IN THE MATTER of the application of NOEL NORMAN DENNIS to be restored to the ROLL OF SOLICITORS and IN THE MATTER of the LEGAL PRACTITIONERS' ACT SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL SAMUELS, MAHONEY and Hope JJA 5, 6 and 7 September 1988, 23 December 1988 [1988] NSWCA 37 LEGAL PRACTITIONERS — discussion of principles governing application for restoration to the roll of solicitors by a former solicitor struck off for professional misconduct. ORDERS Motion is dismissed — applicant must pay Law Society's costs of the application. Samuels JA MOTION FOR READMISSION This is an application by a former solicitor, who was struck off for professional misconduct in July 1981, to be restored to the roll of solicitors. The principles of law which are to be applied are not in doubt. The applicant bears the onus - which is a heavy one - of satisfying the Court that he should be readmitted, and in order to do so he must displace the decision as to probable permanent unfitness which was the basis of his removal: Ex parte Munro, Re Legal Practitioners' Act (1969) 71 SR 448 at 454; Kotowicz v Law Society of New South Wales (No 2) (Court of Appeal - 7 August 1987, unreported) per Kirby P at 19 and 20 and per Samuels JA at 3; Ex parte Lenehan (1949) 77 CLR 403 at 422. In reaching its decision the Court should act with the greatest caution and only on solid and substantial grounds, and must depend upon its own assessment of the applicant's character, uprightness, honour and trustworthiness: Incorporated Law Institute of New South Wales v Meagher (1909) 9 CLR 655 at 664 and 692; Lenehan at 422. It is, of course, equally well established that in discharging its responsibility to supervise the discipline of solicitors, the Court is not exercising a punitive but a protective role, having primary regard to the protection of the public interest and of the interests of the profession: Clyne V New South Wales Bar Association (1960) 104 CLR 186 at 201-2 and New South Wales Bar Association v Evatt (1968) 117 CLR 177 at 183. Applications for restoration to the roll present particular problems or raise in sharper focus some of the inherent problems which attend any exercise of this protective jurisdiction. First of all, the applicant must start by facing and accepting the prior decision of the Court (or of the Statutory Committee) that he was guilty of professional misconduct of so serious a kind that it required the making of the most stringent order which the Court could invoke, that of removal from the roll. Hence, as I have indicated, the applicant must commence his application on the footing that he has been found unfit to practise and indefinitely so, since there can be no necessary boundaries to the duration of defects of character and want of professional responsibility and integrity so grave as to attract such an order. Therefore, the applicant faces the difficult task of persuading the Court that in the time which has elapsed between removal and the application for restoration to the roll he has Undergone a change of character, 2 UNREPORTED JUDGMENTS attitude and understanding of proper professional standards such that he is now fit to resume his place in the profession. Such a metamorphosis is difficult to establish. Secondly, in mustering the means to prove this change, the applicant encounters logical difficulties of no small dimensions. This problem is well illustrated in the present case. The solicitor was struck off by order of the Court of Appeal in 1981, having earlier been reprimanded and suspended for six months by the Statutory Committee. The order made by the Court was in response to an appeal by the Law Society. It will be necessary presently to refer in a little more detail to the findings of the Court of Appeal on that occasion, which were accepted by both sides as the foundation upon which the present application must stand. However, it will be sufficient at this stage to note that the Court expressed its final view in these terms: "The conclusion we reach is that the solicitor was guilty of professional misconduct of a most serious kind and that the evidence amply demonstrates that he is unfitted to be a solicitor." Now, as I have said, such a finding entails that a solicitor, seeking to be restored to the roll, must demonstrate that he has overcome his unfitness and has regained the character he must possess in order to enable him to practise once again. It is both the acceptance of the initial finding and its consequences and the proof of the change which present the problem. In the present case, as in most cases, the solicitor has filed a great many affidavits, more than fifty, which depose in the most favourable terms to his character, conduct, integrity and competence. All the deponents were provided with a summary of the findings of the Court, intended to equip them with the basic knowledge of the circumstances which led to his removal from the roll. It was inadequate for this purpose, as I will indicate. But, in any event, in this case, as in most cases, this information has been treated merely as a more or less meaningless incantation designed only to deflect the attack which would obviously be launched upon deponents whose evidence was given in total ignorance of what had led to and been involved in the solicitor's removal from the roll. I think that I can safely say that all the deponents who knew the solicitor before 1981 assert that he appeared to them to be a man of integrity and good repute. Let me offer some examples selected at random from this material. Mr RL Williams, a businessman, says that he has known the applicant for fifteen years (all the affidavits were sworn late in 1987 or early in 1988) and that "over the several years I have known Noel Dennis I have found him to be of impeccable character and responsible and caring in the manner in which he handled my affairs when he was my solicitor. In my mind, it is unquestionable that Noel Dennis is a fit and proper person to be a solicitor." Mr RT de Lauret Arnold, a chartered accountant, has known the applicant since 1972 and has had a great deal of professional contact with him over the years. He says: "I believe Noel Norman Dennis has always endeavoured to act properly, ethically and honestly in his business dealings and has suffered greatly from placing his trust in people who have let him down." Mr DB Sando, a senior administration manager of the Australian subsidiary of Japan's second largest trading company, has known the applicant since 1965. He says that during the years that have elapsed since then he has "continuously entrusted him with many legal, property and advice matters relating to some seven or eight proprietary companies of which I had control at the time right up until, to my great surprise, his being disallowed to practise as a solicitor" and he adds, "I have always had a great admiration for the character UWRJHE MATTER of the application of NOEL NORMAN DENNIS to be restored to the ROLB OF SOLICITORS and IN THE MATTER of the LEGAL PRACTITIONERS' ACT (Samuels JA) of the applicant....... " Mr Herbert Field, a licensed financier, has known the applicant for about fifteen years, both professionally and socially. He says, "From our association I have formed the opinion that the applicant is a man of high principle on whom I can rely knowing him to be a man of integrity. I have found him to be very trustworthy and honest." Mr RP Carew, a consultant, has known the applicant since 1978 professionally and as a business associate. In his dealings with the applicant he has found him "financially honest and trustworthy"; and Mr Carew does not believe that the applicant "would knowingly cause an event to happen that would hurt a person". Mr ECC Lewis, a member of the bar, had known the applicant for a great many years and was junior counsel in the proceedings before the Statutory Committee and the Court of Appeal. He says, "It appeared to me that much of the applicant's problems arose from overworking, resulting in his failure to adequately supervise his employees and also not giving complex matters the necessary detailed consideration, a situation of which he is now aware and I believe will not repeat if readmitted". Finally, Mr WJ Jordan, a real estate agent, has known the applicant for about fifteen years and has conducted a number of business projects with him. He says, amongst other things, "the applicant is clearly an honest man as well as a clever one and I believe will, if readmitted to practice, excel himself in a way far more than he ever did when he was previously practising law." These, as I have said, are only samples. I have no reason to doubt that these deponents and the many others whose affidavits I have read but whom I have not mentioned have provided their honest opinion of the applicant's character. But such a person as emerges from the pages of these affidavits would have been absolutely incapable of the acts of misconduct, dishonesty and want of candour which the Court found established. Either one must discount this material as over enthusiastic though honest, or conclude that evidence of this kind is not likely to be a very helpful indication of the subject's strength of character, dedication to professional standards or likely response to emotional and financial pressure. Furthermore, since the deponents had nothing but the highest opinion of the applicant throughout an acquaintance which in many cases commenced well before the events which led to his striking off, it is difficult, from the material supplied, to perceive the radical transformation which lies at the very heart of this application. This evidence says no more than that in the opinion of the deponents the applicant has always been a good man and a competent solicitor. On the other hand the findings of the Court which, for the purposes of this application must be taken as correct and immutable, indicate that he was not always a good man and, indeed, acted dishonestly in more than one particular. Thirdly, in this case, the applicant himself has had the greatest difficulty in coming to terms with the findings against him and his inability to do so has, in my opinion, proved fatal to the success of this application, as I will endeavour to explain. The solicitor is now about sixty years of age and was admitted to practice in 1950. In 1960 he became a sole practitioner and continued to run a substantial practice until the proceedings before the Statutory Committee concluded. A considerable part of his practice concerned real estate, mortgage finance and investment, including conveyancing of different descriptions. He himself was personally engaged in real estate development through a number of companies which he controlled, and fell into financial difficulties in about the middle of 1975 when the real estate market deflated and a number of personal guarantees which he had given for various loans to these companies were called. His financial 4 UNREPORTED JUDGMENTS position deteriorated during 1977 and on 30 January 1978 he called a meeting of his creditors. Before he did so, he invited the Law Society to investigate his trust account to enable him to assure his creditors that there was no deficiency of trust funds. The investigation was carried out and the only breaches found were minor failures to observe some of the trust account requirements of the Legal Practitioners Act. I should emphasis at the outset that none of the transactions found to constitute professional misconduct caused any financial loss to any of his clients or to any other persons. However, the Law Society's investigation revealed other matters which led to complaint and finally the adverse findings of the Statutory Committee and of the Court. As a result of the financial difficulties to which I have referred, the applicant became bankrupt on 26 July 1978. On 19 October 1978 the Law Society cancelled his practising certificate and on 27 June 1979 referred a number of questions to the Statutory Committee. There followed proceedings taken by the solicitor complaining about the circumstances in which his practising certificate was cancelled which went as far as an appeal to this Court and which, in the Court's opinion, had no merit but were merely designed as a delaying tactic. Finally, the matters were dealt with by the Statutory Committee which, on 19 February, imposed orders of reprimand and suspension for six months as I have related. The Law Society appealed against these orders on the ground that the conduct was such as to require removal from the roll and the applicant cross appealed, challenging the finding of professional misconduct. On 1 July 1981 the cross appeal was dismissed. The appeal was allowed and the applicant's name was Struck off the roll of solicitors. On 22 May 1984 he was discharged from bankruptcy. This application was commenced by notice of motion filed on 1 July 1987 and came before the Court on 5 September 1988. I think it will be sufficient to indicate only in outline the nature of the three matters which form the basis of the adverse findings which led to the order for removal. The first, which I will call the Collins matter, involved the use by the solicitor (but not in any way the dissipation) of trust moneys without proper authority and, as the Court found, "in blatant disregard of the interests of [beneficiaries] and his duties as trustee." In order to convey the nature of the Court's findings I must quote a number of other descriptions of the solicitor's conduct: "Despite his not very honest quibbling as to whether he thought his duty was to the children or to the husband, what he did was in fact in blatant disregard of his duty to the infant beneficiaries." " There was a serious breach of trust which carried with it a high degree of moral blameworthiness. " The solicitor's claim was that what he did was temporary, that the husband was anxious to obtain the higher rate of interest which would be payable on a mortgage loan, and that because none was immediately available, he obliged the parties by lending the money to his family company. of this explanation, the Court of Appeal said: "What happened was far from temporary and was far from what it was claimed to be, namely something done to oblige others." "There were however some events which preceded these repayments which give the lie to many of the solicitor's attempts to exculpate himself morally from what happened and to do display himself as some kind of benefactor borrowing the money because other borrowers of so small a sum could not be found." URJHE MATTER of the application of NOEL NORMAN DENNIS to be restored to the ROLE OF SOLICITORS and IN THE MATTER of the LEGAL PRACTITIONERS' ACT (Samuels JA) "The claim he made in his evidence that what he did was just to help others and was a temporary measure was dishonest and misleading." And, finally: "As earlier stated having been made a trustee because he was a solicitor in the expectation that he would perform his trusteeship with skill, care and independence and integrity he failed deplorably to display any of these attributes. It is clear, by reason of his own need for money in the position he found himself, that by a sustained course of conduct, the solicitor took and used for his own purpose trust money which he solemnly led the Court to believe he would diligently and independently apply for the benefit of children. It is inescapable that what he did was deliberate, preferring his own interests to the performance of his duty as a solicitor and trustee. His conduct, particularly because of its sustained nature, and the lack of frankness that accompanied it and, to put it mildly, his unfrank evidence at the hearing is incompatible with his being a member of the legal profession." In what have been called the Toga matters, the vendor of home units promised purchasers a discount from the contract price. The solicitor obtained finance for clients who were purchasers, the building society with which he was negotiating having stipulated that the purchase price must not be less than the contract price which the solicitor had revealed to them. He did not inform them that, as he well knew, the purchasers would be required to pay only the discounted price and not the actual figure shown in the contract. Of this the Court said: "The conclusion is inescapable that the solicitor was party to a dishonest scheme which was executed by his clerk. It involved the deception of the lender as to the price being paid for the units. Its twofold purpose was to enable the vendor to dispose of units in relief of its financial stringency and to allow purchasers to acquire the units without having to subscribe an amount by way of equity which may have been beyond their means. Participation in a scheme of this character is inconsistent with the integrity demanded of a practising solicitor." Thirdly, in the Kitson matter, although the details of the transaction were never fully revealed, the Court was "left with a picture that specious and questionable devices had been used and unsound advice given to enable the solicitor to obtain access to moneys that were on any view not properly his." And, finally, the Court said: "The conclusion we reach is that the solicitor was guilty of professional misconduct of a most serious kind and that the evidence amply demonstrates that he is unfitted to be a solicitor. " In my opinion this application for restoration to the roll must fail because the solicitor has never accepted the validity of the findings made against him and because the evidence (and particularly the solicitor's own evidence) fails to discharge the burden of proving the necessary change in his moral character and professional attitude. In evidence the solicitor asserted that he unreservedly accepted the findings of the Court (and by this I mean, of course, the findings made in 1981) although he was unable to reconcile himself to them for some time after his removal. He had an aversion to reading the judgment of the Court of Appeal which he had not been able to overcome until about the time he made his application, the subject of the present proceeding, which was filed on 1 July 1987. This inability to bring himself to scrutinise the description of his professional disgrace and social humiliation is entirely understandable. But the resolve to study the findings and 6 UNREPORTED JUDGMENTS profit from the Court's conclusions is a necessary ingredient of the matters upon proof of which the present application depends. In the course of cross-examination the solicitor admitted that the metamorphosis, a word he himself used to describe his ultimate acceptance of his misconduct and his unrestrained acknowledgment of the professional errors into which he had fallen, had taken place probably only in "the last four or five months", that is to say, round about the middle of this year. This late recognition of the grounds of his removal from the company of his professional peers explains how it was that in 1985 he came to prepare a document which, during that year and the following year, he disseminated (although only very few copies of it) to various business and professional people with whom he was engaged in commercial transactions. The purpose was to explain the circumstances in which he had been struck off. Although he conceded that this document "is so full of self justification that I would say it was not accurate" - as, indeed, it was not - it represented his view of the circumstances surrounding his removal until about the middle of 1987; that is to say until shortly before the time this application was made. It is unnecessary to go into detail about the document. It is sufficient to say that in my view it is indeed designed as an essay in self-justification and, inevitably, in order to achieve that purpose, contains passages which are misleading and in some particulars false. Acknowledgment of error does not itself displace the unfitness which error manifests. But it is an indispensable starting point. Hence it follows that the period during which the solicitor's moral regeneration may have occurred is not to be taken as running from July 1981 until the application came before the Court seven years later. The period really is the very much shorter one commencing at a date about the time of the application when the solicitor finally came to terms with the circumstances of his professional fall and ending with the hearing of the application. That is the view most favourable to him because, as I have already said, his ultimate evidence upon this point, I think, was that he had come to a final acceptance of the circumstances only four or five months before the matter came before the Court in September of this year. In addition to the document to which I have already referred it will be recalled that each of the deponents was supplied with a summary which was annexed to each affidavit and to which they each referred. This, which was referred to as annexure 'A', was prepared in August or September 1987 by the solicitor himself. A copy of it was sent to the Law Society, in effect for their approval; in terms asking whether they thought it was adequate. The Law Society declined to commit itself to any view of the sufficiency of the document. I thought at first that this response was perhaps a little uncharitable but, on reflection, it is difficult to see how the Law Society, which objected firmly to the application, could have committed itself to some extra-curial opinion about the adequacy of evidence which the solicitor proposed to use in support of his application. It is fair to observe, as counsel for the Law Society did, that a negative answer, one asserting that is that the terms of the document were not adequate, might well have led to a request for particulars of the rejection and thus to an exchange of correspondence which, conducted at that stage, might have embarrassed both parties. However, it is entirely open to the solicitor to use the letter to show that at least he was prepared to expose his judgment to the criticism of the Law Society since I would not be prepared to conclude that he had any more subtle purpose in view. UWRIJHE MATTER of the application of NOEL NORMAN DENNIS to be restored to the ROLZ OF SOLICITORS and IN THE MATTER of the LEGAL PRACTITIONERS' ACT (Samuels JA) In the event that judgment is shown to be faulty. The document contains statements which are false and misleading. It distorts the role of the solicitor in one of the transactions to which it refers, is "quite insufficient', as the solicitor agreed and, in one respect at least, contains an inadequate description of the facts. I, for my own part, recognise the difficulty of attempting to make an accurate summary for the purpose in contemplation. But I conclude that the summary produced was inaccurate and misleading, not only because of the technical difficulties of ensuring that it was otherwise, but because the solicitor still was unable resolutely to face the Court of Appeal's description of what he had done and failed to do. I see no point in dealing at great length with the other aspects of the solicitor's evidence and his cross-examination. But there is one further aspect at least with which I must deal. He agreed in his evidence before the Court that he understood, or at least had understood in August 1988 when he swore the second of two affidavits, that the findings of the Court of Appeal meant that he had been deliberately dishonest in the particular respects to which the description of dishonesty had been applied. In that affidavit, however, he said: "Again without in any way mitigating the gravity of the aforesaid finding I did not intentionally seek to deceive or mislead the Court but I realise that I gave inadequate thought to the nature and reasons of my conduct and my subjective justification." He was asked how that attempt at exculpation squared with the finding which, as he conceded, attributed deliberate dishonesty to him. He was asked also how he could make consistent the finding that he had engaged in "not very honest quibbling" with his comment about this finding that he was not however "in any way consciously attempting to be other than honest and frank" in his answers. In my view his explanation of these inconsistencies, as they appear to me to be, was not satisfactory. I would not wish to place too much emphasis upon fine distinctions which seek to establish a boundary between moral obtuseness on the one hand and deliberate deceit on the other. But there must be a point at which a person of ordinary perception and intelligence must recognise that attempts at self justification cannot prevail over objective facts. The boundaries of self-deception are not limitless; not at least in the area which is the subject of the present examination. In my opinion, even in August 1988, the solicitor had failed really to understand and to arrive at any personal conviction about the nature of his faults and the want of character, judgment and, indeed, of plain honesty which had led to his removal from the roll seven years before. Indeed, as I have said, he admits that the revelation came to him only about the middle of this year; I think that illumination was even more delayed than that. The second ground of the application's failure is of course closely connected with the first with which I have just dealt. I see no basis for a conclusion, bearing in mind the weight of the onus and the nature of the matter to be proved, that the solicitor has undergone the radical change which he must establish. I give all reasonable weight to the honesty of his deponents. But even without analysis of matters about which he was cross-examined in connection with his recent commercial dealings, I find that the material to which I have referred is itself conclusive upon the point. I cannot accept that his gradual appreciation of the defects which had caused him to be struck off was coextensive with his moral regeneration. I am not persuaded that the evidence before the Court establishes 8 UNREPORTED JUDGMENTS that at some stage before the application came on to be heard, perhaps about July 1987 or perhaps in the middle of 1988, he had regained the character necessary for readmission. It does not seem to me relevant to consider domestic and other pressures which existed ten years ago and which were advanced before the Statutory Committee and originally before the Court of Appeal in explanation of the breaches of professional duty then alleged against him. Mr McAlary QC, to whose argument on behalf of the solicitor we are much indebted, submitted that every person has a breaking point at which he will succumb to pressure and cast aside the precepts of his moral code in favour of personal advantage or protection. I do not myself accept that this is so; but I am relieved from a final decision upon this somewhat metaphysical point because the Court in this application starts with the acceptance of the orders made by the Court of Appeal in 1981 which are not now open to question. For these reasons I do not consider that the solicitor has established that he is fit to be readmitted to the roll. The Motion is dismissed and he must pay the Law Society's costs of this application. Mahoney JA On 1 July 1981 Noel Norman Dennis was struck from the Roll of Solicitors. He has applied to this Court for an order that he be restored to the Roll. The question to be determined is whether, in the sense to which I shall refer, he has established that he is now a fit and proper person to practice as a solicitor. The application has proceeded on the basis that there is no contest as to the principles to be applied. Mr McAlary QC, for Mr Dennis, invited the Court, in my opinion correctly, to deal with the matter on the basis of the principles referred to in the decisions of this Court in Kotowicz v Law Society of New South Wales (7 August 1987, unreported) and Nash v Law Society of New South Wales (30 August 1988, unreported). In those decisions this Court referred to what has been said by the High Court of Australia in cases such as Incorporated Law Institute of New South Wales v Meagher 9 CLR 655 and Ex parte Lenehan 77 CLR 403. In the Kotowicz case, Samuels JA said that "an applicant for readmission must show that he is again a fit and proper person and must demonstrate that proposition upon solid and substantial grounds". I expressed a similar view. In a case such as the present, the question, is in the end, whether the applicant is, when the court comes to consider the matter, a fit and proper person. What led to his being struck off the Roll will, in a practical sense, be relevant in determining this question because it will be taken into account by the court in determining whether it is satisfied that he is no longer what he was. The facts have been detailed in the judgment of Samuels JA and I shall not repeat them. It is clear that, in 1981, Mr Dennis was not a fit and proper person to be a solicitor. That is not in contest. The reason why he was such involved two things: what he had done in respect of his clients; and what he did when the matter was before the Statutory Committee and the Court of Appeal. What he did and said at that time involved essentially three matters: these, to adapt the language of the court in 1981, I shall describe as: the Collins matter, the Toga matter and the Kitson matter. It is accepted, and the application has proceeded upon the basis, that the facts and the categorisation of them as set forth in the court's judgment are to be accepted as correct and as the basis for this application. The court has therefore not been called Upon to consider in detail, beyond the terms of the court's judgment, what was then done. UWRJHE MATTER of the application of NOEL NORMAN DENNIS to be restored to the ROL@ OF SOLICITORS and IN THE MATTER of the LEGAL PRACTITIONERS' ACT (Mahoney JA) The Collins matter: In this matter, Mr Dennis used money which he held on trust for his own purposes; he did it deliberately and because he was in financial difficulties; and when he was faced with what he had done, he gave and gave to the court, an account that was categorised as "dishonest and misleading". He told the Statutory Committee and, through his counsel, he told the court that he had used the money as he had in order to help the parties involved and that he did it only for a temporary period. The court held that he did not do what he did to help others but to help himself in his financial difficulties and that what was done was not done as a temporary expedient. In respect of it the court then said: "The claim he made in his evidence that what he did was just to help others and was a temporary measure was dishonest and misleading. The objective material leaves no doubt that lending the money to himself was not of a temporary nature. The conclusion of the Committee that the evidence adduced indicated it was used for temporary purposes is wrong. The submission, made to us on his behalf of unwitting errors of judgment on the part of a man worried by his financial difficulties and the complication of running a busy one man practice cannot be sustained. The view of the committee that there was 'some doubt that the principal money was properly secured on first mortgage' was quite wrong. There was and never was any security (sic) much less a first mortgage. At a time when the solicitor was verging on financial collapse he drew a cheque from the trust moneys payable to himself. Whether he was liable or his family company was liable there was no security. The view of the Committee that there was a temporary breach in respect of which there was no evidence of loss by the infant beneficiaries, particularly when taken with the ultimate penalty imposed, indicates that they misconceived the gravity of what occurred. The fact that no loss ultimately occurred, although not irrelevant, cannot be determinative of the quality of the conduct. Even if when he took and used the money for his own purposes, he intended to have a mortgage executed and to have the loan for only a short time, what he did had the characteristics earlier stated. As earlier stated having been made a trustee because he was a solicitor in the expectation that he would perform his trusteeship with skill, care and independence and integrity he failed deplorably to display any of these attributes. It is clear, by reason of his own need for money in the position he found himself, that by a sustained course of conduct, the solicitor took and used for his own purpose trust money which he solemnly led the Court to believe he would diligently and independently apply for the benefit of children. It is inescapable that what he did was deliberate, preferring his own interests to the performance of his duty as a solicitor and trustee. His conduct, particularly because of its sustained nature, and the lack of frankness that accompanied it and, to put it mildly, his unfrank evidence at the hearing is incompatible with his being a member of the legal profession. What we have set out is the view we take of the solicitor's conduct in these transactions, once they are examined in depth. Alone they demonstrate his unfitness to be a member of the profession. It would be surprising if they stood alone. They do not. " The Toga matter: The relevant company was in financial difficulties and wanted to sell home units it owned. It would, presumably, help it to do so if building society finance was available to the purchasers. To get this finance the following took place. (I 10 UNREPORTED JUDGMENTS take the facts from what the court said and, as I understand them to be, the inferences to be drawn from what was said). It was made clear by the building society that a loan would be available only if the price of the units was not less than $26,950. A contract of sale was drawn. The price to be inserted in the contract was fixed at one figure but, outside the contract and by letter, the purchasers were offered a "discount of $2,000 off the purchase price provided settlement takes place within three months of the date hereof'. When the solicitors of the building society requisitioned to the effect that the loan was available only as I have indicated, the answer given by Mr Dennis was to send as a "certified copy of the contract of sale" the form of contract which, of course, made no reference to the discount. This happened on some seven or eight occasions. In respect of these matters, the Statutory Committee said that "the solicitor took part in what counsel for the society described as 'sham transactions' to organise building society finance although it seems probable that the solicitor was not the originator of the arrangement". On appeal to the Court of Appeal, the court said: Before this Court it was submitted that the transactions were not shams but genuine discounts for early settlement, that the building society was not deceived since it relied upon its own valuation and that the solicitor was not personally handling the matters and did not know that his clerk was concealing the true purchase price from the building society. All these excuses were rejected by the Statutory Committee and none of them should be accepted here. The conclusion is inescapable that the solicitor was party to a dishonest scheme which was executed by his clerk. It involved the deception of the lender as to the price being paid for the units. Its twofold purpose was to enable the vendor to dispose of units in relief of its financial stringency and to allow purchasers to acquire the units without having to subscribe an amount by way of equity which may have been beyond their means. Participation in a scheme of this character is inconsistent with the integrity demanded of a practising solicitor. Given the facts, which are now accepted, the judgment of the court that the participation in these transactions was inconsistent with the integrity demanded of a practising solicitor was clearly right. To attempt to defend the transactions (as was done in 1981) goes to Mr Dennis's understanding of what is required of a person who wishes to practice as a solicitor. He now concedes that what was done cannot be defended. The Kitson matter: A company, GM Industries Pty Ltd, had, on 28 June 1977, been put into liquidation. In or about the month of July 1977, a Mr Grace, a director of the company, brought to Mr Dennis a cheque in favour of the company for $15,018. The court found that "clearly intent on devising a means whereby he could recompense himself in respect of moneys lent by him to Kitson Miller Holdings Pty Ltd" he procured Mr Grace to endorse the cheque so that it could be cashed and paid into an account in his trust account in the name of the company. It was paid from that account and ultimately he procured the benefit of it for his own interests. In respect of this the court said: When Mr Grace brought the cheque in, by the account the solicitor gave he had no thought of passing it to the liquidator or informing him of its existence. Instead, he had some informal discussions with a member of the Bar with whom he was friendly, to which reference will later be made, procured the endorsement of Mr Grace and paid it into his trust account. This deposit forms an initial entry in a folio of the trust account UWRIJHE MATTER of the application of NOEL NORMAN DENNIS to be restored to the ROM OF SOLICITORS and IN THE MATTER of the LEGAL PRACTITIONERS' ACT (Mahoney JA) ledger showing the client as GM Industries Pty Ltd, which of course was not his client at that time. Despite the solicitor's attempt to attribute this entry to inefficient staff, it is impossible to conclude that it was not done with his knowledge and concurrence at least. It is equally impossible to conclude that an experienced solicitor would not appreciate that the only proper destination of the cheque and its proceeds in the first instance was the liquidator's trust account. The court then continued: The solicitor, however, was clearly intent on devising a means whereby he could recoup himself in respect of moneys lent by him to Kitson Miller Holdings Pty Ltd by the strategy of making a series of wholly untenable assumptions by the offering of incorrect advice to Dr Kitson, if advice he did give, and seeking to protect himself by the advice of counsel based on inaccurate and incomplete facts. That he suppressed from counsel the essential nature of the transaction he was embarking upon appears from a letter written by the counsel in question and from evidence given before this court. The court concluded: Consideration of the solicitor's statutory declaration of 10 September 1980 demonstrates an obvious lack of frankness on his part. He declares 'that there was a Traders Bill of Sale dated 24 December 1976 in favour of a Dr L Kitson'. Of course there was not. In an attempt to give colour to that statement he forwarded with the declaration, without annexing it, the unexecuted draft purporting to be dated 3 May 1977, transferring the bill of sale to Dr Kitson but made no reference to it as an annexure or otherwise in that declaration. He certainly did not declare that it was entered into. The full truth as to these transactions has obviously not been told and the solicitor was in a position to do so. So the court is left with a picture that specious reasons and questionable devices have been used and unsound advice given to enable the solicitor to obtain access to moneys that were on any view not properly his. In the light of this, what conclusion should be drawn from the evidence presented to establish his present fitness to be a solicitor? The evidence consists of a number of affidavits from persons speaking as to his present fitness and integrity and the evidence, both affidavit and oral, presented by Mr Dennis himself. The affidavits as to his integrity are not without weight. Subject to the matter to which I shall refer, what the court on such an application as this is primarily concerned with is the character and disposition of the applicant rather than his reputation in the community: see Re S (1985) VR 343. But the fact that the persons who have made affidavits in the present matter have observed nothing untoward in relation to Mr Dennis and have been convinced as to his present character must be given appropriate weight. Mr Stitt QC, for the Law society, pointed properly to the fact that, as the authorities show, the weight of evidence of this kind is affected by the extent of the knowledge of the deponents of what the applicant has done and in particular their knowledge of the circumstances surrounding his removal from the Roll. Mr Stitt submitted that, in substance, the knowledge of the deponents in respect of this last matter has been derived from the statement of it set forth in the annexure to the various affidavits and that that statement is both deficient and misleading. He submitted that this should lead to the conclusion that the evidence of such persons is of little or of reduced weight and that an inference to the discredit of the applicant is to be drawn from the fact that a statement in such form was given to the deponents for the instant purpose. 12 UNREPORTED JUDGMENTS Reference was made in argument to the difficulty which the applicant faces in this regard. As Mr McAlary QC said, if the applicant gives to each prospective deponent a copy of the judgment in extenso, it may be said that the deponent either will not read or will not understand it; if they are given a summary of it, it will be said that the summary is inadequate or misleading. Experience shows that there is some force in this criticism. But, bearing this criticism in mind, I think that, for a number of reasons, the summary of what the court said given to the deponents would not convey to them the full gravamen of the court's conclusions. Mr Stitt submitted, I put the matter in general terms, that in 1981 the court found not merely that Mr Dennis' conduct was reprehensible but also that, in respect of each of the three matters, he told lies to the court. Mr McAlary submitted that the solicitor's explanation to the court, though wrong and misleading, was not properly categorised as "lies" but represented an attempt by the solicitor at self-justification based upon a refusal by him to accept the charges against him. Reading the judgment of the court, I think that the court was of a view closer to that submitted by Mr Stitt than that submitted by Mr McAlary. Without substituting for what the court said a different formula of words, I do not think that the summary given to the deponents in this application accurately or fairly summarised what the court had said or brought to the attention of the deponents the gravamen of Mr Dennis' conduct during the 1981 hearing. It is not necessary for this purpose to conclude that the summary was deliberately prepared in a manner such as to mislead the deponents: on that I express no final opinion. But the fact that, knowing the significance of it, Mr Dennis prepared the summary in the form that he did must, in my opinion, go to his judgment in these matters and to whether he has exhibited the frankness which is expected of a solicitor in such circumstances. It was submitted by Mr McAlary that the solicitor should not bear, or bear in full, the responsibility for the document because it had been submitted to his legal advisors. The evidence as to this is, I think, not fully convincing. I do not think that such criticism as is to be made of the document and of the effect of it is fully met by the suggestion that has been made for it. Mr McAlary relied strongly on the evidence of Mr Dennis in the witness box. He submitted, I do not purport to set out all of the ways in which the matter was put, that Mr Dennis had done what he had done in the three matters referred to because he had been involved in commercial transactions the exigencies of which had led him to give effect to his own interests in preference to those of his clients; that he would not in the future be involved in such transactions; and that therefore he would not be tempted, or under pressure, to act in the way that he had. Mr Dennis gave evidence to this effect. Mr McAlary submitted that the court should accept him as a witness of truth, that it should therefore be satisfied that in the future he would act as a solicitor should, and that therefore he should be readmitted. Mr Stitt submitted that the court should not accept the solicitor's evidence in this regard and referred, amongst other things, to the document which is Exhibit 1 in the proceedings. This is a document prepared by Mr Dennis and handed to a stockbroker with whom he had had business dealings some years ago. He submitted that this showed that the solicitor had not shown to the persons dealing with him or to the court the degree of frankness, or displayed the integrity, which should be expected of a man in his position. UWRJHE MATTER of the application of NOEL NORMAN DENNIS to be restored to the ROLB OF SOLICITORS and IN THE MATTER of the LEGAL PRACTITIONERS' ACT (Mahoney JA) As is agreed, the success of this application depends upon whether the court, with the appropriate degree of assurance, is satisfied that Mr Dennis is a fit and proper person to be permitted to practice as a solicitor. That involves at least the elements of judgment, integrity, and the like to which reference has been made in the cases cited by counsel in argument. My conclusion is that I am not so satisfied and I decide the matter on that basis. It is proper to record that I do not decide the matter upon the basis that Mr Dennis is bad or that, for example, he desires to return to practice in order to do what previously he did. I am of the contrary opinion. My conclusion is based upon the fact that, taking into account what led to his being removed from the roll, what he has done since, what he has said in support of this application and the testing of it, I do not have the appropriate satisfaction that he should now be permitted to practice as a solicitor and that he is a person who should be permitted so to do, even upon a limited basis. Ihave come to this conclusion with regret. I am satisfied that Mr Dennis does, as he said, genuinely desire to return to the practice of the law. I accept that he regrets what has happened and that he is prepared to give undertakings which, as he sees the matter, would make it less likely that he would make the same mistakes again. But I am not satisfied that, considering all of the circumstances, it should be accepted that he presently is appropriate to be admitted. I have referred to the nature of the questions which the court must consider. I would add one thing to what I have said. I am, as I have said, not satisfied that Mr Dennis is presently an appropriate person to be admitted to practice. That, on the principle on which this application has proceeded, is sufficient. But there is one further matter to which reference may be made. It is, I think, proper to have regard, in cases of this kind, to whether the public would accept that he is such a person. There is, in concept, a distinction between a person who, though of the appropriate character, would not be seen by the public to be such: it is possible that the public and the members of the profession would not accept him as of appropriate standing to be a solicitor and would be, in a sense, affronted by his being such. This aspect of the matter has not been pursued in the present case and I express no final conclusion upon it. But, having regard to what he did and the conclusions of the court as to what he said in his defence on the last occasion, I entertain significant doubts as to whether he would be accepted, by the public or the profession, in this regard. However, whether or not this be within the kind of question to be posed, as indicated by the decisions to which I have referred, it is not a matter which was pursued in detail and I do not base my decision upon it. I agree that the application should be dismissed with costs. Counsel for the Appellant: F McAlary QC and AW Street Solicitors for the Appellant: Brown and Partners Counsel for the Respondent: R Stitt QC and PR Garling Solicitors for the Respondent: Rosemary MacDougal