Wang v Council of the Law Society of New South Wales

Wang v Council of the Law Society of New South Wales - [2009] NSWSC 67 - NSWSC 2009 case summary — Zoe

[23]

In this case the Tribunal appeared by counsel as respondent to contest the appellant's case. Where curial proceedings arise out of a matter which is contested between parties appearing before a tribunal, it is not ordinarily appropriate for the tribunal to appear to contest the curial proceedings brought by one of the parties before it ( Reg. v. Australian Broadcasting Tribunal; Ex parte Hardiman [1980] HCA 13; (1980) 144 CLR 13, at pp 35-36 ). But where the proceedings before the tribunal are not inter partes, and where the Attorney-General cannot or does not intervene to represent the public interest (cf. Corporate Affairs Commission v. Bradley (1974) 1 NSWLR 391 ) and neither a law officer nor a public official is heard by the court (cf. Reg. v. Cook; Ex parte Twigg (1980) 147 CLR 15 ), it may be desirable that the tribunal should appear by counsel to make such submissions as it thinks calculated to assist the court and, in an appropriate case, to argue against the applicant's case. That is what was done in this case. Here, the Tribunal's function was to determine whether and to what extent a claimant was entitled under statute to a payment out of public moneys. Though the Tribunal was bound to act impartially, it was in a sense the guardian of the moneys appropriated by Parliament to answer the proper claims for compensation under the Act. In proceedings to review its decision, the Tribunal properly represents the public purse, and it was right that the Tribunal should appear by counsel as a party to respond substantially to the application. It follows that the Tribunal should then be treated as an ordinary party in the matter of costs. Therefore I would make an order awarding the applicant his costs against the Tribunal both here and in the Supreme Court. 16 In this case, the decision maker, the Law Society, was not an administrative tribunal. Mr Wang's claim did not involve any inter parties contest. Rather, the Law Society had a statutory obligation to investigate his claim and to determine it in accordance with its responsibility to administer the Fidelity Fund and to make payments out of the Fidelity Fund, to claimants who established rights to such payments in accordance with the statutory scheme. Undoubtedly in carrying out those functions, the Law Society was obliged to act impartially. These proceedings then came to this Court as an appeal from the Law Society's decision to refuse Mr Wang's claim, not by way of judicial review. 17 It was put for the Law Society that its role in the appeal proceedings was to 'test the evidence, make submissions about the effect of the evidence as against the provisions of the Act and as to whether this Court should find, on the merits, the plaintiff is entitled to payment from the Fund.' 18 The authorities suggest that in past proceedings such as these, whether brought under the 2004 Act or the 1987 Act, the Law Society has appeared as an active party. There has, to date, seemingly, been no suggestion that the Law Society did not properly have such a role to play. That is not by any means a decisive consideration, but explains why this point only now arises for determination. Even so, it was not suggested for Mr Wang that the Attorney General, or anyone else, could or should have appeared in these proceedings to perform the role which the Law Society seeks to perform. That was the order sought in TXU Electricity Ltd, which was refused by Ashley J. No such relief was sought here. 19 In my view it must be accepted that consistently with the approach taken in Fagan, the Law Society appearing as an ordinary party in the appeal to respond substantially to the relief sought, so as to properly represent the Fidelity Fund which it must administer, is its proper role. 20 That view is directly supported by the statutory scheme, particularly s 454 Court Proceedings, of the 2004 Act, which provides:

[26]

(b) any defence that would have been available to the practitioner or other person is available to the Law Society Council. 21 Were the approach urged for Mr Wang correct, s 454(b) would have no work to do in appeal proceedings such as this. The section expressly contemplates that the Law Society will appear in such proceedings in order to run a defence. That, it seems to me, puts beyond doubt that the Law Society may properly play an active role as contradictor in these proceedings. 22 I am unable to accept the argument that the possibility that one of the orders which the Court could make in proceedings such as this, is that the matter would be remitted to the Law Society for reconsideration (s 452(5)(b)(iii)), must lead to the conclusion that like in Hardiman, the Law Society ought not to appear as an active contradictor in the proceedings. 23 While the legislation contemplates remitter, that is not the only remedy provided for and indeed, was not the remedy here urged. Both parties accepted that in this case, the Court would decide the plaintiff's claim on the basis of the evidence led, although each accepting, in theory, that the Court could come to a different view and could order remitter. The 2004 Act expressly contemplates that the Law Society will appear as defendant in appeal proceedings and the possibility of remitter. As Ashley J observed in TXU Electricity Ltd, such a regime is one entirely open to the Parliament to adopt, if it wishes. 24 Were the Law Society not given such a role, on the approach urged for Mr Wang the result would be that a de novo hearing on appeal would proceed before this Court without any contradictor, leaving it entirely in the hands of the appellant as to what evidence to lead. Such evidence would then, seemingly, remain untested and the Court would be left in the position of being given no assistance, of the kind discussed by Brennan J in Fagan. That would be quite a curious appeal process, one which the legislation itself does not hint at. To the contrary, it contemplates, as I have said, that the Law Society will play an active role as a defendant. 25 It followed that the approach urged for Mr Wang had to be refused.

[27]

Which Act governs these proceedings? 26 Mr Wang's claim was made in 2007, in relation to events which occurred in 2004, at a time when the 1987 Act was in force. It was considered by the Law Society as a claim required to be dealt with in accordance with the provisions of the 1987 Act, even though the 2004 Act was then in force. 27 The appeal was brought to this Court in 2008 pursuant to the 2004 Act. A question was raised by the Law Society as to which legislation the appeal had to be determined under, having in mind the transitional provisions which appear in Schedule 9 to the 2004 Act. There, clause 3 makes general saving and transitional provisions in relation to events which occurred before the 2004 Act came into operation (1 October 2005) and clause 22A deals with appeals brought after the 2004 Act came into operation in respect of matters arising under the 1987 Act. It provides: 22A New appeals or reviews about old matters (1) A matter arising under the old Act may be the subject of an appeal or review made or applied for on or after 1 October 2005 if the appeal or review could have been made or applied for had this Act not been enacted. (2) The appeal or review may be made or applied for under the provisions of either the old Act or this Act (even if the matter could not otherwise be the subject of appeal or review under this Act if the matter had arisen on or after 1 October 2005). (3) The appeal or review may be dealt with under this Act (even if the matter could not otherwise be the subject of appeal or review under this Act if the matter had arisen after 1 October 2005), except in so far as a direction of the Supreme Court or the President of the Tribunal, as the case requires, under this clause otherwise provides. (4) The Supreme Court or the President of the Tribunal, as the case requires, may direct that the appeal or review proceedings be dealt with in accordance with the provisions of: (a) the old Act, or (b) the old Act and this Act as regards different aspects of the proceedings, as indicated in the direction. Those provisions apply accordingly, and so apply with any necessary adaptations. (5) The President of the Tribunal may, for the purposes of this clause, direct that the Tribunal be constituted as determined by the President or the Divisional Head of the Legal Services Division, being a determination that is consistent with requirements for the constitution of the Division under the Administrative Decisions Tribunal Act 1997 at or at any time before the commencement of this clause. (6) The President may give any such direction at any stage of the proceedings. (7) The Supreme Court or the Tribunal, as the case requires, may make orders declaring how the decision on the appeal or review is to have effect in relation to the provisions of this Act. (8) Any decisions of the Supreme Court or the Tribunal or directions of the Supreme Court or the President of the Tribunal that: (a) were made or given before the commencement of this clause, and (b) would have been valid had the Legal Profession Amendment Act 2006 (which inserted this clause) been in force at the relevant time, are taken to have been validly made or given.

[37]

. the fact that the parties contemplated in a written agreement the possibility that the visa might be fraudulent. 34 Still, further comment was invited by the Law Society from Mr Wang, to which Mr Bian again responded, pointing, amongst other things, to Mr Wang's reliance on Mr Lui as a lawyer, on whom he had relied not to be involved in any illegality and who he had trusted. Mr Wang denied that he knew or ought to have known of the illegality in question. 35 On appeal, the only evidence was that led in Mr Wang's case. Mr Wang gave his evidence by telephone, from China, with the assistance of an interpreter. Mr Lu was called and also gave his evidence with the assistance of an interpreter. Mr Bian, who represented Mr Wang both in his dealings with the police and the Law Society gave affidavit evidence and was not required for cross examination. The evidence expanded upon the information which had been provided to the Law Society in the claim form and by the subsequent correspondence to which I have referred. 36 The Law Society led no evidence as to its investigation of the claim, or what it had revealed. It was common ground that both Mr Li and Mr Lui had disappeared and were not able to be found. 37 From the evidence, it became apparent why the Committee had reached the view that Mr Lui had been involved in an illegal transaction. He was a sole practitioner, who represented on his letterhead 'Andrew Lui Lawyers' that he was a solicitor, a public notary and a migration agent. 38 In his claim to the Law Society, Mr Wang claimed that Mr Lui had provided him with legal services in relation to an application for a permanent resident visa. It was not in contest that Mr Lui was introduced to Mr Wang by Mr Li, to whom Mr Wang had earlier been introduced by an acquaintance as being a migration agent, who could assist Mr Wang in obtaining a permanent resident visa. 39 Mr Wang, a Chinese national, had been in Australia since 1996. He had first travelled here under a one month business visa, which had been arranged for him by Mr Lu, with the assistance of a migration agent. Mr Lu, a friend of Mr Wang's father, had himself first come to Australia from China as a student and had later obtained permanent residency granted to such students by the Australian Government, in the aftermath of the events in Tiananmen Square in the early 1990s. 40 Mr Wang had remained illegally in Australia after the expiry of his business visa and in 1998 had applied for a protection visa, with the assistance of a migration agent. That application was unsuccessful, but Mr Wang still continued to remain illegally in Australia. 41 In 2004, Mr Wang was introduced to Mr Li. Mr Li told him that he could get Mr Wang a permanent resident visa, which would cost $130,000, but that if he could not get the visa, he would refund all of the money to Mr Wang. In a later conversation Mr Li told Mr Wang that he would 'have to pay a deposit of $35,000'; that he had a 'working partner' Mr Lui and that 'even if you won't trust me you have to trust Mr Lui. Mr Lui is a solicitor and we are good friends.' Mr Wang later borrowed money from Mr Lu and on 13 February 2004, together they went to see Mr Li and Mr Lui at Mr Lui's offices, which he and Mr Li appeared to share. 42 In the discussion Mr Li told Mr Wang that he could apply for a permanent visa. Mr Lui said 'I can guarantee what Mr Li has said. He will guarantee you success with the application for Visa or have your money fully refunded'. 43 Mr Lu paid $35,000 cash to Mr Lui, who provided a typed 'acknowledgement' printed on his letterhead, which provided:

[56]

52 Neither Mr Wang nor Mr Lu were cross examined as to the veracity of their accounts as to their dealings with Mr Li and Mr Lui. They were, however, both cross examined as to their concerns that the transaction might not be a lawful one. 53 Mr Wang's evidence was that he stayed in Australia, knowing he did not have a valid visa in 1996, after the expiry of his one month business visa and later after his 1998 application for a visa was not successful. He wanted to stay permanently in Australia and was concerned about being deported. He agreed that the arrangement which he made in 2004 was that Mr Li would do the work to get the visa and that Mr Lui would hold the money for safekeeping, while he waited for the visa. Mr Li told him the visa cost $130,000 because it was very difficult to get. Mr Li wanted him to pay cash and he borrowed the money from Mr Lu, who told him that if he could get a visa for $130,000, it was worth it, but Mr Lu was worried that he would get ripped off. 54 Mr Wang also agreed that when he paid the money, he made an agreement that if any problems arose, the money would be repaid. He said that he did not sign the second agreement, when the $95,000 was paid, although the translation of the document in evidence shows that he did sign it. He did then receive the document, which he read. It included a statement that the money would be repaid if the visa was fraudulent. Mr Wang explained that the document had been prepared by Mr Lui and Mr Li. It was they who had used that phrase, not him. The document was not discussed at the meeting, it had been discussed before. He never thought that the visa would be fake. The agreement was to give him peace of mind. 55 Mr Lu's evidence was that he was a business man and company director. He had engaged an agent to help him get a business visa for Mr Wang in 1996. He had never hired an agent to help anyone else get a visa. He was aware that Mr Wang had stayed in Australia after his visa had expired and that he had been unsuccessful in obtaining another visa in 1998, but he did not know that Mr Wang did not have a visa in 2004, when he came to seek his help.

[58]

The parties' cases 57 It was Mr Wang's case that the evidence showed that Mr Lui had been involved in a criminal enterprise with Mr Li and that he had taken steps to draft documents in such a way as to disguise his true involvement in the transaction, in which he had provided legal services. The evidence showed that in reality, Mr Li was Mr Lui's associate, as defined in the 1987 Act and that Mr Wang had a proper claim upon the Fidelity Fund, which had wrongly been refused. 58 It would be accepted that the money was trust money; Mr Lui had an unmet obligation to repay the money to Mr Wang and the failure to do so was as the result of Mr Lui's dishonest omission, or that of Mr Li, as an associate of Mr Lui. 59 It was the Law Society's case that while there was evidence of a relationship between Mr Lui and Mr Li, the evidence did not admit of a conclusion that it was trust money; Mr Lui had not received the money in the course of his legal practice and that Mr Li was not an associate of Mr Lui's legal practice. 60 It was argued that the evidence showed that the only involvement which Mr Lui had in the transaction was to hold money as trustee for Mr Li, with the related condition that in certain circumstances, Mr Li was to refund the money to Mr Wang. This did not constitute work done or business transacted in the ordinary course of legal practice. The act of holding money as a trustee was not within the realm of activities which may only be undertaken by legal practitioners; any person may hold money on trust. Here there was the bare holding of money, with no associated legal services being provided. Even if Mr Lui's receipt of the money evidenced an intention to create a legal relationship of some kind, it was not intended to create a retainer to provide legal services. Nor was there evidence of consideration from Mr Li to Mr Lui, as would be expected if it was they who had had a solicitor/client relationship. 61 Even if it could be concluded that the money had been received as trust money in connection with the provision of legal services, the evidence disclosed no relevant default by Mr Lui to pay or deliver the money. It was not entrusted to him for payment or delivery to Mr Wang, but rather for payment to Mr Li. 62 Further written submissions were filed, which it is not necessary here to outline.

[60]

(i) pecuniary loss because of (ii) a failure by a solicitor to account for, pay, or deliver (iii) money or other valuable property (iv) (which has been) received by, or entrusted to, the solicitor (v) in the course of the solicitor's practice (vi) that the failure arose from an act or omission of the solicitor (vii) being an act or omission which the Law Society Council finds to be dishonest 64 There was no real issue here between the parties as to what was referred to by his Honour in paragraphs (i), (iii) and (vii). For reasons which will become clear, I am satisfied that the other factors here in issue, were established on the evidence. 65 Mr Wang's claim was dealt with by the Law Society under the 1987 Act, which provided in s 80, that: (1) The Fidelity Fund is held, and is to be a, by the Law Society for the purpose of compensating persons who suffer pecuniary loss because of a failure to account or a dishonest default. 66 Relevant to this claim was the definition of 'failure to account' appearing in s 79A of the 1987 Act: 79A Meaning of "failure to account" (1) In this Division, a reference to a failure to account is a reference to a failure by a solicitor to account for, pay or deliver money or other valuable property received by, or entrusted to, the solicitor or an associate in the course of the solicitor's practice (in the case of an associate, being money or valuable property under the direct or indirect control of the solicitor). (2) This section applies only to a failure to account that arises from an act or omission of the solicitor or associate: (a) for which the solicitor or associate has been convicted of a crime or an offence involving dishonesty, or (b) which the Law Society Council has found to be dishonest. (3) A finding by the Law Society Council under subsection (2) (b) that an act or omission is, or is not, dishonest is final and conclusive. (4) This section applies whether the money or other property was received by the solicitor or associate as trustee, agent, bailee or stakeholder or in any other capacity. (5) This section applies whether the failure to account, or the act, omission, conviction or finding of dishonesty, took place before or after the commencement of this Act. 67 At the hearing, the parties also advanced submissions by reference to the provisions of the 2004 Act, given the time at which Mr Wang made his claim. Section 436 of the 2004 Act gives a right to make a claim on the Fidelity Fund in respect of a 'default'. Section 434 provides that this part of the 2004 Act is concerned with 'a default of a law practice arising from or constituted by an act or omission of one or more associates of the practice'. 'Default' is defined in s 419 as: default, in relation to a law practice, means: (a) a failure of the practice to pay or deliver trust money or trust property that was received by the practice in the course of legal practice by the practice, where the failure arises from or is constituted by an act or omission of an associate that involves dishonesty, or (b) a fraudulent dealing with trust property that was received by the practice in the course of legal practice by the practice, where the fraudulent dealing arises from or is constituted by an act or omission of an associate that involves dishonesty.

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72 It does not necessarily follow, of course, from the overall illegality of Mr Li and Mr Lui's scheme, that the transaction in which Mr Lui was involved with Mr Wang was an illegal one. Plainly a legal transaction can be used in order to further an illegal enterprise. 73 Indeed, it was accepted in the Law Society's case that Mr Lui's role as a stakeholder was a lawful one, but it argued that the evidence did not show that the money received by Mr Lui, was received in the course of his practice as a solicitor, as the definition in s 79A of the 1987 Act required (and the corresponding provisions of the 2004 Act.) 74 The evidence was that Mr Wang and Mr Lu met with Mr Lui and Mr Li at Mr Lui's offices, which, it appeared to them, they shared, consistent with Mr Li's advice that they worked together. In the discussion it was agreed that Mr Lui was to act as stakeholder of the money, holding it on trust, he having assured Mr Lu and Mr Wang that the services which Mr Li was offering to provide Mr Wang were legal. That advice was accepted and Mr Lui then received $130,000 cash, which he acknowledged by the documents he had prepared on his letterhead and which he signed. Thereby, it was acknowledged that Mr Lui's role was to hold the money on trust, until certain work was performed by Mr Li and that it was to be returned, if the work was not undertaken. 75 That evidence demonstrated, as was accepted by the Law Society, that Mr Lui was to hold the money on trust as a stakeholder. There is nothing illegal about a solicitor acting in such a capacity. On the evidence, I am unable to accept the Law Society's case that in agreeing to undertake that role, Mr Lui was not doing so in the course of his legal practice. 76 If a solicitor agrees to hold money on trust as a stakeholder, I can see no basis on which it may properly be concluded that the solicitor is doing so other than in the ordinary course of that solicitor's practice, unless it be the case that the solicitor received the money in the course of some other business entirely. While services of a stakeholder need not be provided by a solicitor, such services are within the range of services which they customarily provide in the course of their practice. 77 That approach is directly supported by various of the provisions of the 1987 Act, which were concerned to regulate solicitors' receipt of money. Section 61 obliged a solicitor 'who, in the course of practising as a solicitor in this State, receives money on behalf of another person' to deal with such money as trust money. In the definitions appearing in s 60, it was provided, as to such receipt: (4) A reference in this Division to money received by a solicitor includes a reference to: (a) money coming under the direct control of the solicitor, whether or not by the exercise of an express power or authority or by operation of law, (b) money paid to an associate of the solicitor on the advice of the solicitor, but only if the money is under the direct or indirect control of the solicitor, and (c) money in relation to which the solicitor (whether or not through an associate) has a power of disposal exercisable jointly and severally with the person on whose behalf it was received or a nominee of the person. 78 Those obligations were not qualified on the basis that they only arose, if the solicitor who received the money was to provide other legal services. Receiving the money as a stakeholder, was, of itself enough to trigger these statutory obligations. In this respect, what was provided in s 79A may not be overlooked. It specified the circumstances in which 'a failure to account' on the part of a solicitor arose, making it clear that: (4) This section applies whether the money or other property was received by the solicitor or associate as trustee, agent, bailee or stakeholder or in any other capacity. . 79 The 2004 Act, if then in force, would have required a similar approach, given the definition of trust money in s 234: trust money means money entrusted to a law practice in the course of or in connection with the provision of legal services by the practice, and includes: (a) money received by the practice on account of legal costs in advance of providing the services, and (b) controlled money received by the practice, and (c) transit money received by the practice, and (d) money received by the practice, that is the subject of a power, exercisable by the practice or an associate of the practice, to deal with the money for or on behalf of another person.

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80 The money Mr Lui received fell within paragraph (d) of the definition and perhaps even paragraph (c). Section 248 which deals with the question of when money is received by a legal practice, makes this conclusion even clearer. It provides: 248 When money is received (1) For the purposes of this Act, a law practice receives money when: (a) the practice obtains possession or control of it directly, or (b) the practice obtains possession or control of it indirectly as a result of its delivery to an associate of the practice, or (c) the practice, or an associate of the practice (otherwise than in a private and personal capacity), is given a power to deal with the money for or on behalf of another person. 81 I am unable to conclude that either Act contemplated that such an obligation to deal with the money which Mr Lui received as trust money would not arise, if Mr Lui received the money only as a stakeholder, providing no other legal services, as the Law Society argued. If that view were properly open it would seem to leave a large loophole in these legislative schemes. Solicitors whose only service in a particular transaction was that of stakeholder, would thereby be able to avoid entirely the obligations imposed by the Act as to how they are to deal with money which they receive, in the course of the practice. Thereby those with whom they deal would be deprived of the important protections established by this legislation. 82 Such an approach would appear inconsistent with what was contemplated by both Acts. In my view, the Court should be slow to come to such a construction of this important statutory scheme. 83 In any event, on the evidence in this case there can be no question that Mr Lui, a solicitor, came to have control of this money as the direct result of his position as a solicitor and his advice that the services Mr Li was to provide Mr Wang were legal. There was no evidence that Mr Lui was to hold the money as stakeholder, otherwise than in his capacity as a solicitor, to the contrary, that was why Mr Wang and Mr Lu were convinced to pay the money over. By the acknowledgment under which he received the money, Mr Lui was given power of control over it and its disposal. Mr Lui drafted the terms of the acknowledgement, which specified the basis on which the money was to be held. That also appears to have involved the provision of legal services, as did his advice that the work Mr Li was to undertake for Mr Wang, was legal. There can be no question that such services are services which a solicitor may provide in the course of legal practice. It follows that s 61 of the 1987 Act required Mr Lui to deal with that money as trust money. 84 There was some debate as to who Mr Lui's services were provided to, it being accepted that the evidence was capable of showing that either Mr Li, or Mr Wang, or both of them, were clients of Mr Lui, although it was the case put for Mr Wang that Mr Li was, in reality, Mr Lui's agent. 85 Mr Wang certainly claimed that he had received legal services from Mr Lui. That claim was supported by Mr Lu. Why they had such an understanding was apparent on the evidence. They were not prepared to entrust such a large sum of money to merely anyone, not even a migration agent, as Mr Li claimed to be. They understood that they were entrusting the money to Mr Lui, to be held in his capacity as a solicitor. That was the basis on which Mr Li and Mr Lui convinced them to pay the money, Mr Lui also having assured them as to the legality of the services which were being offered to Mr Wang. 86 In its case the Law Society relied upon Swart v Carr [2006] NSWSC 1302, where Palmer J had to consider the question of what evidenced whether a person is 'acting as a solicitor'. From his analysis of the authorities, his Honour concluded that: 85 From a consideration of these cases, I deduce the following propositions:

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87 It was argued for Mr Wang that these tests were not relevant to determining the questions which arise under this statutory scheme. Nevertheless, even accepting the relevance of this approach, the evidence here was well capable of establishing that Mr Lui had agreed with both Mr Li and Mr Wang, to provide the services of stakeholder; that he drafted the terms on which he was so to act, plainly a service involving the exercise of some legal knowledge and that he also gave advice to Mr Wang, as to the legality of the service to be provided by Mr Li. That evidence is sufficient to meet his Honour's tests. Even if Mr Lui's agreement to act as a stakeholder had only been with Mr Li, that would have been sufficient. 88 The evidence established that it was only agreed that the service of stakeholder would be provided by Mr Lui, because he was a solicitor and was to hold the money on trust in that capacity. The acknowledgement, provided on Mr Lui's letterhead and the circumstances in which that document came to be created, make these conclusions unavoidable. That evidence also brings the work within the definition of 'legal services' in s 4 of the 2004 Act, earlier quoted. 89 As the Law Society submitted, the terms of the acknowledgment drafted by Mr Lui undoubtedly favoured Mr Li's position and sought to conceal Mr Lui's involvement in the scheme. Instead of providing that Mr Lui, as stakeholder, would repay the money to Mr Wang, if the agreed work was not performed by Mr Li, the money was to be repaid by Mr Li. As was argued, of necessity, this meant that the money had to be released by Mr Lui to Mr Li, even if it had to be repaid because the agreed work had not been undertaken by Mr Li. There was, of course, never any intention for that work to be performed or the money to be returned, if the false visa was discovered. The release plainly assisted this criminal enterprise, rather than protecting Mr Wang's position, by requiring Mr Lui to repay the money direct to Mr Wang, as one might ordinarily expect of a stakeholder. That thereby Mr Li and Mr Lui were assisted in duping Mr Wang, does not lead to the conclusion that Mr Lui was not acting in his capacity as a solicitor, in drafting the terms of the acknowledgement, agreeing to hold the money on trust as a stakeholder, or advising on the legality of the service which Mr Li was to provide. 90 As was argued for Mr Wang, given the underlying criminal enterprise in which Mr Li and Mr Lui were engaged, it is unlikely that Mr Lui drafted the terms of the acknowledgement to ensure that they faithfully reflected the true nature of the relationship between Mr Wang, Mr Li and Mr Lui. Rather, they were drafted to help conceal what Mr Li and Mr Lui intended.

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... that the conduct of the transaction with the solicitor was illegal, and the person who made the claim knew or ought reasonably to have known of that illegality? 100 The evidence revealed Mr Wang's vulnerable position. He was in Australia illegally, having remained here without a valid visa since 1996. Clearly Mr Li's offer of the opportunity of obtaining a permanent visa was made in circumstances where Mr Wang had suspicions. He had only paid $1,000 in 1998, when he had unsuccessfully made an earlier application for a visa, with the assistance of another migration agent. That process had taken about a year. Mr Lu, who had not had any experience of applying for a visa since he had assisted Mr Wang obtain a business visa in 1996, nevertheless rightly shared his concerns. He himself had to borrow money, in order to loan the $130,000 to Mr Wang. 101 Mr Li and Mr Lui's scheme was designed to allay those concerns, by utilising Mr Lui's position as a solicitor. Mr Wang was told they worked together. He and Mr Lu met with Mr Lui and Mr Li at Mr Lui's offices where they did appear to work together. Not only did Mr Lui's letterhead indicate that he was a solicitor, but also that he was a migration agent. Had Mr Wang made enquiries, he would have learned that the Migration Act 1958 (Cth) contemplated that Mr Lui, a solicitor, could offer migration legal assistance (s 277). The provision of migration services could have been lawfully provided by Mr Li, if he was a registered migration agent (s 276). The evidence did not explore whether he had such registration, but Mr Li told Mr Wang that he worked together with Mr Lui and Mr Lui advised that the services Mr Li was to provide, were legal. 102 The question which thus arises for determination is whether Mr Wang ought reasonably to have known that Mr Lui, a practicing solicitor in this State, would be engaged in a criminal enterprise, in which he wrongly advised that the service which Mr Li was offering at a cost of $130,000 was legal and that the service he agreed to provide, that of stakeholder, itself an unarguably legal service for a solicitor to provide, was but part of a scheme to defraud him. 103 While $130,000 was no doubt a very large sum for Mr Wang to pay for a permanent resident visa, it is not a sum large enough, one would think, to tempt a solicitor practising in this State, to become involved in a scheme which would risk his reputation, his practising certificate, his livelihood and a criminal conviction. That was certainly Mr Lu's reasoning. He was an experienced businessman, used to dealing with lawyers in Australia. Mr Wang was not, having worked as a gyprocker while living illegally in Australia. Ought he reasonably have come to some different conclusion? 104 I am satisfied that Mr Wang's evidence, that he never expected to receive a false visa, must be accepted. It was Mr Lui's involvement, his advice as to the legality of what was being offered and he agreeing, as a solicitor, to hold the money on trust until Mr Li had done the work necessary to obtain the promised visa, which reasonably provided Mr Wang with the necessary confidence that he was not being involved in an illegal exercise. 105 The evidence cannot properly lead to the conclusion that Mr Wang ought reasonably to have known of the illegality in which Mr Lui was involved.

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