Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Council of the Law Society of New South Wales v Leslie [2020] NSWCATOD 81 Hearing dates: 5 May 2020 Date of orders: 23 July 2020 Decision date: 23 July 2020 Jurisdiction: Occupational Division Before: Cole DCJ, Deputy President J Lonsdale, Senior Member Emeritus Professor P J Foreman AM, General Member Decision: (1) The Tribunal recommends that James Edward Leslie be removed from the roll of solicitors kept by the Supreme Court of New South Wales. (2) The respondent is to pay the costs of the applicant to be agreed or assessed. Catchwords: PROFESSIONS AND TRADES - lawyers - trust accounts Legislation Cited: Legal Profession Act 1987 (NSW) (repealed) Legal Profession Uniform Law (NSW) Legal Profession Uniform General Rules 2015 (NSW) Cases Cited: Berger v Council of the Law Society of New South Wales [2019] NSWCA 119 Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336 Dupal v Law Society of NSW [1990] NSWCA 56 Law Society of New South Wales v Jones (unrep. NSWCA, 27 July 1978) New South Wales Bar Association v Cummins [2001] NSWCA 284 Prothonotary of the Supreme Court of NSW v Ritchard (Unrep. NSWCA, 31 July 1987) Texts Cited: Lexis Nexis Concise Australian Legal Dictionary Fourth Edition 2011 Category: Principal judgment Parties: Council of the Law Society of New South Wales (applicant) James Leslie (respondent) Representation: Counsel: P Maddigan (applicant) No appearance for the respondent Solicitors: Law Society of New South Wales (applicant) File Number(s): 2019/00384822 Publication restriction: NIl REASONS FOR DECISION 1. The Law Society of New South Wales ('the Law Society') has applied to the Tribunal for disciplinary findings and orders against James Edward Leslie ('Mr Leslie') pursuant to the Legal Profession Uniform Law (NSW) ('the Uniform Law'). 2. The Law Society alleges that Mr Leslie, a solicitor, is guilty of professional misconduct. The Law Society seeks an order recommending that Mr Leslie's name be removed from the Roll. 3. Mr Leslie filed a Reply in the Tribunal, in which he stated that he does not oppose the orders sought by the Law Society in its application. Mr Leslie was not represented at the hearing of the matter and did not appear. 4. All of the material relied upon by the Law Society has been served upon Mr Leslie. Mr Leslie has not sought to meet the Law Society's case in any way. The evidence adduced by the Law Society is uncontested. The allegations particularised in the application for disciplinary findings and orders are supported by the evidence in the material relied upon by the Law Society. We consider that those facts have been proven to the Briginshaw standard (ie, the standard described in Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336). Grounds 1 to 5, below, in particular, involve serious allegations with respect to the mishandling of trust money. We consider that the evidence relied upon with respect to all of the grounds pleaded is of the requisite high probative value. Grounds for the Application 1. The following grounds are pleaded in support of the application for a determination that Mr Leslie is guilty of professional misconduct: 1. The Respondent caused a deficiency in a trust account. 2. The Respondent misappropriated trust funds. 3. The Respondent manipulated trust accounting records to conceal misappropriation of trust money. 4. The Respondent failed to comply with his obligations under the legal profession legislation in relation to holding trust money. 5. The Respondent contravened section 139 of the Legal Profession Uniform Law (NSW). 6. The Respondent failed to comply with a notice issued to him under section 370 of the Uniform Law. The Evidence 1. The facts alleged by the Law Society are set out in the following affidavits ('the affidavits'): * an affidavit of Simon Paul Ward, a trust account inspector, sworn on 12 December 2019, * an affidavit of Peter Harold Lambie sworn on 18 December 2019, * an affidavit of Anthony James Lean, the solicitor for the Law Society, sworn on 6 December 2019. 1. The affidavits were all provided to Mr Leslie. Mr Leslie did not seek to cross examine any of the deponents and did not seek to adduce any evidence to contradict the evidence of the deponents. We accept the evidence in the affidavits as proof of the matters deposed to therein. Background facts 1. Mr Leslie was admitted as a lawyer in New South Wales on 9 July 1982. 2. Mr Leslie was the sole principal of the incorporated legal practice Leslie Hargrave Lawyers Pty Ltd from 1 May 2006 until 16 November 2017. 3. On 16 November 2017, the Law Society suspended Mr Leslie's practising certificate under s 77 of the Uniform Law. 4. On 14 December 2017, the Law Society further suspended Mr Leslie's practising certificate until 30 June 2018, under s 76(b) of the Uniform Law. The Law Society also appointed Mr Richard Flynn as the manager of Leslie Hargrave Lawyers Pty Ltd for a period of two years, under s 334(2) of the Uniform Law. 5. On 8 March 2018, the Law Society appointed Mr Simon Ward to investigate the dealings with trust money within Leslie Hargrave Lawyers Pty Ltd. Mr Ward provided his report to the Law Society in June 2018. 6. The Law Society made complaints against Mr Leslie under s 266 of the Uniform Law on 1 February 2019. 7. Mr Leslie was provided with the complaints and invited to make submissions, but he did not do so. 8. In the period of time with which these proceedings are concerned, Mr Leslie operated the following accounts: 1. The Leslie Hargrave Lawyers Pty Ltd Trust Account (the Trust Account). 'Trust account' and related terms are defined in the Uniform Law, in s 128, and s 6, as follows: trust account means an account maintained by a law practice with an authorised ADI to hold trust money; authorised ADI means an ADI authorised to maintain trust accounts to hold trust money under section 149; ADI means an authorised deposit-taking institution within the meaning of the Banking Act 1959 of the Commonwealth; 1. The Leslie Hargrave Lawyers Pty Ltd Office Account ('the Office Account'). 2. The Leslie Hargrave Lawyers Pty Ltd Controlled Money Account ('the Controlled Money Account'). The Controlled Money Account had been opened in 2010 in relation to a matter we will refer to as 'the Houghton estate'. 'Controlled money account' and related terms are defined in the Uniform Law, in s 128, as follows: controlled money account means an account maintained by a law practice with an ADI for the holding of controlled money received by the law practice; controlled money means money received or held by a law practice in respect of which the law practice has a written direction to deposit the money in an account (other than a general trust account) over which the law practice has or will have exclusive control; The Controlled Money Account related only to the Houghton estate matter, and had nothing to do with the Lambie estate. No written direction or other direction existed in relation to the Lambie estate in connection with the Controlled Money Account. 1. Mr Leslie's personal bank account ('the Personal Account'). Lambie Estate matter - facts 1. Mr Lambie was the sole executor and sole beneficiary of his late mother's estate. Mr Leslie acted for Mr Lambie in relation to the estate ('the Lambie estate'). Mr Leslie knew that Mr Lambie was the sole executor and sole beneficiary of the Lambie estate. 2. On 4 October 2016, Mr Lambie entered into a costs agreement with Leslie Hargrave Lawyers Pty Ltd. 3. Mr Lambie obtained a grant of probate in relation to his mother's will on 21 November 2016. 4. On about 5 December 2016, a cheque for $209,856.46 was received at Leslie Hargrave Lawyers Pty Ltd for the Lambie Estate. The cheque was the repayment of a nursing home accommodation bond. 5. Mr Leslie caused the cheque to be deposited into the Trust Account. 6. By 17 January 2017, Mr Leslie had arranged the withdrawal and disbursement of the whole of the $209,856.46 without authority from Mr Lambie. The amount was disbursed in the following way: 1. $40,122.39 to 'The Bank of Tokyo – Mitsubishi UFJ Ltd' (as a component of a bank cheque for $72,600 drawn on 20 December 2016). 2. $142.20 to Onepath Life. 3. $89,887.14 to the Office Account. 4. $79,704.73 to the Controlled Money Account (as part of a transfer of $80,000 made on 17 January 2017). 1. None of these disbursements related to the Lambie Estate. 2. The payment of $40,122.39 to 'The Bank of Tokyo – Mitsubishi UFJ Ltd' formed part of a bank cheque dated 20 December 2016 for the settlement of the purchase of a property at Ermington in relation to which Mr Leslie acted for the purchaser, Mr Novita. Mr Novita's matter was wholly unrelated to the Lambie estate. 3. The trust bank reconciliation report for January 2017 records the payment of $142.20 to Onepath Life as "One path life insurance Lambie". The life insurance, however, was entirely unrelated to the Lambie estate matter. 4. The payment to the Office Account of $89,887.14 was comprised of the following: 1. $15,291 purportedly for legal costs, however, no tax invoice had been rendered to Mr Lambie and Mr Lambie had not authorised the payment of costs. In addition, this payment was contrary to the costs agreement entered into by Mr Lambie on 4 October 2016. 2. $74,596.14 paid to Louise Hands and recorded as 'Payment of distribution [sic] of estate to Louise Hands re Lambie estate'. Ms Hands had no connection of any kind with the Lambie estate and no interest in its funds. Mr Leslie was acting for her in separate proceedings. 1. Mr Leslie caused the sum of $79,704.73, referred to in [21], to be paid into the Controlled Money Account. Mr Leslie knew that the Controlled Money Account had been opened in 2010 for the purpose of holding funds for the Houghton estate matter. Mr Leslie knew that the Houghton estate matter and the Lambie estate matter were unrelated, and that the Lambie estate matter had nothing to do with the Controlled Money Account. Mr Leslie knew that he had no authority from Mr Lambie to pay funds of the Lambie estate into the Controlled Money Account. The deposit of $79,704.73 from the Lambie estate into the Controlled Money Account was recorded on the January 2017 trust bank reconciliation report as 'Transfer of deposit (Boyd) to cash management account on 3 January 2016'. In fact, the transfer was made on 17 January 2017, so the date is wrong. There was no transaction of the type recorded on 3 January 2016. The funds and the transfer were unrelated to anyone with the name of Boyd. 2. Each of the disbursements benefitted either Leslie Hargrave Lawyers Pty Ltd or Mr Leslie, directly or indirectly. 3. By 17 January 2017, the Trust Account was deficient in the sum of $209,856.46. Mr Leslie had appropriated all of the monies which should have been held in trust for the Lambie Estate. 4. On about 19 May 2017, Mr Lambie instructed Mr Leslie to pay him $20,000 from the funds in the Trust Account on account of the Lambie Estate. 5. Mr Leslie withdrew $20,010 from the Trust Account on 24 May 2017, and obtained a bank cheque from the ANZ bank for $20,000 made payable to Mr Lambie. The cost of the bank cheque was $10. The bank cheque was deposited into Mr Lambie's bank account on the same day. 6. The Trust Account contained no money on account of the Lambie estate by 19 May 2017, so the withdrawal of a further $20,010 created a further deficiency of $20, 010 in the Trust Account. 7. On 21 June 2017, a payment of $159.23 was made from the Trust Account to One Path Life Ltd, and that payment caused the Trust Account to be overdrawn by $150.17. Ground 1 – the respondent caused a deficiency in the Trust Account 1. The Uniform law provides, in s 148: 148 Deficiency in trust account A law practice, an Australian legal practitioner or any other person must not, without reasonable excuse, cause— (a) a deficiency in any trust account or trust ledger account; or (b) a failure to pay or deliver any trust money. Penalty: 500 penalty units or imprisonment for 5 years, or both. 1. On the basis of the facts set out in [18] to [26] above, which are uncontested, we find that Mr Leslie caused a deficiency in the Trust Account, as alleged. Ground 2 – the respondent misappropriated trust funds – Lambie estate 1. As we have said, in [21] above, $209,856.46 was disbursed from the Trust Account to recipients who had no beneficial interest in the Lambie estate. 2. Mr Lambie gave no authority for the withdrawal of the $209,856.46, or any part of it, or for its disbursement. 3. Mr Leslie caused the withdrawal and disbursement of the $209,856.46 from the Trust Account. 4. As a solicitor of some years standing, and as the sole principal of Leslie Hargrave Lawyers Pty Ltd, Mr Leslie either knew or ought to have known that he was not entitled to bring about the withdrawal of the $209,856.46, or to cause its disbursement, in the manner described in [21]. 5. Misappropriation, in this context, is the wrongful application by an agent of the funds of the principal (see Lexis Nexis Concise Australian Legal Dictionary Fourth Edition 2011). 6. It is clear from the conduct of the Law Society's case that what is alleged against Mr Leslie is dishonest or fraudulent misappropriation, although neither the word 'dishonest' nor the word 'fraudulent' were pleaded in Ground 2 of the complaint. 7. In Berger v Council of the Law Society of New South Wales [2019] NSWCA 119 Payne JA, with whom Meagher JA and Simpson AJA agreed on this point said, at [240]: 240. The common law of Australia about the meaning of "dishonesty", unless a specific statutory definition applies, has been clear since Peters v The Queen (1998) 192 CLR 493; [1998] HCA 7. There, Toohey and Gaudron JJ said of "dishonesty": "[15] There is a degree of incongruity in the notion that dishonesty is to be determined by reference to the current standards of ordinary, honest persons and the requirement that it be determined by asking whether the act in question was dishonest by those standards and, if so, whether the accused must have known that that was so. That incongruity comes about because ordinary, honest persons determine whether a person's act is dishonest by reference to that person's knowledge or belief as to some fact relevant to the act in question or the intention with which the act was done. They do not ask whether he or she must be taken to have realised that the act was dishonest by the standards of ordinary, honest persons. Thus, for example, the ordinary person considers it dishonest to assert as true something that is known to be false. And the ordinary person does so simply because the person making the statement knows it to be false, not because he or she must be taken to have realised that it was dishonest by the current standards of ordinary, honest persons. … [18] In a case in which it is necessary for a jury to decide whether an act is dishonest, the proper course is for the trial judge to identify the knowledge, belief or intent which is said to render that act dishonest and to instruct the jury to decide whether the accused had that knowledge, belief or intent and, if so, to determine whether, on that account, the act was dishonest. Necessarily, the test to be applied in deciding whether the act done is properly characterised as dishonest will differ depending on whether the question is whether it was dishonest according to ordinary notions or dishonest in some special sense. If the question is whether the act was dishonest according to ordinary notions, it is sufficient that the jury be instructed that that is to be decided by the standards of ordinary, decent people. However, if "dishonest" is used in some special sense in legislation creating an offence, it will ordinarily be necessary for the jury to be told what is or, perhaps, more usually, what is not meant by that word. Certainly, it will be necessary for the jury to be instructed as to that special meaning if there is an issue whether the act in question is properly characterised as dishonest." (Footnotes omitted.) 1. Further, at [242] Payne JA said: 242. In Macleod v The Queen (2003) 214 CLR 230; [2003] HCA 24 the plurality, Gleeson CJ, Gummow and Hayne JJ, said: "[34] The Court of Criminal Appeal in Glenister reviewed the authorities construing s 173 and cognate provisions and concluded that the term "fraudulently" in this context has a meaning interchangeable with "dishonestly". That construction has been adopted in relation to analogous provisions in other Australian jurisdictions. It is consistent with the conclusion of four members of this Court in Spies v The Queen concerning the offence created by s 176A of the Crimes Act. It was there held that, to establish that a director had "defraud[ed]" any person in his or her dealings with the company in contravention of s 176A, it was necessary to prove that the accused had used "dishonest means" to prejudice the rights or interests of that person. … [37] In a passage that has significance for the present appeal, Toohey and Gaudron JJ stated [in Peters v The Queen]: [The passage then quoted is extracted above at [240].] Their Honours rejected any further requirement, derived from R v Ghosh [[1982] QB 1053], that the accused must have realised that the act was dishonest by those standards." (Footnotes omitted.) 1. Following Berger, the steps to take in determining whether conduct was dishonest in the context of an allegation of dishonest misappropriation are: 1. Identify the knowledge, belief or intent which is said to render that conduct dishonest, and 2. Decide whether the accused had that knowledge, belief or intent, and, if so, 3. Determine whether, on that account, the conduct was dishonest. Generally, this is to be decided by the standards of ordinary, decent people. The person accused of the dishonest conduct need not have realised that his or her conduct was dishonest by the standards of ordinary, decent people. 1. Mr Leslie took steps to conceal the true use of the $209,856.46 by using confusing and misleading references in the accounting records (see [24] – [26], above). From this we infer that he believed that the concealment of the manner of the disbursement of the money might be in his interest, which leads us to further infer that he knew that his disbursement of the funds was a wrongful use of those funds. 2. We would expect any solicitor, particularly an experienced solicitor, to know that trust money held on account of an estate was not to be disbursed for purposes unrelated to the estate. Ordinary, decent people would consider the disbursement of the funds of an estate, by the solicitor whose trust fund held those funds, for purposes unrelated to the estate, to be dishonest. Mr Leslie's conduct in disbursing the sums held in the Trust Account on account of the Lambie estate to recipients with no interest or connection to the Lambie estate constituted dishonest misappropriation. 3. Mr Leslie, as an experienced solicitor, must have known that he was not entitled to take fees without rendering an account to Mr Lambie and receiving authorisation from him. Mr Leslie was aware of the terms of the costs agreement and therefore aware that the payment was contrary to it. Mr Leslie received a benefit from the money paid into the office account, as he gained the use of that money. Ordinary, decent people would consider the taking of fees by a solicitor from the trust funds of an estate, without rendering an account and without the authorisation of the executor, to be dishonest. The transfer of $15,291 from the Trust Account to the Office Account was dishonest misappropriation. 4. The balance of the funds transferred to the Office Account from the Trust Account was $74,596.14, which was paid to Ms Hands for whom Mr Leslie was acting in separate proceedings. Clearly, that transfer constituted dishonest misappropriation for the reasons set out in [45]. 5. The disbursement of $40,122.39 to 'The Bank of Tokyo – Mitsubishi UFJ Ltd', $142.20 to Onepath Life and $79,704.73 to the Controlled Monies Account from the Trust Account all constituted dishonest misappropriation for the reasons set out in [45]. Ms Camilleri's matter – facts 1. Mr Leslie acted for Ms Camilleri in relation to a proposed purchase of a property 'off the plan' in NSW ('the property'). 2. On 18 April 2017, an employee of Leslie Hargrave Lawyers Pty Ltd sent Ms Camilleri an email informing her that stamp duty of $58,935 would be payable on 10 May 2017 in relation to the purchase of the property, and requesting that Ms Camilleri either provide Leslie Hargrave Lawyers Pty Ltd with a cheque for that amount payable to the Chief Commissioner of State Revenue or deposit that amount into the Trust Account. 3. On 4 May 2017, in response to that request, Ms Camilleri deposited $58,935 into the Trust Account for the purpose of the payment of the stamp duty in relation to the purchase of the property. 4. Immediately prior to Ms Camilleri's deposit into the Trust Account, the balance of the Trust Account was $33.29. 5. Mr Leslie never paid the stamp duty for the purchase of the property. 6. Between 5 May 2017 and 21 June 2017, Mr Leslie caused the entire amount of $58,935 held on account of Ms Camilleri to be withdrawn and disbursed in the following way: 1. $318.46 to Onepath Life, 2. $38,790 to the Office Account, 3. $20,000 to Mr Lambie plus $10 for the bank cheque. 1. Mr Lambie had no connection with Ms Camilleri or the purchase of the property. Ground 2 – The respondent misappropriated trust funds – Ms Camilleri 1. Mr Leslie knew that the purpose of the deposit of $58,935 into the Trust Account by Ms Camilleri was for the payment of stamp duty on 10 May 2017. Mr Leslie also knew that the payments set out in [54] were unrelated to the purchase of the property by Ms Camilleri and were not authorised by her. 2. Plainly, the purpose of the payment of $20,000 to Mr Lambie was to avoid Mr Lambie discovering that the funds paid into the Trust Account on account of the Lambie estate had been entirely disbursed for purposes unrelated to the Lambie estate. 3. Ordinary, decent people would consider the use made by Mr Leslie of Ms Camilleri's funds, which had been entrusted by her to the Trust Account, in the manner set out in [54], to be dishonest. 4. We determine that the disbursement by Mr Leslie of the sum of $58,935 held in the Trust Account on account of Ms Camilleri amounted to dishonest misappropriation. Ground 3: The respondent manipulated trust accounting records to conceal misappropriation of trust money 1. The evidence of Mr Leslie's manipulation of the records of the Trust Account to conceal the misappropriation of trust money is set out in the exhibits to the affidavit of Mr Ward, including his report to the Law Society dated 13 June 2018 ('Mr Ward's report'). 2. The particulars pleaded in relation to Ground 3 are founded in the evidence of Mr Ward, which we take to be uncontested by Mr Leslie. 3. Mr Leslie, as we have said, was at all material times the sole principal of Leslie Hargrave Lawyers Pty Ltd. Mr Leslie was also the sole authorised signatory of the Trust Account. 4. The allegations relating to Ground 3 are connected with Mr Leslie's activities concerning the funds of the Lambie estate matter. 5. We find that the facts alleged in the relevant particulars of the application in relation to Ground 3 have been established on the evidence. 6. Those particulars are as follows: The Estate of the late Mary Patricia Lambie December 2016 46 The trust cash payments report for the period 1 December 2016 to 31 December 2016 records the following payments made from monies held in the Trust Account on trust for the Lambie Estate Matter: Matter No, Client Name; Date Payment No. Paid To Matter Description Payment Amnt. Reason 23/12/2016 174052 EFT BSB-Ac: 012315-485198026 Leslie Hargrave Lawyers Matter no. 216144, Mr $8,946.00 Peter Harold Lambie; Probate Legal costs for Probate 23/12/2016 780670 EFT BSB-Ac: 012315-485198026 Daniel Brem Matter no 216144, Mr Peter Harold Lambie, Probate Proceeds of estate $9,130 84 23/12/2016 780713 EFT BSB-Ac: 037151-215032 Cheryl Makin Matter no. 216144, Mr Peter Harold Lambie; Probate Proceeds of estate $29,130.84 47. The amount of $8,946.00 was withdrawn from the Trust Account and deposited into the Office Account on 23 December 2016: (a) in the absence of any tax invoice rendered by the Respondent to Peter Lambie; and (b) without the authorisation or direction of Peter Lambie. 48. Prior to the deposit of $8,946.00 on 23 December 2016, the Office Account was overdrawn by $48,234.81. 49. The Respondent acted for the Estate of the late Caroline Brem - matter no. 215090 (Brem Estate Matter). 50. The amount of $9,130.84 was withdrawn from the Trust Account and deposited into the Office Account on 15 December 2016. 51. Cheque 1539 for $9,130.84 dated 15 December 2016 was drawn from the Office Account and made payable to Daniel Marcus Brem. 52. The payment to Daniel Brem was the final distribution owing to him as a beneficiary of the Brem Estate. 53. As at 15 December 2016 $7,130.80 was held in trust in connexion with the Brem Estate Matter. 54. Contrary to the entry in the trust cash payment report for the period 1 December 2016 to 31 December 2016, the amount of $9,130.84 was not a distribution of the proceeds of the Lambie Estate Matter. 55. Daniel Brem was not entitled to any part of the proceeds of the Lambie Estate Matter. 56. The amount of $29,130.84 was withdrawn from the Trust Account and deposited into the Office Account on 15 December 2016. 57. Cheque 1540 for $29,130.84 dated 15 December 2016 was drawn from the Office Account and made payable to Cheryl Makin. 58. The payment to Cheryl Makin was the final distribution owing to her as a beneficiary of the Brem Estate. 59. The Applicant repeats paragraph 53 of this Application. 60. Contrary to the entry in the trust cash payment report for the period 1 December 2016 to 31 December 2016, the amount of $29,130.84 was not a distribution of the proceeds of the Lambie Estate Matter. 61. Cheryl Makin was not entitled to any part of the proceeds of the Lambie Estate Matter. January 2017 62. The trust bank reconciliation report for January 2017 records the following debit adjustments: Date, Amount Description 22/12/2016 $1,380.00 Fees for holding funds on account Lambie 31/01/2017 $74,596.14 Payment of distibution [sic] of estate to Louise Hands re Lambie estate 31/01/2017 $4,965.00 Legal Cost Lambie estate 3000 and 1965 31/01/2017 $142.20 One path life insurance Lambie 31/01/2017 $824.00 Adjustment in recording payment in Lambie 63. The amount of $1,380.00 was withdrawn from the Trust Account and deposited into the Office Account on 22 December 2016. 64. Prior to the deposit of $1,380.00 on 22 December 2016 the Office Account was overdrawn by $45,938.81. 65. The amount of $1,380.00 was withdrawn from the Trust Account and deposited into the Office Account on 22 December 2016: (a) in the absence of any tax invoice rendered by the Respondent to Peter Lambie; and (b) without the authorisation or direction of Peter Lambie. 66. The amount of $74,596.14 was withdrawn from the Trust Account and deposited into the Office Account on 9 January 2017. 67. Cheque 1548 for $74,596.14 dated 9 January 2017 was drawn from the Office Account and made payable to Louise Hands. 68. The payment to Louise Hands was derived from her entitlement to the proceeds of sale of a property in Riverview. 69. The trust trial balances as at 31 December 2016 and 31 January 2017 record in relation to matter no. 215156 Louise Catherine Hands: (a) the amount held on trust for matter no. 215156 was $441.76; and (b) the last transaction formatter no. 215156 occurred on 29 July 2016. 70. Contrary to the entry in the trust bank reconciliation report for January 2017, the amount of $74,596.14 was not a distribution of the proceeds of the Lambie Estate Matter. 71. Louise Hands was not entitled to any part of the proceeds of the Lambie Estate Matter. 72. The amount of $3,000.00 (being part of $4,965.00) was withdrawn from the Trust Account and deposited into the Office Account on 3 January 2017: (a) in the absence of any tax invoice rendered by the Respondent to Peter Lambie; and (b) without the authorisation or direction of Peter Lambie. 73. Prior to the deposit of $3,000.00 on 3 January 2017, the Office Account was overdrawn by $46,668.09. 74. The amount of $1,965.00 (being part of $4,965.00) was withdrawn from the Trust Account and deposited into the Office Account on 4 January 2017: (a) in the absence of any tax invoice rendered by the Respondent to Peter Lambie; and (b) without the authorisation or direction of Peter Lambie. 75. Prior to the deposit of $1,965.00 on 4 January 2017, the Office Account was overdrawn by $46,600.73. March 2017 76. The trust trial balance as at 31 March 2017 records that: (a) $45,068.24 was held in the Trust Account on behalf of the Lambie Estate Matter; and (b) the total funds held in the Trust Account for 13 matters was $58,013.59. 77. The trust bank reconciliation report for March 2017 records the following debit adjustments for the Lambie Estate Matter: Date Amount Description 31/03/2017 $142.20 One Path Life8lnsurance [sic] payment for Lambie 31/03/2017 $6,923.00 Adjystment [sic] for Lambie 31/03/2017 $44,630.83 Payments made in Lambie estate matter not recorded $51,696.03 78. By reason of the matters set out in paragraphs 76 and 77 above, there was a trust ledger deficiency of $6,627.79 in relation to the Lambie Estate Matter. 79. The trust bank reconciliation report for March 2017 records the following presented cheques' By reason of the matters set out in paragraphs 76 and 77 above, there was a trust ledger deficiency of $6,627.79 in relation to the Lambie Estate Matter. The trust bank reconciliation report for March 2017 records the following presented cheques' Date Amount Description Chq # 737843 Transfer funds for partial distribtion [sic] of 03/02/2017 $20,000.00 estate to Peter Lambie Payee. Leslie Hargrave Pty Ltd 31/03/2017 $14,000.00 Chq # 543456 Partial distrbution [sic] of estate Payee: Peter Lambie 80. The amount of $20,000.00 was withdrawn from the Trust Account and deposited into the Controlled Monies Account on 3 February 2017. 81. The amount of $20,000.00 was subsequently withdrawn from the Controlled Monies Account and deposited into the Respondent's Personal Account on 3 February 2017 82. The Trust Account bank statements do not record any withdrawal of $14,000.00 in March 2017. 83. Peter Lambie did not receive either of the payments referred to in the table in paragraph 79 above. 84. The trust cash payments report for the period 1 March 2017 to 31 March 2017 records the following payments made from monies held on trust for the Lambie Estate Matter: Date Payment No. PaidTo- Matter No, Client Name; Matter Description Payment Amnt Reason 09/01/2017 (entered into system on 31/03/2017) 1 Louise Hands Matter no. 216144, Mr Peter Harold Lambie; Probate Proceeds of sale $74,596.14 31/03/2017 682417 EFT BSB-Ac: 012315-485198026 kleslie Hargrve Pty Ltd [sic] Matter no. 216144, Mr Peter Harold Lambie; Probate Legal costs for asminstration [sic] of estate $8,800.00 Matter no. 216144, Mr Peter Harold Lambie; 03/02/2017 737843 EFT BSB-Ac: 012315-5268145833 Leslie Hargrave Pty Ltd Probate $20,000.00 Transfer funds for partial distribtion distribtion [sic] of estat... Matter no. 216144, Mr Peter Harold Lambie, 31/03/2017 18u2x EFT BSB-Ac 012315-9801784 One Path Life Insurance Probate $184.40 Payment of Life Insuarnc [sic] premium 85. Contrary to the entry in the trust cash payments report, the amount of $74,596.14 was not a distribution of the proceeds of the Lambie Estate Matter 86. The Applicant repeats paragraphs 67 to 71 of this Application. 87. The Trust Account bank statements do not record the withdrawal of $8,800.00 in March 2017. 88. The Applicant repeats paragraphs 80 and 81 of this Application. 89. Contrary to the entry in the trust cash payments report, the amount of $184.40 was withdrawn from the Trust Account on 21 March 2017 and paid to account number 1001261367. 1. The false entries made in the accounts set out above concealed the fact that, by 31 March 2017, the Trust Account contained no funds on account of the Lambie estate matter. This served to conceal the misappropriation of trust funds detailed above, in relation to the Lambie estate matter. 2. Paragraphs 79 to 83 of the particulars to the application, quoted above in [65], relate to the false record which said that a payment of $20,000 was made to Mr Lambie on 3 February 2017 and a further payment of $14,000 was made to Mr Lambie on 31 March 2017. The $20,000 was deposited in the Controlled Money Account and subsequently withdrawn and deposited in Mr Leslie's personal account. No withdrawal of $14,000 from the Trust Account in March 2017 is recorded in the bank statements. 3. The Trust Account trial balances as at 31 May 2016 record a balance of $1,751,350.20. However, the Trust Account bank statement records the balance as at 31 May 2016 as $222,467.27. A trial balance is a report, run at the end of an accounting period, listing the end balance in each account. It relied on the accounting records of Leslie Hargrave Lawyers Pty Ltd. Its purpose is to ensure that debits and credits balance. The balance of a bank statement, obviously, is a record of the actual sum of money recorded by the financial institution as standing to the credit of an account. In this matter, the accuracy of the bank statements is not contested. 4. In the copy of the trust trial balances printed on 26 July 2016, the trust trial balance to 30 June 2016 was recorded as $1,632,776.43. The copy of the trust trial balances printed on 10 April 2017 shows the trust trial balance to 30 June 2016 as $1,751,350.20. The Trust Account bank statement records the balance of the Trust Account as at 30 June 2016 as $149,969.72. 5. Clearly, there was manipulation of the records of the legal practice in relation to the Trust Account. We have found that Mr Leslie dishonestly misappropriated funds. From the discrepancies between the trust trial balances and the bank statements, it is clear that the manipulation of the Trust Account entries at the legal practice created difficulties in tracing some of the funds which had been wrongfully dispersed. Ground 3 has been established. Ground 4: The respondent failed to comply with his obligations under the legal profession legislation in relation to holding trust money. 1. The Uniform Law provides, in s 146: 146 Intermixing money A law practice must not mix trust money with other money unless authorised to do so by the designated local regulatory authority, and only in accordance with any conditions the designated local regulatory authority imposes in relation to that authorisation. Civil penalty: 50 penalty units. 1. It is evident from the material annexed to the affidavit of Mr Ward, particularly Mr Ward's report of 13 June 2018, that Leslie Hargrave Lawyers Pty Ltd did not maintain records in relation to the Trust Account for the period 1 April 2017 to 14 December 2017. 2. The withdrawal of $89,887.14 from the funds held in the Trust Account on account of the Lambie Estate matter has been discussed above (see [25]). Those funds were transferred to the Office Account, when the Office Account contained money which was not trust money, thus intermixing trust money with other money, in breach of s 146 of the Uniform Law. 3. The sum of $38,790 was withdrawn from the Trust Account money deposited by Ms Camilleri to be used to pay stamp duty. That sum was deposited in the Office Account at a time when that account had a positive balance, thus intermixing trust money with money which was not trust money, in breach of s 146 of the Uniform Law. 4. We have referred to the Houghton estate matter above. The Controlled Money Account was opened in the Houghton estate matter in 2010. By 14 January 2016, the balance of the Controlled Money Account was $1,411.51, comprising trust money held on account of the Houghton estate. From 1 January 2016 to 6 December 2017, $110,000 was withdrawn from the Office Account and deposited in the Controlled Money Account and $243,764.07 was withdrawn from the Controlled Money Account and deposited in the Office Account. In addition, $4,200 was withdrawn from Mr Leslie's personal account and deposited into the Controlled Money Account. That sum was not trust money. $53,540 was withdrawn from the Controlled Money Account and deposited into Mr Leslie's Personal Account. All of these transactions involved the mixing of trust money with money which was not trust money, but only the transaction relating to $110,000 and $243,764.07 were particularised in the application, so those are the transactions we will take into account. Ground 4.2 – Breach of s 147 of the Uniform Law 1. The Uniform Law provides, in s 147: 147 Keeping trust records (1) A law practice must keep in permanent form trust records in relation to trust money received by the law practice. Civil penalty: 50 penalty units. (2) The law practice must keep the trust records— (a) in accordance with the Uniform Rules; and (b) in a way that at all times discloses the true position in relation to trust money received for or on behalf of any person; and (c) in a way that enables the trust records to be conveniently and properly investigated or externally examined; and (d) for a period of 7 years after the last transaction entry in the trust record, or the finalisation of the matter to which the trust record relates, whichever is the later. Civil penalty: 50 penalty units. (3) A law practice must not knowingly receive money or record receipt of money in the law practice's trust records under a false name. Civil penalty: 100 penalty units. (4) If a law practice is aware that a person on whose behalf trust money is received by the law practice is commonly known by more than one name, the law practice must ensure that the law practice's trust records record all names by which the person is known. Penalty: 50 penalty units. (5) In this section, a reference (however expressed) to keeping trust records includes a reference to making and keeping backup copies of trust records. 1. Mr Ward, in his report of 13 June 2018, said, at [11.1]: Attempts to obtain the trust accounting records for Leslie Hargrave Pty Ltd trust account by both Mr Flynn and I have been unsuccessful. Mr Leslie failed to comply with a Notice under s 370 of the LPUL 2014 compelling the provision of the trust records delivered personally into his hands. I have obtained bank account statements and account related information from ANZ Bank to assist in my investigation. I also managed to obtain limited records from the external examiner of the Leslie Hargrave Pty Ltd trust account for the trust years 2015/2016 and 2016/2017. I have no trust records from 31 March 2017 until Mr Flynn was appointed on 14 December 2017. 1. The failure by Mr Leslie to keep trust records in a permanent form from 31 March 2017 to 14 December 2017 is a breach of s 147(1) of the Uniform Law. 2. Mr Leslie failed to maintain a trust ledger in relation to the Lambie Estate matter, which is a further breach of s 147(1) of the Uniform Law. 3. Furthermore, to the extent that trust records were kept, those trust records did not disclose the true position in relation to trust money received by or on behalf of the Lambie estate, in breach of s 147(2)(b) of the Uniform Law. 4. There was no trust ledger in relation to Ms Camilleri's matter. This is a breach of s 147(1) of the Uniform Law. In addition, to the extent that trust records were kept, those trust records did not disclose the true position in relation to the trust money received on behalf of Ms Camilleri, in breach of s 147(2)(b) of the Uniform Law. Ground 4.3: Breach of s 42 of the Legal Profession Uniform General Rules 2015. 1. The Legal Profession Uniform General Rules 2015 (NSW) ('the General Rules') provide, in rule 42: 42 Withdrawal of trust money for payment of legal costs (1) This rule prescribes, for the purposes of Division 2 of Part 4.2 of the Uniform Law (see section 144(2)(b) of that Law), the procedure for the withdrawal of trust money held in a general trust account or controlled money account of a law practice for payment of legal costs owing to the law practice by the person for whom the trust money was paid into the account. (2) The trust money may be withdrawn in accordance with the procedure set out in any applicable subrule of this rule. (3) The law practice may withdraw the trust money if the law practice has given the person a bill relating to the money and referring to the proposed withdrawal, and— (a) if the person does not, at the end of the period of 7 business days after the person was given the bill, object to the amount specified in the bill, or (b) if the person objects to the amount specified in the bill within the period of 7 business days after being given the bill but has not referred the matter to the designated local regulatory authority or for costs assessment, and the period of 30 days after the later of the following dates has expired— (i) the date on which the person was given the bill, (ii) the date on which the person received an itemised bill following a request made in accordance with section 187 of the Uniform Law, or (c) if the money otherwise becomes legally payable. (4) The law practice may withdraw the trust money (whether or not the law practice has given the person a bill relating to the money)— (a) if the money is withdrawn in accordance with instructions that have been received by the law practice and that authorise the withdrawal, and (b) if, before effecting the withdrawal, the law practice gives or sends to the person— (i) a request for payment, referring to the proposed withdrawal, or (ii) a written notice of withdrawal. Note. See also subrule (7), which relates to subrule (4). (5) The law practice may withdraw the trust money— (a) if the money is owed to the law practice by way of reimbursement of money already paid by the law practice on behalf of the person, and (b) if, before effecting the withdrawal, the law practice gives or sends to the person— (i) a request for payment, referring to the proposed withdrawal, or (ii) a written notice of withdrawal. Note. See also subrule (8), which relates to subrule (5). (6) If the law practice has given the person who is a commercial or government client a bill specifying the amount payable by the person for legal costs, the law practice may withdraw the money so long as— (a) the money is withdrawn in accordance with a costs agreement between the law practice and the person, and (b) the costs agreement complies with the legislation under which it is made and authorises the withdrawal, and (c) before effecting the withdrawal, the law practice gives or sends to the person a request for payment, referring to the proposed withdrawal. (7) In relation to subrule (4)— (a) if the authorisation referred to in subrule (4)(a) authorises withdrawal of part only of the money— (i) the law practice may withdraw the money to that extent only, and (ii) if the law practice has given the person a bill relating to the money as referred to in subrule (3)(a)—subrule (3)(b)(i) and (ii) are taken to apply to the remaining part of the amount specified in the bill, and (b) instructions referred to in subrule (4)— (i) if given in writing, must be kept as a permanent record, or (ii) if not given in writing, must be confirmed in writing either before, or not later than 5 working days after, the law practice effects the withdrawal and a copy must be kept as a permanent record. (8) For the purposes of subrule (5), money is taken to have been paid by the law practice on behalf of the person when the relevant account of the law practice has been debited. Note. Rule 73 provides for the giving of bills. 1. As set out above, in [25], $15,291 of the $89,887.14 transferred from the money held in the Trust Account on account of the Lambie estate matter to the Office Account was transferred for legal costs, without the provision of a bill and without the instructions or authorisation of Mr Lambie. None of the procedures set out in Rule 42 of the General Rules were complied with in the taking of this sum for legal costs or in the withdrawal of the trust money. 2. The withdrawal of $58,935 from money held in the Trust Account on account of Ms Camilleri included $38,790 paid into the Office Account. Again, none of the procedures set out in Rule 42 of the General Rules were complied with in the withdrawal of this trust money. Ground 5: The respondent contravened s 139 of the Uniform Law. 1. The Uniform Law provides, in s 139: 139 Controlled money (1) As soon as practicable after receiving controlled money, a law practice must deposit the money in the account specified in the written direction relating to the money. Civil penalty: 50 penalty units. (2) The law practice must hold controlled money deposited in a controlled money account in accordance with subsection (1) exclusively for the person on whose behalf it was received. Civil penalty: 50 penalty units. (3) Subject to a court order or as authorised by law, the law practice that holds money deposited in a controlled money account must not disburse the money except in accordance with— (a) the written direction relating to the money; or (b) a later written direction given by or on behalf of the person on whose behalf the money was received. Civil penalty: 50 penalty units. (4) The law practice must maintain the controlled money account, and account for the controlled money, as required by the Uniform Rules. Civil penalty: 50 penalty units. (5) The law practice must keep a written direction mentioned in this section for 7 years. Civil penalty: 50 penalty units. (6) The law practice must ensure that the controlled money account is used for the deposit of controlled money received on behalf of the person referred to in subsection (2), and not for the deposit of controlled money received on behalf of any other person, except to the extent that the Uniform Rules otherwise permit. Civil penalty: 50 penalty units. (7) The Uniform Rules may make provision with respect to the receipt of controlled money, the establishment and maintenance of controlled money accounts, the withdrawal of controlled money, and the keeping of registers of controlled money. 1. As we have said, the Controlled Money Account (referred to in the application as the Controlled Monies Account) was opened in 2010 solely for the purposes of the Houghton estate matter. 2. None of the money deposited in the Controlled Money Account between 2 March 2016 and 3 February 2017 related to the Houghton estate matter. 3. Neither Mr Leslie nor Leslie Hargrave Lawyers Pty Ltd held written directions to make any of the deposits into the Controlled Money Account which were made between 2 March 2016 and 3 February 2017. 4. The particulars pleaded in the application for Ground 5 are as follows: Monies transferred between the Trust Account and the Controlled Monies Account 108. Between 2 March 2016 and 3 February 2017 the Respondent caused the following amounts totalling $1,611,388.98 to be withdrawn from the Trust Account and deposited into the Controlled Monies Account: Date Amount 2 March 2016 $34,278.80 $653,080.09 1 April 2016 $653,080.09 21 November 2016 $70,000.00 17 January 2017 $80,000.00 $101,250.00 3 February 2017 $20,000.00 109. None of the deposits referred to in the table in paragraph 108 above were made pursuant to a written direction in breach of section 139(1) of the Uniform Law. 110. The sum of $34,278.80: (a) was originally deposited into the Trust Account on 8 February 2016; (b) was the balance of the deposit money received in relation to the sale of a property in Riverview; (c) had no connexion with the Houghton Estate or Brian Houghton; and (d) was withdrawn from the Controlled Monies Account and deposited into the Trust Account on 30 March 2016. 111. The sum of $653,080.09: (a) was originally deposited into the Trust Account on 5 February 2016; (b) formed part of the proceeds of the sale of a property in Riverview; (c) had no connexion with the Houghton Estate or Brian Houghton; (d) was withdrawn from the Controlled Monies Account and deposited into the Trust Account on 30 March 2016; and (e) was withdrawn from the Trust Account and deposited into the Controlled Monies Account again on 1 April 2016. 112. The sum of $101,250.00: (a) was originally deposited into the Trust Account on 1 December 2016; (b) was received in relation to the purchase of a property by Aaron James Ross; (c) had no connexion with the Houghton Estate or Brian Houghton; (d) was withdrawn from the Controlled Monies Account and deposited into the Trust Account on 31 January 2017; and (e) was withdrawn from the Trust Account on 31 January 2017 and paid to Garry Hobbs by bank cheque. Monies transferred between the Personal Account and the Controlled Monies Account 113. The Applicant repeats paragraph 100 above. 114. None of the deposits into the Controlled Monies Account from the Respondent's Personal Account referred to in paragraph 100 above were made pursuant to a written direction in breach of section 139(1) of the Uniform Law. 115. None of the withdrawals from the Controlled Monies Account and deposits into the Respondent's Personal Account referred to in paragraph 100 above were made pursuant to a written direction in breach of section 139(3) of the Uniform Law. Conclusion - breach of section 139 of the Uniform Law 116. By reason of the matters set out in paragraphs 107 to 115 above the Respondent has breached section 139 of the Uniform Law in that the Respondent: (a) deposited money into the Controlled Monies Account without a written direction contrary to section 139(1) of the Uniform Law; (b) held money in the Controlled Monies Account for persons other than Brian Houghton or the Houghton Estate contrary to sections 139(2) and (6) of the Uniform Law; (c) disbursed money from the Controlled Monies Account without a written direction contrary to section 139(3) of the Uniform Law; (d) failed to account for the money held in the Controlled Monies Account contrary to section 139(4) of the Uniform Law; and (e) failed to keep any written directions for seven years contrary to section 139(5) of the Uniform Law. 1. The facts relied upon with respect to ground 5 of the application have been proven to the Briginshaw standard. Mr Leslie breached s 139 of the Uniform Law in the manner alleged. Ground 6: The respondent failed to comply with a notice issued to him under section 370 of the Uniform Law. 1. On 1 May 2018, Mr Ward issued a notice to the respondent under s 370 of the Uniform Law ('the s 370 notice'). 2. Mr Ward served the s 370 notice, personally, upon Mr Leslie on 1 May 2018. The s 370 notice required the production of trust account records by 11 May 2018. 3. Mr Leslie did not comply with the s 370 notice, nor did he give any explanation for his failure to comply with the s 370 notice. 4. Mr Leslie is therefore in breach of s 370(2) of the Uniform Law. Summary as to allegations 1. The six grounds for disciplinary action pleaded, which are set out in [5] above, have all been proven against Mr Leslie consistently with the particulars pleaded in the application for disciplinary findings and orders. 2. The next step is for us to consider whether or not the conduct established amounts to professional misconduct, as alleged, or 'unsatisfactory professional conduct'. Characterisation of Mr Leslie's conduct 1. 'Unsatisfactory professional conduct' is defined in s 296 of the Uniform Law as follows: 296 Unsatisfactory professional conduct For the purposes of this Law, unsatisfactory professional conduct includes conduct of a lawyer occurring in connection with the practice of law that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent lawyer. 1. 'Professional misconduct' is defined in s 297 of the Uniform Law as follows: 297 Professional misconduct (1) For the purposes of this Law, professional misconduct includes— (a) unsatisfactory professional conduct of a lawyer, where the conduct involves a substantial or consistent failure to reach or maintain a reasonable standard of competence and diligence; and (b) conduct of a lawyer whether occurring in connection with the practice of law or occurring otherwise than in connection with the practice of law that would, if established, justify a finding that the lawyer is not a fit and proper person to engage in legal practice. (2) For the purpose of deciding whether a lawyer is or is not a fit and proper person to engage in legal practice as referred to in subsection (1)(b), regard may be had to the matters that would be considered if the lawyer were an applicant for admission to the Australian legal profession or for the grant or renewal of an Australian practising certificate and any other relevant matters. 1. The Law Society referred us to the following authorities: 77. In Law Society of New South Wales v Jones (unreported Court of Appeal (NSW) 27 July 1978) Street CJ (Reynolds and Samuels JJA agreeing) stated: Reliability and integrity in the handling of trust funds are fundamental prerequisites in determining whether an individual is a fit and proper person to be entrusted with the responsibilities belonging to a solicitor. Members of the public, many of them wholly inexperienced and unskilled in matters of business or of law, inevitably must put great faith and trust in the honesty of solicitors in the handling of moneys on their behalf. The Court must ensure that this trust is not misplaced. 78. In New South Wales Bar Association v Cummins (2001) 52 NSWLR 279 at [19]-[20], Spigelman CJ stated: [19] Honesty and integrity are important in many spheres of conduct. However, in some spheres significant public interests are involved in the conduct of particular persons and the state regulates and restricts those who are entitled to engage in those activities and acquire the privileges associated with a particular status. The legal profession has long required the highest standards of integrity. [20] There are four interrelated interests involved. Clients must feel secure in confiding their secrets and entrusting their most personal affairs to lawyers. Fellow practitioners must be able to depend implicitly on the word and the behaviour of their colleagues. The judiciary must have confidence in those who appear before the courts. The public must have confidence in the legal profession by reason of the central role the profession plays in the administration of justice. Many aspects of the administration of justice depend on the trust by the judiciary and/or the public in the performance of professional obligations by professional people. 79. Misappropriation of trust money is a serious breach of a solicitor's obligations. As stated by Meagher JA in Prothonotary of the Supreme Court of New South Wales v Dimetrious [2015] NSWCA 258 at [21]: 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. 80. See also Barwick v Council of the Law Society of New South Wales [2004] NSWCA 32 at [118] per Ipp JA: 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. 1. The Law Society submitted that Mr Leslie's conduct as alleged in grounds 1 to 5 involved significant dishonesty, including the misappropriation of funds which were held on trust for clients, and the manipulation of trust accounting records to conceal that misappropriation. The failure by Mr Leslie to comply with his obligations under s 139 of the Uniform Law was part of the course of conduct in which he engaged, one of the objectives of which was the misappropriation of funds. We agree. 2. Mr Leslie's course of conduct, which involved the conduct particularised in relation to grounds 1 to 5 of the application, took place over about eleven months from December 2016 to 16 November 2017, when Mr Leslie's practising certificate was suspended. 3. From the first unauthorised withdrawal of money by Mr Leslie from the Lambie estate fund in the Trust Account until 16 November 2017, when he ceased to practise the law, Mr Leslie's conduct of the Trust Account, in his periodic dishonest misappropriations, his manipulation of records and his failure to comply with his common law and statutory obligations, fell well short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent lawyer. The conduct was a substantial and consistent failure to reach or maintain a reasonable standard of competence and diligence. The conduct was sustained over a period of about 11 months. 4. The dishonesty shown by Mr Leslie's conduct, as particularised in relation to grounds 1 to 5, justifies a finding that Mr Leslie is not a fit and proper person to engage in legal practice. 5. Having found that the Law Society has proven, to the Briginshaw standard, that Mr Leslie is guilty of the conduct alleged in relation to Grounds 1 to 5, we determine that each Ground individually constitutes professional misconduct. 6. Pursuant to s 466(6) of the Uniform Law, the failure to comply with s 370 is capable of constituting unsatisfactory professional conduct or professional misconduct. 7. It seems to us that Mr Leslie's failure to comply with the s 370 notice is an additional element to the course of conduct involving the dishonest misappropriation and manipulation of trust records to conceal that dishonest misappropriation. In failing to comply with the s 370 notice, Mr Leslie has failed to co-operate in a significant way with his professional regulator in the performance of its statutory function and has, by that failure, made the regulator's task in discovering what has been done with the funds which ought to be in the Trust Account more difficult than it ought to be. 8. In context, we consider that Mr Leslie's failure to comply with the s 370 notice constitutes professional misconduct. Mr Leslie's failure to comply with the s 370 notice was a substantial failure to maintain the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent lawyer. The failure, in context, would justify a finding that Mr Leslie is not a fit and proper person to engage in legal practice. Protective Orders 1. In Law Society of New South Wales v Walsh [1997] NSWCA 185 ('Walsh'), Beazley JA said, at p 40: It is undisputed that disciplinary proceedings are concerned with the protection of the public: Wentworth v New South Wales Bar Association (1992) 176 CLR 239 per Deane, Dawson, Toohey, and Gaudron JJ at 251; Clyne v New South Wales Bar Association (1960) 104 CLR 186 at 201-202; New South Wales Bar Association v Evatt (1986) 117 CLR 177 at 183-184; Weaver v Law Society of New South Wales (1979) 142 CLR 201 at 207; and Walter v Council of Queensland Law Society Inc (1988) 62 ALJR 153 at 157. The court's duty to protect the public is not confined to the protection of the public against further misconduct by the particular practitioner who is the subject of the disciplinary proceedings. It extends to protecting the public from similar defaults by other practitioners. Thus, it is relevant to take into account the effect the order will have upon the understanding in the profession and amongst the public of the standard of behaviour required of solicitors. 1. Walsh concerned the Legal Profession Act 1987, but Beazley JA's words apply to disciplinary proceedings under the Uniform Law. 2. In Dupal v Law Society of NSW [1990] NSWCA 56 ('Dupal'), Kirby P said, at p 2: But for the reasons which I have stated, the normal consequence of the misuse of entrusted funds by a solicitor, and a finding of wilful breaches of the statutory prohibition in that regard, is removal of the name of the solicitor from the roll. 1. Handley JA said, in Dupal, at p 12: This Court would be departing from a long course of authority if it were to allow the appeal and substitute a period of suspension for the order of the Tribunal removing the appellant from the roll. Counsel were not able to refer us to any case where a solicitor found guilty of misappropriation or wilful contraventions of s41(1) has not been struck off the roll. Any decision to the contrary would signal to the profession and the community that this Court was no longer insisting on solicitors maintaining the highest standards of personal honesty and integrity in their dealings with clients and the public and in the handling of monies entrusted to their charge. The maintenance of those standards and the public interest require, in my judgment, that this appeal be dismissed. It is well established that the jurisdiction being exercised in this case is not penal but disciplinary and that it must be exercised for the benefit of the public. Sympathy for the appellant and for the tragedy that he has brought on himself and his family by his inability to live up to the high standards which this Court and the profession demand of solicitors cannot be allowed to deflect this Court from doing its duty. 1. In New South Wales Bar Association v Cummins [2001] NSWCA 284 at [24], Spigelman CJ, after citing the observations of McHugh JA in Prothonotary of the Supreme Court of NSW v Ritchard (Unreported, Court of Appeal NSW, 31 July 1987) to similar effect, said: "An order for the involuntary removal of the name of a practitioner from the Roll of solicitors is made only because the probability is that the solicitor is permanently unfit to practise. Unless the Court is persuaded that the probability exists, the proper order to make will usually be one of suspension or fine instead of removal." 1. There is authority recognising that reliability and integrity in the handling of trust funds are fundamental prerequisites to determining whether a person is a fit and proper person to be entrusted with a right to practice as a solicitor (see Law Society of New South Wales v Jones (unrep. NSWCA, 27 July 1978 per Street CJ). 2. In this matter, Mr Leslie has not sought to explain or excuse his conduct. He has said in his Reply that he does not oppose the orders sought by the Law Society. 3. We determine that Mr Leslie is probably permanently unfit to practice as a solicitor. 4. We make the following orders: 1. The Tribunal recommends that James Edward Leslie be removed from the roll of solicitors kept by the Supreme Court of New South Wales. 2. The respondent is to pay the costs of the applicant to be agreed or assessed. ********** I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar Amendments 23 July 2020 - Typographical error in paragraph 102 and 103. 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: 23 July 2020