB Crimes Act 1900 ('Count 6'). (vii) On 5 May 1995 at Coffs Harbour in the State of New South Wales the Opponent dishonestly obtained from Betty Bohannon for Nambucca Investments Pty Limited ('Nambucca') a valuable thing, namely a cheque in the sum of $20,000 drawn on the account of V & B Bohannon at Advance Bank, North Sydney, by deception, namely by falsely representing to Betty Bohannon that the said sum of $20,000 would be invested pursuant to a prospectus in Equitable Life Insurance Company Ltd ('Equitable Life') for the purchase of insurance bonds, at a time when the defendant knew that no investment would be made in insurance bonds in Equitable Life contrary to section 178BA Crimes Act 1900 ('Count 7'). (viii) On 18 May 1995 at Macksville in the State of New South Wales the Opponent dishonestly obtained from Roselyn and Kevin Forbes for Nambucca Investments Pty Limited ('Nambucca') a valuable thing, namely a cheque in the sum of $30,000 drawn at the Opponent's request in favour of Nambucca, by deception, namely by falsely representing to Roselyn and Kevin Forbes that the said sum would be invested in an Equitable super fund and that the money invested in Nambucca was guaranteed by the Equitable Group and that the Equitable Group and Nambucca Limited were one and the same, at a time when no company within the Equitable Group of companies had a super fund available for investment by members of the public, and at a time when money invested in Nambucca would not be guaranteed by the Equitable Group and at a time when the Equitable Group had not taken over Nambucca contrary to section 178BA Crimes Act 1900 ('Count 8'). (ix) On about 18 May 1995 at Macksville in the State of New South Wales with intent to obtain for Nambucca Investments Pty Ltd ('Nambucca') money, namely the sum of $88,717.56 being the proceeds of 3 cheques being redemption monies from Prudential Corporation Australia Limited in the sum of $39,757.26, $27,609.21 and $21,351.09 the Opponent made a statement to Roselyn and Kevin Forbes which he know to be false or misleading in a material particular, namely that money invested in Nambucca was guaranteed by the Equitable Group and that the Equitable Group and Nambucca were one and the same contrary to section 178BB Crimes Act 1900 ('Count 9'). 4. On 23 September 2002, the Opponent appeared in the District Court of New South Wales before his Honour Dodd DCJ ('the trial judge') and a jury and entered pleas of not guilty in respect of each of the nine counts above and was put upon his trial. 5. In the course of the trial, the Opponent gave sworn evidence positively denying his guilt. At the conclusion of the trial on 2 December 2002 the Court, by the jury's verdict, found the Opponent guilty of each of the nine counts. 6. On 18 December 2002, the Opponent was sentenced by the trial judge to terms of imprisonment in respect of each count, the overall effect and structure of the sentences being a term of imprisonment of six years and an effective non-parole period of four and a half years. ... 16. After being convicted and sentenced in respect of the nine counts referred to in paragraph 1 herein, the Opponent appealed against both his convictions and sentences to the New South Wales Court of Criminal Appeal. 17. The Opponent's appeals were heard and on 1 December 2003 each of the appeals was dismissed. (Leave having been granted to appeal against sentence.) The grounds of appeal did not include any reference to any alleged sleeping by the trial judge. 18. The Opponent's subsequent application for special leave to appeal to the High Court of Australia was heard and refused on 10 December 2004. 19. On 16 April 2007 the Federal Minister for Justice and Customs, pursuant to s 77(1)(b) of the Criminal Appeal Act [1912], referred Counts 1-4 to the Court of Criminal Appeal to be dealt with as an appeal under the Crimes (Appeal and Review) Act [2001]. On 1 August 2007 the Attorney General for the State of New South Wales made a like referral of Counts 5-9. 20. On 21 May 2007 Mr Fitzgerald, the Opponent's solicitor ... indicated that the Opponent had signed an undertaking not to practise or seek to practise as a legal practitioner and stated that the original undertaking would be filed as soon as he had received it. 21. On or about 24 May 2007 the undertaking signed 18 May 2007 by the Opponent was filed with [the] Court. 22. On or about 15 December the Opponent's appeal in relation to all counts, following the referrals set out ... above, was heard by the Court of Criminal Appeal. ('The Opponent's second appeal'.) One of the grounds of the second appeal related to the Opponent's assertion that the judge had been asleep at various times during the trial. 23. On 6 May 2011, the Court of Criminal Appeal dismissed the Opponent's second appeal."

REASONING 12The authorities establish that convictions for serious offences, such as those involving dishonesty, are relevant to the question of fitness for legal practice and may be themselves capable of demonstrating unfitness to practice law. However, convictions are not necessarily determinative of this issue: Ziems v The Prothonotary of the Supreme Court of New South Wales [1957] HCA 46; 97 CLR 279, at 288, per Fullager J. It is open to the Court to consider the circumstances that led to the convictions in order to determine whether the practitioner is a fit and proper person to remain on the Roll. 13In the present case the Opponent, while recording that he still disputes matters alleged against him and in respect of which he was convicted, has not sought to challenge the basis of the convictions. Nor has he adduced evidence to suggest that his conduct was not as serious as the convictions and lengthy prison term imposed at his criminal trial suggest. 14The first nine particulars on which the Claimant relies in effect reproduce the nine offences for which the Opponent was convicted. Evidence of the convictions can be admitted and used against the Opponent in these proceedings: Evidence Act 1995, s 92(2), (3) (providing that the hearsay and opinion rule does not apply to the evidence so admitted), Dictionary (definition of " civil proceedings "). 15Each of the convictions was in respect of a serious offence involving dishonesty. Although the Opponent continues to dispute the particulars of the charges on which he was convicted (as recorded in the Agreed Statement of Facts), he has not in these proceedings sought to establish that he was wrongly convicted or that the conduct which led to his conviction did not involve serious and sustained dishonesty. 16None of the charges on which the Opponent was convicted specifically alleges that he acted dishonestly in his capacity as a solicitor. However, the allegations made against the Opponent, which the jury appears to have accepted, include conduct in his capacity as a solicitor. The Statement of Agreed Facts sets out the allegations made by the Crown in the criminal proceedings against the appellant. 17Count 6 alleged, among other things, that:

Mr and Mrs Forbes appointed the Opponent as their solicitor to advise on superannuation and to act on their behalf;
the Opponent used his position as the Forbes' solicitor to dishonestly obtain money from them for the benefit of Nambucca; and
the Opponent thereby breached his duty as their solicitor. 18Count 7 alleged, among other things, that:
Mr and Mrs Bohannes appointed the Opponent as their solicitor to advise on their superannuation and investment affairs and to act on their behalf;
Mr and Mrs Bohannes instructed the Opponent to invest certain moneys in insurance bonds;
acting as a solicitor, the Opponent knowingly and dishonestly acted contrary to his clients' instructions;
the Opponent transferred the Boahnnes' moneys into Nambucca's account, and
the Opponent dishonestly preferred his own interests to those of his clients. 19Counts 8 and 9 made allegations concerning moneys dishonestly obtained from the Forbes that were very similar to the allegations made in Count 6 (except for the sums involved). 20The evidence establishes that the Opponent engaged in the conduct alleged in the nine charges for which he was convicted. That conduct has been set out at [11] above. The Opponent's conduct involved serious acts of dishonesty which were committed over a period of approximately eight months. Even if the acts of dishonesty had not directly related to the Opponent's practice as a solicitor they would demonstrate his unfitness to practice. They show that he repeatedly obtained financial advantages dishonestly and to the detriment of other people, including some who had reposed trust in him. As was said in Ex parte Macaulay , in a passage adopted by Sheller JA in Law Society v Bannister , a solicitor who has been found guilty of theft (as in effect is the case with the Opponent) ordinarily must be removed from the Roll and, save in exceptional circumstances, is not to be allowed again to hold himself or herself out as a solicitor in whom confidence might be reposed. 21The appellant's convictions are sufficient to compel this Court to make the declarations and order sought by the Claimant. However, the evidence supports a finding that some of the conduct for which the appellant was convicted was committed in his capacity as solicitor for the victims. In particular, the dishonest conduct which led to the Opponent's convictions on Counts 6, 7, 8 and 9 was committed in his capacity as solicitor for Mr and Mrs Forbes and Mr and Mrs Bohannes. The fact that the appellant acted dishonestly in his capacity as a solicitor reinforces the consequences that inevitably must flow in any event from his convictions. 22For these reasons, the three declarations sought by the Claimant should be made. The Opponent's name must be removed from the Roll of Legal Practitioners of the Supreme Court of New South Wales.

Additional Particulars 23In addition to the nine particulars relating to the offences for which the Opponent was convicted, the amended summons identifies a further ten particulars, as follows: "(x) That on 21 June 1995 the Opponent created a false memorandum calculated to conceal the criminal conduct at particular (v) above. (xi) That, in the course of, and in order to facilitate the criminal conduct at particular (v) above, the Opponent made a false representation to another solicitor in order to make use of that solicitor's trust account. (xii) That between about March and June 1995 the Opponent, in an attempt to conceal the criminal conduct at particulars (i)-(iv) above, prepared a false document purporting [to] be the minutes of a purported meeting of the board of directors of a company. (xiii) That on 21 June 1995 the Opponent created a false memorandum calculated to conceal the criminal conduct at particulars (i)-(iv) above. (xiv) That, in the course of, and in order to facilitate the criminal conduct at particulars (i)-(iv) above, the Opponent made false representations to another solicitor in order to make use of that solicitor's trust account. (xv) That, at the time of the criminal conduct at particulars (i)-(ix) above, the Opponent was acting in the course of his practice as a solicitor: i. in breach of his duties to each of his clients; and ii. used his position as a solicitor in order to facilitate his criminal conduct. (xvi) That, in the course of the criminal conduct at particulars (i)-(v) above, the Opponent acted in breach of his duties as a trustee in order to advance his own interests. (xvii) That, in March and April 2004 the Opponent made false representations to the Judicial Commission about a judicial officer in order to advance his own interests. (xviii) That, in his manner of defending the charges relating to his criminal conduct at particulars (i)-(ix), the Opponent demonstrated a lack of candour and remorse inconsistent with the standards of conduct expected of a lawyer. (xix) That the lack of candour and remorse referred to at particular (xviii) continued up to and including his conduct of the second appeal to the New South Wales Court of Criminal Appeal heard on or about 15 December 2010." 24Mr Griffin, who appeared for the Claimant, did not formally abandon reliance on the additional ten particulars. However, he recognised that, except to the extent identified in [21] above, the evidence adduced before this Court does not justify finding that any of the additional particulars have been made out. Accordingly, except to the extent already indicated, the Claimant has not made out any of particulars (x)-(xix).

ORDERS 25I propose that the declarations and order set out in [3] above be made. As the Claimant does not seek a costs order, no such order should be made.

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: 15 December 2011

Crimes Act 1990(NSW)

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