GOLDBERG v LAW SOCIETY OF NEW SOUTH WALES SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL Hope, SAMUELS and MAHONEY JJA 31 October, 1 and 2 November 1988, 20 December 1988 [1988] NSWCA 52 Solicitors — Appeal from decision of Statutory Committee striking name of solicitor from Roll — Professional misconduct by solicitor conceded but order sought that solicitor be limited to practising as an employee in the area of criminal law or that he be suspended — Charges of wilful misconduct in application of clients' money, wilful failure to comply with s41(1) and s42(2) of Legal Practitioners Act, gross neglect and delay in handling of clients' affairs, providing false and misleading information to Court, hindering, obstructing and delaying Law Society by failing to give explanations and to produce records, and practising without being the holder of a current practising certificate — no charge of dishonesty — decision in respect of some allegations and of order removing solicitor from Roll was decision of statutory majority, with minority making different findings on some matters and proposing suspension — Conclusions of statutory committee on charges affirmed — Considerations relevant to basis of disciplinary orders discussed — Decision of Committee to remove solicitor from Roll affirmed — appeal dismissed. ORDERS Appeal dismissed with costs. Hope JA Mr Charles Alroy Goldberg (the solicitor) was admitted to practise onl August 1969. On 13 November 1987, after a hearing lasting 19 days, the Solicitors Statutory Committee, by statutory majority, ordered that his name be removed from the roll of solicitors. The Committee hearing the matter comprised four persons, and they were evenly divided. The two who constituted the minority were of the opinion that professional misconduct had been established on the part of the solicitor and that an appropriate penalty "would be suspension for a period of six months together with an order for the payment of the Law Society's costs". Since the chairman was one of the two members of the Committee who considered that the solicitor's name should be removed from the roll, the views of him and of the member agreeing with him prevailed by reason of the provisions of s75(10) of the Legal Practitioners Act. The appeal is an unusual one in that it is not in issue that the solicitor was guilty of professional misconduct, although there is a contest as to whether some particular matters should be included in that conduct, and it is not in issue that it is appropriate that the committee should have made, and that this Court should make, some order limiting the activities of the solicitor. It is submitted that the principal part of the solicitor's practice was in the criminal field where he usually appeared as an advocate for his clients, and that if he were restricted to this field, the public would have both the advantage of his knowledge and skills and would be protected against his obvious deficiencies in handling other types of practice. The primary submission for the solicitor is that an order should be made which would preclude him from acting other than as an employed solicitor, limited to work in relation to criminal matters or otherwise in a way which does not involve him in dealing with conveyancing or other matters involving clients' money. In 2 UNREPORTED JUDGMENTS the alternative it is submitted that this Court should affirm the conclusion of the minority that he should be suspended for six months. The Law Society supports the conclusion reached by the majority. The matters specified in the terms of reference, and the answers given to the questions in those terms of reference by the majority were as follows: Question | "The solicitor wilfully caused or allowed money entrusted to him for or on behalf of clients to be applied in a manner which; (i) was without the authority or contrary to the instructions of those clients; or (ii) grossly preferred the interests of certain other clients to the detriment of those clients whose money was entrusted to him." Answer "(i) and (ii). Yes, in matters of Little and De Vulder." Question 2 "The solicitor wilfully failed to comply with the provisions of s41(1) of the Legal Practitioners Act." Answer "Yes, in that the Solicitor has failed to account to Mrs Little and to the beneficiaries in the De Vulder Estate. The Committee also answers this question "Yes' in relation to the matter of Spackman." Question 3 "The solicitor wilfully failed to comply with the provisions of s42(2) of the Legal Practitioners Act." Answer "Yes, in relation to Little, De Vulder and Spackman." Question 4 "The solicitor was guilty of gross neglect and delay in relation to his handling of his clients' affairs." Answer "Yes, in relation to the following matters: Mrs Little, Estate of Little, Wilson, Estate of Martin, Spackman, McLardy, Atkins, Estate of Symons, Forrester, Vukman, Legge, Brown, Bloyd, Estate of De Vulder, Ross and Estate of Eisler." Question 5 "The solicitor in breach of his duty as a solicitor of the Supreme Court of New South Wales provided false and misleading information to the Court." Answer Yes, in the Estate of Symons. Question 6 "The solicitor hindered, obstructed and delayed the Law Society of New South Wales by failing to give any or any satisfactory explanation touching matters relating to his conduct as a solicitor when called upon so to do by the Council of the Law Society of New South Wales." Answer "Yes, in relation to the complaints of Brunskill and Bloyd." Question 7 "The solicitor hindered, obstructed or delayed the Investigator in the performance of her duties or the exercise of her powers under section 82A of the Legal Practitioners Act by failing to produce ledger cards and instruction files which the said Investigator requested the solicitor to produce to her." Answer "Yes." Question 7A URJ GOLDBERG v LAW SOCIETY OF NEW SOUTH WALES (Hope JA) 3 "The Solicitor after 30th June 1986 and in breach of s40A of the Legal Practitioners Act 1898 acted as a solicitor whilst being an unqualified person in that he was not the holder or deemed holder of a current practising certificate." Answer "Yes." Question 7B "At any time after 30th June, 1986 the Solicitor, being an unqualified person within the meaning of s40 of the Legal Practitioners Act 1898, in that he was not the holder or deemed holder of a practising certificate then in force, wilfully pretended to be qualified to act as a solicitor." Answer "Yes." Question 7C "At any time after 30th June, 1986 and in breach of s67 of the Legal Practitioners Act 1898, the Solicitor acted or practised as a solicitor without his having then in force a practising certificate." Answer "Yes." Question 8 "Any or all of the solicitor's conduct above described constituted professional misconduct." Answer "Yes." Question 9 "For any reason on the facts before this Committee the solicitor has been guilty of professional misconduct." Answer "Yes." The minority gave answers to some only of the questions. In the first answer which it gave, which appears to be in response to Questions 1, 2 and 3, they expressed this view: "In the Little matters, due to the lapse of time since they commenced, the absence after such time of certain records, some concessions made by Mrs Little in cross-examination and to the clear information shown on the Little trust ledger that moneys had been paid out to the trust account and had not been received back into that account there was no failure to account to Mrs Little, except possibly as to the balance of $250.00." In the second answer, which appears to have been in relation to Questions | and 3, they expressed this view: "Tn the de Vulder Estate, portion of the mortgage advance to Ludwig was used at his direction to repay moneys owing by Ludwig to the Solicitor. In these circumstances there was no intermingling." In their third answer, which related to Question 5, they expressed this view: "In the Symons Estate the Affidavit was not misleading. It correctly set out some, if not all, of the facts occasioning the delay in applying for a grant and it contained no false statements." Their fourth answer, which related to Questions 2, 3 and 4, was; "Tn the Spackman matter the Solicitor's evidence that he had received verbal instructions to apply Mr Ryan's cheque towards outstanding costs should be accepted. Their fifth answer, which was related to Question 4, was: "Tn the majority of the matters where the Committee has found gross neglect and delay it should not be categorised as gross." Their sixth answer, which related to Question 7, was in these terms: "As to the allegations of obstructing the investigator, Miss Moreau's evidence as to delivering documents to Miss Sayer's office should be accepted. However despite the personal and professional problems that were then besetting him, the solicitor did not do all that might have been expected of him to assist the investigator." 4 UNREPORTED JUDGMENTS There is no allegation of dishonesty against the solicitor, although as will appear trust funds are missing or not accounted for. It is common ground that the solicitor, at the least, was slack in the keeping of financial records, that he was dilatory in his handling of many matters, that many of the financial records which he should have kept are not available, and that he was not as cooperative with the Law Society's investigator as he should have been. Considerable reliance has been placed by him on the delay or elapse of time that has been involved in many of the matters. To this he attributed his inability to recall and give evidence about a number of matters and also to the disappearance of his records, including both financial records and non-financial records. He also accounted for the absence of some of his records by the possibility that they may have been lost when he was locked out of the premises which he had occupied as tenant and had to move into other premises. The elapse of time is of course a matter that has to be taken into account as is the possibility that records were lost when he was locked out. However in my opinion the majority did take these factors properly into account as this Court must in dealing with the issues which are before it. A Herron v McGregor defence, raised before but not dealt with by the Committee, was abandoned during the hearing of the appeal. Submissions were made for the solicitor as to the burden of proof in relation to the allegations against him. It is clear that the standard is not that required in criminal proceedings, but it is equally clear that the observations of Dixon J in Briginshaw v Briginshaw (1938) 60 CLR 336 at 360-363 must be applied. At 361-362 Dixon J said: "Except upon criminal issues to be proved by the prosecution, it is enough that the affirmative of an allegation is made out to the reasonable satisfaction of the tribunal. But reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequence of the fact or facts to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal." The allegations against Mr Goldberg are serious and, although the consequences are not penal in nature, they are serious for him. This seriousness was required to be reflected in the evidence needed to produce the necessary satisfaction in the committee and in this Court that the allegations were established. The committee dealt with the allegations by reference to clients or groups of clients, and I think it is convenient to adopt that course here. I shall deal with them in the same order as they were dealt with by the committee. 1A. Estate of Little The husband of Mrs DJ Little died on 26 July 1972 and Mrs Little was appointed executrix of his will. She instructed the solicitor to act for her in respect of the estate, and probate was granted to her on 11 April 1973. The formal finding by the committee in relation to the solicitor's handling of the estate's affairs was that the solicitor was guilty of gross neglect and delay. The assets in the estate included shares in two mining companies which were still outstanding at the time of the proceedings before the committee. The solicitor's file in respect of the estate showed that the share certificates together with s122 certificates were still in it, and the solicitor admitted that he had taken no steps to send the share certificates to the relevant companies. In their statement URJ GOLDBERG v LAW SOCIETY OF NEW SOUTH WALES (Hope JA) 5 of findings the Committee points out that the shares in one company were registered on the Melbourne Registry and shares in the other company were registered on the Perth Registry, and the s122 certificates were obviously inappropriate to deal with them. The solicitor admitted that Mrs Little gave him the share certificates but claimed that she had not instructed him to transfer the shares. It was clear that the solicitor failed to realise the shares, and the majority so found. The estate also had some Tasmanian assets and it was left to Mrs Little personally to arrange for the reseal of probate in Tasmania to realise those assets. Counsel for the solicitor conceded that the solicitor should not have left it to Mrs Little to do this. A further allegation is that the solicitor failed to account to Mrs Little for the proceeds of a life policy with an insurance company in the sum of $780.10 and a joint account of the deceased with the Commonwealth Trading Bank and an account in the name of the deceased with a credit union. The solicitor claims that these assets were realised when he gave Mrs Little a cheque for $2,000 in August 1975. I shall deal more particularly with this cheque when dealing with Mrs Little's own affairs but shortly the solicitor referred to the butt for the cheque which listed: (1) Estate Little; (2) Little from Manning; (3) Little from Manning being account balance interest on mortgage. No separate sums were shown on the butt in respect of these items and Mrs Little's evidence is that she at no time received a statement from the solicitor as to how the sum was made up. She claimed that the cheque was in part repayment of money she had left with the solicitor for investment. As regards the particular assets of the estate to which I have referred, it was the evidence of Mrs Little that the joint account with the Commonwealth Trading Bank was still current until 1986 when her accountants wrote to the bank and arranged for the account to be closed and for the balance to be sent to Mrs Little. As regards the money with the credit union, the solicitor claims that he closed the account after the death of Mrs Little's husband and the proceeds formed part of the balance of the estate for which he had accounted to Mrs Little. In July 1987, during the course of the hearing before the committee, the solicitor prepared a statement of payments he had made in respect of estate moneys, but it does not seem to be in issue that, as the committee found, the solicitor never gave a full accounting of the estate to Mrs Little. The committee was also satisfied that the solicitor neglected and failed to realise all the assets in the estate as was clearly his obligation once he had accepted instructions from Mrs Little to administer the estate. In my opinion the conclusion of the majority that the solicitor was guilty of gross neglect and delay in respect of this matter was correct. 1B. Mrs Little On 17 November 1972 Mrs Little gave the solicitor a cheque for $11,000 which represented the proceeds of an insurance policy on her husband's life. The money was initially to be invested on mortgage with a mortgagor called Hartshorne. The ledger account in respect of Mrs Little records the receipt of this money and also the repayment of $11,183.33 to the solicitor on 19 January 1973. Mrs Little claims that she has not received any part of this money from the solicitor. 6 UNREPORTED JUDGMENTS In her evidence Mrs Little was asked whether she had had any discussion with the solicitor in 1972 about the investment of the $11,000 other than lending it to Hartshorne for a couple of months. Her answer was that she would have let the solicitor have the money on the understanding that it was to earn interest for her. In the course of his cross-examination of Mrs Little the solicitor, who was unrepresented, got Mrs Little to affirm on several occasions that the money was left with him to invest in a way that she would derive interest. After recording the repayment of the money lent to Hartshorne, the solicitor's ledger account for Mrs Little includes the following entries: Debit Jan 23 To A and D a/c settlement monies re mtge to Rosen 8,800.00 26 By Transfer from Rosen refund of advance re mortgage to Rosen 26 To H and D Babbington a/c settlement monies re 5,800.00 pchse MHL from Babbington Aug 15 To J Muir a/c mtge advance to Muir 5,300.00 Nov 16 By J Muir... repayment of mtge advance 1974 Jan 10 To WR Dumbier - repayment of mtge advance to — 2,100.00 Monk re mtge from Monk Mar 26 By CBA a/c settlement monies re sale to Bumpstead Mar 27 To client a/c net proceeds of sale to Bumpstead 23,652.52 To General a/c - a/c costs and disbs re sale 235.50 Apr 1 By Kenneth Hawes a/c Deposit re bale Bumpstead 2 By Australian Mutual Permanent Building Society Ltd repayment of investment with Building society 9 To client balance investment from AMP Building 4,378.04 Society 26 To United Perm Building Society Ltd - investment 2,300.00 for client Oct 16 To client a/c deposit re sale to Bumpstead 2,307.50 Nov 6 To J Manning a/c P/L advance 1,000.00 1975 Jul 28 By Nat Bank of Aust a/c settlement monies re mtge from Manning 28 By J Manning - a/c settlement monies re mtge Manning Aug 8 To client a/c settlement monies re mtge Manning 705.28 8 To client a/c bal interest re mtge Manning 26.09 Credit 8,800.00 5,300.00 23,888.02 2,307.50 4,378.04 705.28 44.72 Several things appear from this series of entries. The Hartshorne investment is properly recorded and shows repayment of the principal sum with interest. Moneys from the account were then lent to Rosen for a few days and repaid without interest. Moneys were then lent to Babbington and no further entry appears in respect of that investment by way of repayment, interest, or payment to Mrs Little. A loan of moneys from the account to Muir is recorded and repaid after some months without interest. A loan to Monk is recorded and there is no further record of what happened to this money or any interest on it. There is a full accounting for the proceeds of the sale to Bumpstead, although there is a delay URJ GOLDBERG v LAW SOCIETY OF NEW SOUTH WALES (Hope JA) 7 from 1 April 1974 to 16 October 1974 in accounting for the deposit. There is a recording of an investment for a few days with the Australian Mutual Permanent Building Society Ltd, both the investment and its repayment being recorded. There is the record of an investment with the United Permanent Building Society Ltd but no further entry in respect of those moneys, nor is there any entry of this investment in the journal. There is a record of a loan to Manning and of the repayment of part of the principal of the loan and some interest to Mrs Little. In her report on the solicitor's affairs Miss Sayer stated that a total of $10,450 appeared to be unaccounted for by the solicitor. This amount was made up by the Babbington mortgage of $5,800, the Monk mortgage of $2,100, the United Permanent Building Society Ltd deposit of $2,300 and a balance in the account of $250. Of the mortgagors I have referred to, Mrs Little said in evidence that she only knew of Hartshorne and Rosen. She had not heard of the others and it was never put to her that she had agreed to the solicitor lending her money with no interest chargeable. The solicitor was unable to say what had become of the missing investments. He said that lapse of time and the loss of records prevented him from being able to give any account. It is submitted for him that the explanation must be that the two mortgagees and the building society repaid Mrs Little directly. The solicitor cannot remember who Babbington and Monk were and Mrs Little denies that she knows or ever knew their names or who they were. Miss Sayer had inquiries made of the United Permanent Building Society Ltd and the response was that the Society had no record of the account. In a letter dated 16 May 1974 which Mrs Little wrote to the solicitor from Tasmania, where she had gone to live in March 1974, she acknowledged receiving a cheque, which it is agreed was the cheque for the proceeds of the sale of Bumpstead, and she enclosed a receipt as she had been requested to do by the solicitor. She apologised for taking so long to write to him, a delay from the end of March to mid-May. However she also said: "When in June will the $11,000 you have invested for me be available, I am considering a request to let it out on first mortgage at 10% for about 5 years, if it is available shortly." She also said that in this letter the solicitor had confirmed he had received the balance of the deposit from Kenneth Hawes, but that she had not yet received the solicitor's cheque. This latter amount, it will be remembered, the solicitor sent to Mrs Little on 16 October of that year. There appears to have been no reply to the letter. Mrs Little said in evidence that she went to Sydney in August 1975 and saw the solicitor by appointment and asked for some of her money. It was on this occasion that the solicitor wrote out and gave her the cheque for $2,000. It was Mrs Little's evidence that she asked for and believed she was receiving part of the $11,000 she had left with the solicitor for investment. Relying on a notation on the cheque butt, the solicitor claimed that the $2,000 represented payment of three items including the Little Estate. In evidence he also attributed specific sums to each of the three items there listed. Mrs Little said that subsequently she tried to speak with the solicitor on the telephone from time to time and while on some occasions she was able to speak to him, as time went on it became harder to do so and in the end he did not return her telephone calls. She also says that in May 1980 she went to Sydney for her mother's funeral and together with her father met the solicitor in his office and discussed both the Little estate and the $11,000. She said that there was a general 8 UNREPORTED JUDGMENTS discussion with the solicitor in which she asked when the matters would be completed and when she could obtain whatever documents were required in relation to her tax returns and also obtain the balance of the moneys due to her. The solicitor told her that everything was in order and it would not be very long. Mrs Little says that she came to Sydney again in September 1982, saw the solicitor late one afternoon and arranged with him that he would come and see her at her hotel on a Sunday morning. The solicitor did not keep the appointment and when she rang his home she was told that the solicitor was not in. The solicitor denied the visits by Mrs Little in 1980 and 1982 and receiving any telephone calls from her. According to him there was no communication from her after her visit in August 1975. The next time he heard anything about any of the matters was when he saw the letter from her accountants dated 21 March 1985. The letter was from Mrs Little's accountants AR Hewer and Co to the Secretary of the Law Society, and it referred to the complaints which Mrs Little made both about the solicitor's handling of the Little estate and of her own affairs. In respect of the $11,000 the letter says that Mrs Little received $2,000 of the amount from the solicitor in 1975 but had been unable to determine whether that sum represented interest or capital repayment. It also stated that "Over the past thirteen years Mrs Little alleges she has made repeated representations to Goldberg to finalize the estate and repay her investment with interest. To date she has had no success. Our representation to Goldberg by letter has been ignored." It is submitted for the solicitor that this charge should not have been brought against him because of the lapse of time or alternatively should be rejected for that reason. I do not accept this submission. The claim is that the solicitor held moneys in trust for Mrs Little, to invest them and to account to her for both principal and interest. Mrs Little claims that she has never received any part of either principal or interest, except to the extent that the payment of $2,000 included it. In my opinion the mere lapse of time in such a case does not require a rejection of an allegation that the solicitor has failed to account, any more than it would be an answer to a civil claim made by the client for the payment of the money to her by the solicitor. It is then submitted that, having regard to the lapse of time and the absence of many of the records, the committee could not be satisfied on the Briginshaw standard of proof that there had been the alleged failure to account. Having read the relevant parts of the evidence, and in particular the evidence of Mrs Little and Mr Goldberg, I am satisfied that the majority of the committee was entitled to reach its conclusion and that this Court should not interfere with it. Mrs Little's ledger card shows that the solicitor was doing what Mrs Little asked him to do with her money, with an important exception, until the records of what happened to the money cease. He lent it out to borrowers. The important exception is that, apart from Hartshorne, the borrowers are not recorded as paying any interest. However the first borrowers are recorded as repaying their money to the solicitor. The last two borrowers and the Building Society are recorded as being paid the money, but there the matter stops. These investments had been made before Mrs Little wrote her letter to the solicitor on 16 May 1974 asking whether the $11,000 that had been invested for her would become available in June. It is apparent that she had no knowledge of the investments the solicitor's records show he had made with the money, and that she was not receiving any interest from them, although the Babbington investment had been made as long ago as January 1973. It is also quite improbable that she had expressly authorised or knew about the investment with the United Permanent Building Society Ltd made on 26 April URJ GOLDBERG v LAW SOCIETY OF NEW SOUTH WALES (Hope JA) 9 1974. The ledger account has entries up to August 1975 but there is a complete absence of any record that the money which had been invested for Mrs Little by the solicitor, and any interest on those investments, was to be paid to Mrs Little directly and not to the solicitor. The letter is in my opinion strong confirmation of the correctness of Mrs Little's claim as are the entries in the ledger. The case for the solicitor in respect of Mrs Little is that, although it is not suggested that she is lying when she says she has not received the $11,000 and interest, she is confused and her memory is bad. No doubt her evidence is in part affected by the lapse of time but it is one thing to forget or to be somewhat confused about the details of a matter and another thing not to remember, especially in her financial circumstances, that she had not been repaid her $11,000. Indeed the available objective evidence supports her case, as I have shown. Furthermore in relation to the mortgages, she said that she had received only one epitome from the solicitor, being one describing the Hartshorne mortgage and this epitome she produced. There is no evidence to establish that any other epitome was ever given to her. It is true that even on her version her complaints to the solicitor were infrequent, but her accounts of the two visits to the solicitor in 1980 and 1982 had the ring of truth. Each was attended by rather unusual circumstances. The first was associated with the funeral of her mother, and she was accompanied by her now deceased father. The second was a meeting arranged for a Sunday at the place where Mrs Little was stopping. I see no reason why this evidence of Mrs Little should be rejected. Again I see no reason why her evidence that she sought to get explanations from the solicitor by telephone should be rejected. Finally, her accountants wrote to the solicitor and got no response, and this led to the formal complaint about his conduct. In my opinion there was ample evidence upon which the majority of the committee could reach their findings of fact in the matter. On the evidence and their findings they concluded that; (a) The solicitor had wilfully caused and allowed money entrusted to him by Mrs Little to be applied without the authority or contrary to the instructions of Mrs Little or grossly preferred the interests of other clients to the detriment of those of Mrs Little; (b) The solicitor had wilfully failed to comply with the requirements of s41(1) that the moneys received on behalf of Mrs Little were held by him exclusively for her, to be paid to her or to be disbursed as she directed and until so paid or disbursed to be paid into a trust account; (c) The solicitor had wilfully failed to comply with the requirement of s42(2) to keep an account of all moneys received by him and required to be dealt with in accordance with s41(1) in such a manner as to disclose the true position in regard thereto and to enable the accounts to be conveniently and properly audited; (d) The solicitor was guilty of gross neglect and delay in relation to the handling of Mrs Little's affairs. In my opinion the majority of the committee was correct in coming to these conclusions and there is no occasion to interfere with them. It has been submitted that none of the solicitor's acts or omissions could be considered wilful. However, once Mrs Little's evidence was accepted, the finding of wilfulness was open, and in my opinion was correct. The solicitor did not invest Mrs Little's money so as to produce a return for her. He did not account to her for her money as she had requested and as he had promised to do. The solicitor at least was recklessly indifferent to the need to keep proper accounts. And this was a position 10 UNREPORTED JUDGMENTS that continued for over ten years. This misconduct can properly be regarded as wilful: Re Miles; Ex parte Law Society of New South Wales (1966) 84 WN (Pt 1) (NSW) 163. I agree with the majority views. 2. Estate of de Vulder In this matter the testatrix died on 1 January 1976 and the executors of her will were Mr VJ Job and the solicitor. Apart from $1.00 in a bank account, her estate comprised a property subject to a mortgage and some furniture. On 25 May 1978 a contract was entered into for the sale of the property which apparently resulted in litigation. Mr Job and the solicitor obtained a grant of probate on 3 December 1979 and the litigation was partially settled on 8 January 1980. In her report Miss Sayer alleges that the solicitor owes the estate the sum of $8,739.39. The solicitor denies this allegation and claims that he and Mr Job have made a full accounting to the estate. The beneficiaries of the will of the testatrix were infants at the time of her death and Mr Job took on the position of caring for them. The first of the two substantial allegations in relation to the solicitor's handling of this estate concerned the payment of $7,400 by the solicitor out of estate funds to Wal Truscott and Co Ltd to enable Mr Job to buy a campervan. Mr Job's evidence was that he had an opportunity of buying a campervan and because he used to take the children to and from various places, he asked the solicitor to lend the money to him which he said in evidence he thought was a personal loan. However, as the Committee pointed out, this could not be right because Mr Job gave evidence that he repaid $5,000 to one of the children, Robert de Vulder, who waived other payments. It is apparent that this transaction was completely irregular and in breach of trust and that the solicitor should not have allowed it to take place. The second substantial allegation concerned a mortgage advance of $6,500 made by the solicitor (co-executor) from the estate funds to Mr Ludwig on the security of a property at Mudgee. The evidence established that of the $6,500, $4,531 dollars was paid by the solicitor's trust account cheque to Messrs Wade Hickson and Debenham in respect of an outstanding judgment for rent then owing by the solicitor in respect of premises where he previously carried on his practice. Mr Job did not recall much of the transaction but he said that the advance was arranged by the solicitor who claimed that Mr Ludwig owed him money and he was thus entitled to use portion of the moneys lent on mortgage by the estate to draw a trust cheque in the relevant amount in favour of Messrs Wade Hickson and Debenham. The solicitor's evidence is that he had the approval of Mr Job to make this mortgage but there is a file note to the effect that the solicitor did not speak to Mr Job concerning it until 11 August 1980, and the mortgage itself is dated 5 August 1980. It is not in issue that the amount of the loan was subsequently repaid by Mr Ludwig. In my opinion this was a most improper transaction for a solicitor to arrange and implement, as indeed counsel for the solicitor rightly conceded. It was primarily done not for the benefit of the estate but for his own benefit. Mr Job was a relatively uneducated and it would seem simple person who relied on the solicitor to advise him as to what he should or could do as executor. The evidence strongly suggests that the solicitor took advantage of his position and at the very least failed to give proper advice to Mr Job. The fact that the beneficiaries were infants made it imperative for the solicitor/co-executor to make sure that the trust was properly administered, and this he singularly failed to do. The majority of the Committee found that there was an intermingling of the solicitor's personal URJ GOLDBERG v LAW SOCIETY OF NEW SOUTH WALES (Hope JA) 11 affairs with that of the estate by reason of his use of a trust cheque to pay for his outstanding office rent. It is submitted that there was no "intermingling". As I have already said, the evidence shows that a purpose, and probably the principal purpose, of the loan to Mr Ludwig was to enable the solicitor to be repaid the money owed to him by Mr Ludwig and thus to pay the rent the subject of the judgment. This is clearly a case of a solicitor/trustee using the trust for his own purposes and is properly to be regarded as an intermingling of his affairs with the affairs of the trust, which he was bound to keep quite distinct and separate. In relation to the Ludwig mortgage, it also appears that, although the title deeds of the mortgaged property were held by Mr Goldberg, no mortgage was registered and no caveat was placed on the title. The holding by the solicitor of the title deeds was regarded, in my opinion correctly, by the majority as no justification for not registering the mortgage, and in this regard also the solicitor failed to carry out his duty. The majority also found that there was no evidence that the solicitor had ever made a proper accounting to the estate. An undated statement of account addressed to Mr Job and produced by the solicitor showed a balance of $10,777.15. However the solicitor claimed that the sum of $7,400 paid on Mr Job's behalf for the campervan included some $4,200 owed to Mr Job for money he had paid out to the children on behalf of the estate and he also claims that he had himself advanced money from his own funds to the infant beneficiaries from time to time. This left the committee to determine the true position of the estate. The majority of the committee made the same findings in respect of the de Vulder estate as they had found in respect of Mrs Little, that is, they answered Questions 1, 2, 3 and 4 in the affirmative in relation to the solicitor's handling of the affairs of the estate. In my opinion the majority of the committee was correct in giving these answers to those questions. 3. Estate of Martin Mr Martin died on 5 March 1977 and probate of his will was granted to the solicitor on 1 March 1979. The only asset was an amount of $22,469.52 payable by the Local Government Superannuation Board. The solicitor received this sum on 20 March 1979. On 31 August 1977 Mrs Martin complained to the Solicitor of delay in collecting this asset. On 21 March 1978 the solicitor paid her $1,000 from his own funds. It would seem that he also paid her a further sum of $2,000 on 22 March 1979 from estate funds. The solicitor claimed that the delay in obtaining probate arose from a Notice of Claim against the estate from a child of a former marriage of the testator and that a further delay arose after the receipt of the superannuation moneys because of a requirement to advertise notice of intention to distribute the estate. The final distribution to Mrs Martin was made with the payment of $1,662.75 on 31 October 1980. Accepting an explanation by the solicitor as to why this cheque was not received by Mrs Martin and that it was later paid by the solicitor by a fresh cheque, the majority concluded that the delay from 20 August 1979 to 31 October 1980 in accounting to Mrs Martin was totally unacceptable, They also concluded that the delay of two years between the death of the testator and obtaining the sole asset of the estate was "reprehensible", It also appeared that there was still a balance of $753.80 to the credit of the estate in the trust ledger account. The solicitor claimed that $219.64 of this amount was due to him in respect of a memorandum of costs and disbursements dated 20 October 1980 and that the balance or portion of it was due to him for costs in respect of other 12 UNREPORTED JUDGMENTS matters in which he acted for Mrs Martin. However the solicitor had not issued any bill in respect of these costs, nor did he produce a copy of the bill dated 20 October 1980 to the committee. The solicitor thus held the sum of $753.80 in his trust account since 6 November 1981 and no steps had been taken by him to establish an entitlement for costs or to account to Mrs Martin for that amount. The finding by the majority of the committee was that the solicitor was guilty of gross neglect and delay in relation to the affairs of the Martin estate. I am satisfied that on the evidence they were correct in this finding and that there is no occasion for this Court to interfere with it. 4. Estate of Symons The late Mrs Kathleen Symons died on 2 November 1983 and by her will which had been prepared and was held by the solicitor she appointed John Alexander Richmond and Jeffrey Alan Richmond to be executors. The solicitor was instructed several days after Mrs Symons died to act on behalf of the executors. The estate included four savings bank accounts, debentures in two companies and a life assurance policy. The solicitor did not make application for a grant of probate until 15 November 1984. On 16 November 1984 he swore an Affidavit of Delay of which the relevant part stated: "There are two Executors named in the Will of the deceased, namely John Alexander Richmond of 145 Darwinia Terrace, Rivett in the Australian Capital Territory and Jeffrey Alan Richmond of 9 McNamara Avenue, Concord in the State of New South Wales and difficulties arose concerning a mutually convenient time for the Executors to attend this office in order that execution of the documents filed herein could be made." In a statutory declaration tendered by the solicitor in the proceedings before the Committee he said that the affidavit was true. He also said that when Mr Jeffrey Richmond attended his office to sign the papers he said that his brother, who was resident in Canberra, might have some difficulty in attending the solicitor's office to sign the papers. The solicitor said that he was proposing to travel to Canberra on business and he suggested that he might see Mr John Richmond while he was in Canberra in order to save him travelling to Sydney. However his arrangements were changed and he did not go to Canberra. He said he believed it was always a prudent course to explain all documents to the parties and he was loathe to have the documents executed by the co-executor without following the course he had suggested, namely, that they be executed by Mr John Richmond in his presence at Canberra. He agreed that one of the Richmonds had got in touch with his secretary and arranged to take them down and have them signed in Canberra. He claimed that his explanation for the delay in the affidavit was correct and denied that it arose from his failure to attend Canberra as he had originally suggested to one of the executors. In a letter of complaint dated 24 July 1984 to the Law Society Mr Jeffrey Richmond set out his version of the history of the matter. Mr Jeffrey Richmond lives at Concord West, a suburb of Sydney. He said that, following a request from the solicitor's office to his father in February 1984 to go to the office to sign the necessary papers, he went there and at this time Mr Goldberg informed him that he would be going to Canberra on business within the next two weeks and would contact John to have him sign the papers. The solicitor accepts that this statement is correct. Mr Jeffrey Richmond went on to say that the solicitor did not contact Mr John Richmond in Canberra and having received no further word Mr John Richmond wrote to the solicitor asking about progress of the application for probate. No reply was received and after many further telephone calls Mr Jeffrey URJ GOLDBERG v LAW SOCIETY OF NEW SOUTH WALES (Hope JA) 13 Richmond went to the solicitor's office and saw the solicitor who told him he would be in Canberra for a conference in about two weeks time. Nothing happened and on 8 June 1984 Mr Jeffrey Richmond went to the solicitor's office again to be told that he was busy somewhere else in the city. Several attempts to get action followed without success and finally Mr Richmond senior called into the solicitor's office in August 1984 and collected the documents for signature by Mr John Richmond. Having heard and read the solicitor's explanation of the matter, the majority of the committee concluded that the affidavit was misleading, and that the delay in obtaining probate did not arise from a difficulty concerning a mutually convenient time for the executors to attend the solicitor's office in order to execute the necessary documents, but was due to the solicitor's failure to do what he said he would do, namely, attend upon the executor in Canberra to have the documents signed. I agree with the majority that the affidavit was misleading. No difficulty arose concerning a mutually convenient time for the executors to go to the solicitor's office. The solicitor's intention, which was accepted by the executors, was that on a trip which he was to undertake to Canberra he would get in touch with Mr John Richmond and have him sign the documents. His failure to do that led to the delay. The statement in the affidavit was an attempt to put part of the blame for the delay on his clients, while in fact it was wholly his. I accordingly conclude that the finding by the majority that the solicitor provide misleading information to the Court was correct. The majority also found that, although the delay was occasioned by the solicitor, it would not describe it as gross. 5. Brunskill and Bloyd Complaints and Cancellation of Solicitor's Practising Certificate on 19 September 1985 A. The Brunskill Complaint In a letter written on 12 February 1985 but wrongly dated 12 January 1985 Messrs NJ Schweizer and Co, solicitors, complained to the Law Society that they could get no reply from the solicitor to letters written by them to the solicitor of 14 December, 1984, 14 January 1985 and 25 January On 19 February 1985 Miss Virginia Ledingham, a solicitor employed by the Law Society, wrote to the solicitor enclosing copies of the correspondence from Messrs NJ Schweizer and Co and asking for the solicitor's comments within 14 days. There was no response and Miss Ledingham wrote again to the solicitor on 22 March 1985, 26 April 1985 and 31st May 1985. On 12 June 1985 she received an undated letter from the solicitor in his own handwriting in which he referred to problems with regard to office accommodation and difficulty in locating files, and asking for further time in which to reply. Miss Ledingham wrote letters to the solicitor subsequently on 13 June 1985, 17 July 1985, 7 August 1985 and 22 August 1985 but got no response. On 6 September 1985 Miss Rosemary MacDougal, the solicitor for the Law Society, wrote to the solicitor informing him that at its meeting on 5 September 1985 the Council of the Law Society had resolved that he be asked for an explanation for not replying to the earlier correspondence and for his comments in relation to the original complaint. His attention was drawn to the provisions of s71(c) of the Legal Practitioners Act which provides that the Council may cancel a certificate if the holder shall have, when called upon by the Council so to do, failed to give a satisfactory explanation touching any matter relating to his conduct as a solicitor, and such failure continues. He was also told in the letter that unless a 14 UNREPORTED JUDGMENTS satisfactory explanation was received by 18 September 1985 the Committee would, pursuant to the Council's resolution, recommend to the Council on 19 September 1985 that his practising certificate be cancelled pursuant to s71(c). B The Bloyd Complaint On 28 February 1985 Desmond Barry Bloyd, a client of the solicitor, wrote to the Law Society complaining of delay in accounting in the settlement of a third party claim. Mr Bloyd wrote a further letter on 4 March 1985 to the Law Society enclosing a letter he had received from the solicitor on 1 March On 7 March 1985 Miss Ledingham wrote to the solicitor enclosing copies of Mr Bloyd's letters, seeking answers to six questions in her letter, and asking for a reply within 14 days. Miss Ledingham wrote again on 25 March 1985, 28 March 1985, 19 April 1985, and finally received a reply from the solicitor dated 1 May 1985 attaching a number of enclosures relating to the relevant transaction. On 27 June 1985 Miss Ledingham wrote again to the solicitor following receipt of further comments from Mr Bloyd and asked for the solicitor's comments in respect of costs which he had charged. Receiving no reply she wrote again on 27 June 1985, 17th July, 7 August 1985 and 22 August 1985. No reply was received from the solicitor. On 6 September 1985 Miss Rosemary MacDougal wrote to the solicitor drawing his attention to s71(c) of the Legal Practitioners Act and telling him that unless a satisfactory explanation was received by 18 September 1985 for his failure to reply to the Society's correspondence, she would recommend to the Council on 19 September 1985 that his practising certificate be cancelled pursuant to s71(c). On 10 September 1985 Miss Ledingham again wrote to the solicitor informing him that she had received a copy of a memorandum of costs and disbursements issued by previous solicitors for Mr Bloyd and saying that this did not answer all the queries raised in her letter of 22 June 1985, a copy of which she enclosed. The majority of the Committee noted that there appeared to be no substance in Mr Bloyd's complaint that the solicitor had delayed in his accounting following receipt of the settlement moneys, and that the matter had been referred to the Committee simply on the basis of the solicitor's failure to attend to routine correspondence and to answer with some degree of promptitude the inquiries made by his professional body. However the majority also noted that Mr Bloyd's complaint in relation to costs was still in contention between him and the solicitor and that although the solicitor had stated that it was his intention to have a bill prepared in taxable form, this had not been done at the time of the hearing before the committee, the solicitor stating in evidence that he was attempting to negotiate a settlement in respect of his costs. Subsequent action and evidence On 19 September 1985, the solicitor having failed to respond, the Council of the Law Society resolved to cancel the solicitor's practising certificate. The solicitor filed a notice of appeal to the Supreme Court against this decision on 10 October 1985. By reason of the provisions of s72 of the Legal Practitioners Act, the solicitor was thereupon deemed to hold a practising certificate pending the disposal of the appeal. There were a series of adjournments of the appeal and it was finally stood over to await the outcome of the present proceedings. In his evidence before the committee the solicitor's explanation for his conduct was that he was locked out of his former office premises in Martin Place, Sydney, on 11 March 1985 after a dispute with his landlord and he had to take alternative accommodation with another firm of solicitors until June 1985. He said that he URJ GOLDBERG v LAW SOCIETY OF NEW SOUTH WALES (Hope JA) 15 had personally attended upon Mr John Hunt, the secretary of the Law Society, and advised him of his problem. In addition he said he was involved in heavy court appearances and found difficulty in furnishing replies to the correspondence but that he spoke to Miss Ledingham by telephone on a number of occasions in respect of both complaints and advised her of the situation. The majority said that the solicitor's attitude to the Law Society's inquiries were no better illustrated than in the following question and answer: "Q. Do you say that your dealings with the Law Society throughout 1985 in relation to the matters of Brunskill and Bloyd showed a high degree of professionalism on your part? A. In all of the circumstances I thought so. It thought it was appropriate to ensure that the Society was kept advised of what was going on and to obtain my views and they were well known. Indeed, there was... well, they were well known. The Committee concluded that it could not accept the solicitor's explanation as justifying his failure to reply to the correspondence from the Law Society which in their opinion demonstrated a chronic failure on the part of the solicitor to face up to very proper inquiries from his professional body. In submissions to the Court counsel for the solicitor asserted that the minority came to the same conclusion as the majority in respect of this matter. They did not do so explicitly but it may be implicit in the second part of par 7 of their findings. However this may be and despite the problems which the solicitor had by reason of his accommodation problems, the failure by the solicitor to reply to the correspondence was quite unjustified. Counsel for the solicitor took exception to the use of the word "chronic" to describe the solicitor's failure. It seems to me to be a most appropriate word. In my opinion the conclusion of the majority on this question was correct. 6. Continuing to practise after 30 June 1986 The solicitor's practising certificate expired on 30 June 1986. He made an application to renew it but the Council of the Law Society refused his application on 7 July 1986. He received notice of this refusal early in August 1986. He claims that he had left with the Law Society a form in respect of professional indemnity cover together with a cheque for the premium, but it is not in question that this cheque was never presented. The Law Society claimed that it had not been received and in fact the solicitor filed an application for professional indemnity insurance and lodged a cheque for the premium with the Society on 30 September 1986. After receiving notice of the refusal he had a telephone conversation with Miss Ledingham in which he told her he would be filing an appeal against the refusal the next day. He was aware of the consequences of not having a practising certificate and of the effect of an appeal because he had failed to renew his certificate on 30 June 1976 and continued to practise until 2 December 1976 without a certificate. One of the questions referred to the committee in earlier proceedings in 1977 was this failure and the proceedings before the Committee must have made the solicitor aware, if he was not already aware, of the necessity to renew his practising certificate and of the seriousness of practising without a certificate. However the solicitor did not file an appeal against the refusal until 10 September 1986, and notice of the appeal was not served on the Law Society until 29 September 1986. The solicitor claimed that someone in his office was responsible for the failure to file the appeal earlier. 16 UNREPORTED JUDGMENTS The Committee concluded that at best the solicitor took no steps between | September 1986 and 10 September 1986, when he filed the appeal, to remedy the position arising from his continued practice after the refusal to renew his practising certificate, and also that the whole picture presented by the episode demonstrated that the solicitor did not appear to appreciate the seriousness of the matter and the necessity to attend personally to the renewal of his practising certificate. This conclusion produced the affirmative answers to questions 7A, 7B and 7C. Those answers were obviously correct. None of the explanations given by the solicitor for failing to take action earlier justified that failure. His continuing to practise without having taken any action was a serious matter and showed his lack of understanding of the requirements of the Legal Practitioners Act and as well showed a carelessness about his compliance with elementary requirements of the law regulating the conduct of solicitors. 7. Gross neglect and delay The committee considered 16 charges that the solicitor had been guilty of gross neglect and delay. One of these, the Eisler Estate, was dealt with by the committee separately and I shall likewise deal with it. Of the remaining 15 charges, the Committee found that four were not established, but found that the remainder were. In error they included the four cases where they found no gross neglect and delay in the affirmative finding of gross neglect and delay in their answers to the questions. These were the cases of Wilson, Atkins, Estate of Symons and Bloyd. There are two general matters to which I should refer in respect of these charges. The solicitor's answer in respect of many of them were that costs were outstanding and bills had not yet been rendered to the client. Associated with these submissions were submissions that the amounts involved were small. The fact that a solicitor has failed to account to his client in respect of a small sum of money is no answer to a charge of gross neglect and delay. Indeed counsel for the solicitor did not suggest it should be. Again, solicitors are not entitled to retain their clients' money endlessly until they get round to rendering a bill of costs; the client is entitled to finality and the solicitor must prepare and render his bill within a reasonable time. The majority of the Committee was right in finding that a long delay in rendering a bill of costs is no answer to a charge of gross neglect and delay. In dealing with these matters, the Committee referred to s78A of the Legal Practitioners Act 1898. That section provides that where in an inquiry referred to the Statutory Committee the solicitor claims that moneys shown to the credit of the client in the trust account of the solicitor included moneys owing or which had been owing to him by the client for costs, the failure of the solicitor to produce in evidence a statement of account or a copy of such statement of account containing the full particulars of the matter or matters in respect of which the costs were incurred and showing the amount of such costs shall be prima facie evidence that the entries in the trust account relating to the matter or matters are a correct record of moneys received and paid by the solicitor, including costs paid or payable to him, relating to such matter or matters. I see no reason why, where appropriate, this provision should not have applied in respect of Mr Goldberg's affairs. In relation to most of the charges of gross neglect and delay, the solicitor had not prepared or sent bills of costs in those cases where the majority found against him so that the application of the provision. was not necessary to entitle them to reach their decision; it simply provided another basis on which to do so. URJ GOLDBERG v LAW SOCIETY OF NEW SOUTH WALES (Hope JA) 17 The matters in respect of which the committee found gross neglect and delay were these: (a) Mrs DJ Little and Estate of EM Little, I have already dealt with these matters and it is clear that the committee was correct in finding that there was gross neglect and delay both in attending to the affairs of Mrs Little and in finalizing the estate. (d) Estate of Martin An amount of $753.80 was shown as the balance in the trust account for this estate but the committee found that there was a memorandum of costs and disbursements dated 20 October 1980 in the sum of $219.64. This left a balance of $534.16 which had been outstanding since 6 November 1981. The solicitor claimed that he had carried out additional work for Mrs Martin and that the money in the trust account was owed to him. However the solicitor had not sent any memorandum of costs to Mrs Martin in respect of that work which he claims to have carried out and the Committee accordingly, in my opinion correctly, concluded that the solicitor had been guilty of gross neglect and delay in finalisihg the matter. In respect of this estate the Committee also considered the delay of the solicitor in the getting in the only asset of the estate which as I have described earlier was an amount of $22,469.52 from the Local Government superannuation Board. The solicitor was the executor of the estate and, although the deceased died on 5 March 1977, he did not obtain probate until I March 1979. The deceased's widow had as early as 31 August 1977 complained to the solicitor about the delay in collecting this asset, with the result that he paid her two sums of $1,000 and later $2,000. The solicitor sought to justify the delay in obtaining probate but in my opinion the Committee was entirely correct in concluding that there was gross neglect and delay on his part in getting in the estate's asset from the Local Government Superannuation Board. (e) Spackman Mr and Mrs Spackman saw the solicitor in March 1978 about the sale of their property to Mr and Mrs Ryan and Mr and Mrs Hogan. Contracts were exchanged on or about 3 April 1978, the solicitor acting for all parties. The contract provided for occupation of the property by the purchasers forthwith, an occupation fee at the rate of $120 per week to be paid by them to the solicitor on behalf of Mr and Mrs Spackman, the solicitor to use the moneys so received to make payments to a building society and a second mortgagee. Mr and Mrs Spackman complained after they discovered that rent payments were not being made. Investigation showed that on 6 August 1978 the solicitor received a letter from Mr Ryan enclosing a cheque for $600 for rent from 4 July to 8 August 1978. This cheque was not paid into a trust account, but was in fact appropriated by the solicitor for costs he claimed were owing to him by the purchasers. In a statutory declaration the solicitor said that after Mr Ryan had posted the letter he had a telephone conversation with him in which the question of outstanding costs was discussed and in the event Mr Ryan instructed him to ignore the directions in the letter which he had posted and to apply the cheque for his costs. It is submitted that the solicitor was not cross-examined about the letter but it is apparent that he had already given his explanation about it in his statutory declaration, and in oral evidence he said that he had answered the matters concerning the Spackman material that Miss Sayer had referred to. The Committee said that the solicitor's evidence was in direct contradiction to Mr Ryan's letter in which the cheque was forwarded to cover rent and it did not 18 UNREPORTED JUDGMENTS accept the solicitor's evidence about the matter. It also noted that no copy of a memorandum of costs amounting to $600 or any figure near that was tendered by the solicitor. There is no charge against the solicitor in relation to his persuading Mr Ryan to authorise him to apply the money which he had sent for rent in satisfaction of the costs which the solicitor claimed Mr Ryan owed him but to put it at its very lowest the solicitor's evidence does not suggest that he has a_ proper understanding of his responsibilities. However, even if one accepted the submission made for the solicitor that the Committee was in error in rejecting the solicitor's evidence, I do not think this would lead to a conclusion that the solicitor was not guilty of gross neglect and delay in relation to the matter. Applying Mr Ryan's cheque for his costs without Mr Ryan's instructions would of course have been a serious matter, but being a party to an arrangement denying Mr and Mrs Spackman the benefit of the cheque, without attempting to get instructions from them, and placing their relationship to the building society and the second mortgagee in jeopardy in order to prefer his own interests is only slightly better, if better at all, and would equally justify a conclusion the solicitor was guilty of gross neglect and delay. However the majority was in the circumstances entitled to reject the solicitor's explanation, and to make the findings which it did not only in respect of gross neglect and delay, but in their answer to Questions 2 and 3. A further aspect of the charge concerned money which had been left in the trust account since 31 January 1981 without being accounted for to Mr and Mrs Spackman. I agree. with the committee's conclusion that the solicitor had been guilty of gross neglect and delay in respect of this matter. (f) McLardy This matter concerns a balance of $226.80 remaining in the trust ledger account for the solicitor's client since 23 September 1981. Part of this amount was owing to the solicitor for costs but there had been no accounting by him to the client in respect of the matter and of course no payment by him to the client of the balance. The committee was correct in finding that the solicitor had been guilty of gross neglect and delay in finalising the matter. (h) Estate of Symons I have referred to this matter previously. The committee found that delay was occasioned by the solicitor but did not propose to categorise it as gross. The counsel for the Law Society has submitted that it should be found to be gross. However no notice of contention has been filed and I do not think that it appropriate to consider whether the delay was gross. (i) Forrester This matter concerns a sum of $339.28 which had been in the trust account since May 1984. The solicitor claimed that costs were owing to him but no action had been taken by him to render any account to his client or to send any memorandum of costs. The committee was correct in finding that there had been gross neglect or delay in the matter. Gg) Vukman This again is a matter where a balance has been left in the trust account for a long period, namely from 4 December 1981, without any accounting to the client, and without the solicitor sending the client any memorandum of the costs which he claims are owing to him. URJ GOLDBERG v LAW SOCIETY OF NEW SOUTH WALES (Hope JA) 19 The committee was correct in concluding the solicitor had been guilty of gross neglect and delay. (k) Legge The balance of $161.00 was held in the trust account for Mr and Mrs Legge since 17 June 1980. The solicitor conceded in evidence before the committee that the money should have been paid to the clients, that it was an error on his part that it had not been paid, and that in all probability he had forgotten about it. The committee was correct in regarding the solicitor as being guilty of gross neglect and delay in finalizing the matter. (1) Brown A sum of $50.00 has been held in the trust account since 5 April 1984. The solicitor claims that this money was paid to him on account of costs. However no account had been rendered for those costs or any accounting, and accordingly the committee was correct to conclude that there had been gross neglect and delay in the matter. (m) Estate of de Vulder Ihave already described the conduct of the solicitor in respect of the de Vulder estate. It will be remembered that the beneficiaries were infants. As the Committee found, the solicitor was unable to satisfy it that he had made any proper accounting in the estate and it was accordingly correct in finding that there had been a gross neglect and delay in finalising the affairs of the estate. (n) Ross Ross was one of the defendants in relation to the shootings alleged to have taken place between two motor bicycle groups at the Viking Tavern, Milperra, on 2 September 1984. Before then the solicitor had been instructed by Ross to appear for one Jeschke at the Taree District Court on 21 November 1983 when bail in the sum of $4,000 was lodged by Mr Ross. The solicitor later appeared for Jeschke at the Manly Court of Petty Sessions. The solicitor said that Ross instructed him that he would pay all costs and expenses of Jeschke in relation to the Taree hearings and possibly the Manly hearings. The solicitor issued a memorandum of costs dated 7 August 1984 to Jeschke in respect of the Manly hearings in the sum of $200.00. Jeschke and others were shot dead at Milperra on 2 September 1984 and Ross and other persons were charged with murder. The solicitor was instructed to appear on behalf of Ross and some other defendants and, having seen him at the Liverpool District Hospital on or about 13 September 1984, appeared at the Bankstown Court on three occasions in September 1984 and made appearances for other defendants which the solicitor says were at the request of Ross, who undertook to meet all his costs. The $4,000 bail which Ross had lodged on behalf of Jeschke was received by the solicitor on or about 16 December 1984 from Mr Ross, when the solicitor visited him at the Metropolitan Remand Centre. The solicitor said that legal aid for Ross was not obtained until 4 December 1984 and that he was entitled to costs for appearances and work on behalf of Ross and other defendants before the grant of legal aid. Miss Sayer reported that two amounts were transferred out of the trust account totalling $1,000, leaving a balance of $3,000 in the trust account as at 4 December 1984. The solicitor claimed that the sum of $3,000 was due to him for costs in respect of appearances for Jeschke, Ross and others. He had not been able to prepare a memorandum of costs because of a dispute with counsel, who was not called as a witness. The committee concluded that whatever the position might be with respect to the dispute with counsel, there was no reason why the solicitor could 20 UNREPORTED JUDGMENTS not render an account to Mr Ross covering the $3,000 already in his trust account and the committee found that there had been gross neglect and delay in failing to do this. In my opinion the committee was correct in this finding. It might be noted that the committee was also of the opinion that there had been no breach of s41(1) of the Act. 8. Estates of Otto and Hermine Eisler The late Mr Otto Eisler and his wife Mrs Hermine Eisler owned a property in Leura as joint tenants. Mr Eisler died on 30 May 1967 and Mrs Eisler died on 25 July 1983. Mrs Eisler had instructed the solicitor to obtain probate of her husband's will but requisitions were made which the solicitor claimed Mrs Eisler was unable to give him information to satisfy. He said that as a consequence he was instructed not to proceed further. When Mrs Eisler died, her son Mr Peter Eisler, decided to sell the Leura property and instructed the solicitor accordingly. He had earlier instructed the solicitor to act in respect of his late mother's estate and the obtaining of probate of her will. This was granted on 8 November 1984. Contracts for the sale of the Leura property for $15,500 were exchanged and the deposit of $1,450 paid into the solicitor's trust account on 27 February 1984. In the contract the vendor, Mr Peter Eisler, was described as the executor of the estate of the late Hermine Eisler. Although Mr Eisler was obviously in no position to complete the contract, he said that he signed it because the solicitor asked him to do so and said that the contracts were ready to be exchanged. A further delay took place and in fact the sale was not completed until April 1987 after Mr Peter Eisler had taken the matter to a new firm of solicitors in August 1986. That firm satisfied the outstanding requisitions in respect of the late Otto Eisler's estate and put the title in order for the contract to be completed. The solicitor's explanation for the delay after probate was granted of Mrs Eisler's will was that he had acted for Mr Peter Eisler in a property settlement with his former wife and a considerable amount of costs were owing to him in respect of this matter. The solicitor told Mr Peter Eisler that he would not do any more work in the estate until his costs in respect of the property settlement were paid, and he adhered to this attitude before the committee. On 13 February 1986 Mr Eisler had written the solicitor a letter enclosing a cheque for $250 on account of the costs and told the solicitor that he would pay the balance of $500 when the probate matter was completed. Thereafter Mr Peter Eisler instructed other solicitors and following correspondence between those solicitors and the solicitor, including threatened action in the Supreme Court for an order to deliver up the papers, all the papers were handed to Mr Eisler and the balance of the moneys in the trust account were transferred to the new solicitors. The committee found: " There can be no question but that the solicitor was guilty of gross neglect and delay in the handling of both the Estates for the late Mr and Mrs Eisler and demonstrated an arrogance towards Mr Peter Eisler in refusing to complete Mrs Eisler's Estate on the basis that he was not obliged to do so because there were costs outstanding to him by Mr Peter Eisler in some other matter. The Committee does not accept that the Solicitor had any justification for adopting this attitude." In my opinion the committee was correct in their conclusion as to gross neglect and delay, and I would further agree with them in the attitude they expressed to the way in which the solicitor dealt with the matter. 9. Wilson URJ GOLDBERG v LAW SOCIETY OF NEW SOUTH WALES (Hope JA) 21 This is a rather confused matter concerning a balance of $1,716.60 in the trust account of Wilson being the balance of a deposit on the sale of land. It does not seem necessary to investigate the matter for the issue appears to have been whether the solicitor had authority to make a loan investment of the deposit pending completion and, although the committee observed that there appeared to be no security taken for the loan, it accepted that the solicitor had authority to make the investment. There does not appear to be an adverse finding in this matter against the solicitor. 10. Obstruction of Miss Sayer Before the committee the Law Society alleged that the solicitor had hindered, obstructed or delayed Miss Sayer as investigator by failing to produce to her material which he had in his possession between the time when, after her appointment, she first attended the solicitor's office on 27 September 1984 and when she was appointed receiver on 18 October 1985. On Miss Sayer's evidence on her first attendance at the solicitor's office she prepared a list of missing ledger cards together with a list of missing trust account records and gave the lists to the solicitor's secretary. She also gave her a list of instruction files which she wanted to be produced. Some of the files were located and examined by her. Miss Sayer called at the solicitor's office on the following three days after her first visit, and on 18 October 1984 some missing ledger cards and files were made available to her. She left an up-dated list of files and ledger cards which were missing with the solicitor's secretary who was to telephone her when they were available. Miss Sayer said she rang on a number of occasions thereafter to see if the records were available and after the solicitor's secretary left the office she spoke to another secretary and delivered another copy of the list with a note asking the solicitor to ring her. Miss Sayer says that the solicitor telephoned her, apologised for not returning her calls earlier and said he had been involved in an accident and had not had an opportunity to find the files which had been requested. In cross-examination of Miss Sayer it appeared that an error had been made in marking files which had been produced. Miss Sayer explained the position and it is clear enough that Miss Sayers' evidence was correct. A dispute also arose as to whether Miss Ruth Carol Moreau, an employee of the solicitor, had personally delivered a letter dated 12 December 1985 together with the documents referred to in it to Miss Sayer's office, handing them to one Mr Paul Fogden. This is some months after the period the subject of the complaint, but is apparently relied on to explain some of the solicitor's difficulty in producing records. Miss Moreau claimed that Mr Fogden had signed a receipt for the letter and documents, but she gave evidence on the one hand that she had left the receipt at Miss Sayer's office and on the other hand that she had taken it back to the solicitor's office. There is a considerable degree of confusion in Miss Moreau's evidence and in the event the majority of the committee said that they did not accept that Miss Moreau delivered to Miss Sayer either the letter of 12 December 1985 or the documents to which it referred. They said they were unable to say whether the letter and the documents were ever delivered to Miss Sayer's office and noted her evidence that she could not find the original or the documents which were referred to in it. The majority concluded that on the totality of the evidence in relation to the period in question the solicitor had failed to cooperate with Miss Sayer in her investigations, failed to have files and ledger cards when requested to do so and did not do everything that he might have been expected to do to assist Miss Sayer as investigator. They formally found that the solicitor did hinder, obstruct and 22 UNREPORTED JUDGMENTS delay Miss Sayer in the performance of her duties and the exercise of the powers under s82A of the Legal Practitioners Act. The minority concluded that Miss Moreau's evidence should be accepted but that, despite the personal and professional problems that were then besetting the solicitor, he did not do all that might have been expected of him to assist Miss Sayer. As will appear, the solicitor at various times was subjected to considerable stress particularly because of family matters and the effect of them on his health but, since the findings of the minority are accepted, it is not in contest that there was some hindrance, obstruction or delay resulting from the acts or omissions of the solicitor. In the light of the whole of the evidence, I see no reason to conclude that the majority were not correct in the conclusion which they reached on the matter. Further acting without practising certificate Although the matter was not raised in the Reference itself, the majority referred to another matter concerning the solicitor appearing in court at a time when he did not hold a practising certificate. It appears on 16 July 1987 he gave evidence before the committee that he had not renewed his practising certificate which had expired on 30 June 1987, that he had not practised since that date and that he had not appeared in court for any clients since that date save to see two magistrates and tell them that he was not entitled to appear. A few days later, on 20 July 1987, he was suffering a viral infection and was unable to leave his home. He had been acting in a matter which was to be heard before McInerney J on 21 July and, having attempted without success to obtain the services of another solicitor, he briefed a barrister to appear before McInerney J at 2 pm on 20 July. The solicitor admitted to the Committee that he did not inform the barrister that he did not have a practising certificate. The solicitor said that he believed his prime duty was to his clients and he did not want to leave his client unrepresented. It appears that McInerney J asked the solicitor to place an explanation on affidavit. At the end of the hearing before the committee, this affidavit was, according to the solicitor, still with senior counsel. The majority took the view that the solicitor had again not taken appropriate steps to have his practising certificate renewed for the period from 1 July 1987 to 30 June 1988, and that it could not be and had not been suggested that he was unaware of the importance of the need to renew his certificate. The solicitor's explanation was that he had been waiting on the cash book from Miss Sayer and for further information from his bank as to the amount required for his statutory deposit, the effect of which had been that he had not obtained the necessary accountants' certificate which had to accompany the application to renew the practising certificate. Conclusions and orders It is in these circumstances that the majority concluded that the solicitor was guilty of professional misconduct and that his name should be removed from the roll of solicitors, and the minority held likewise that professional misconduct had been established, but that the appropriate order was suspension for a period of six months together with an order for the payment of the Law Society's costs. In approaching the question of what order should be made, the majority had regard, among other things, to the way in which the solicitor conducted the case before it, the evidence of character witnesses, the solicitor's history and experience, family problems and the stress created by them and the evidence of a psychiatrist, Dr Shand. The committee remarked, and it is apparent from the record, that the solicitor contested the case on an adversarial basis, that a great URJ GOLDBERG v LAW SOCIETY OF NEW SOUTH WALES (Hope JA) 23 deal of time was taken up hearing about matters not in issue and that the solicitor seemed incapable of facing up to some of the matters in the Reference even when they were obvious. He was not ready to proceed when the matter first came on for hearing and on some hearing days he was late in appearing before the committee. His conduct of his own case before the inquiry was undoubtedly not as well organised as it should have been if he had the qualities which he claims he has, and perhaps some light is thrown on his conduct in the matters the subject of the complaints by the way he acted during the hearing. The character witnesses all spoke well of him and said that he was a competent practitioner in litigation matters and particularly in criminal matters. However few of them had seen the terms of reference or had any detailed understanding of the matters which the committee had to consider. The solicitor was 54 years of age at the time of the hearing before the committee and had been in practice for some 18 or 19 years after some five years practice of the law or study of it before he was admitted. He claimed that he believed he had exhibited over those years a degree of respect for the law and that he was well respected. The Committee had no doubt that he had on a number of occasions served his clients well and faithfully without any complaints being made. There was evidence of not insignificant stress to which the solicitor was submitted in 1984 and the following years arising out of family problems. The solicitor and his wife lived together for about five years and about mid-1984 they separated, the wife taking the two younger of the three children with her. At about the same time he started to suffer considerable financial difficulties. He had had long drawn-out property settlement negotiations and court proceedings with his wife which did not conclude until mid-1987. In June 1984 his eldest son left school and moved to east Sydney allegedly to live off a brothel. The solicitor got this son a job and he then returned home but moved out again at the end of 1984. He and his friend were charged with stealing cassettes from a car and a condition was imposed on the son that he return to school. He was disappointed or disillusioned about his father's representation of him in this matter and was inclined not to speak to him thereafter, a situation which continued to exist in 1987. Dr Shand told the committee that his assessment of the solicitor's current emotional and psychological states was that they were consistent with a stress reaction, the symptoms being some insomnia, tension, defective concentration, intermittent or perhaps occasional depression and lack of energy in the chronic sense. In addition to the other matters leading to stress were his daughter being run over by a motor bike and suffering a leg injury and the death of a solicitor colleague. Dr Shand advised him to take a rest from his practice. He questioned the solicitor about the possibility, in view of what he had to face before the committee, that he may have been burying his head in the sand like an ostrich rather than shaping up responsibly to what he had to face. The doctor also said that he had asked him whether he had in the past fulfilled responsibilities in a prompt and adequate way, and that there might be some doubt that he had always been efficient in that sense. Dr Shand thought that if he had a rest he might be successful in being more able to devote himself to the adequate preparation of information to put before the committee but that if the reason for procrastination lay to a significant extent in his past and a chronic personality function, that is, if he had always had a tendency to procrastinate, then there was less of a guarantee that this would happen. The committee referred to Dr Shand's evidence 24 UNREPORTED JUDGMENTS and to the solicitor's evidence that he believed that any problems which had confronted him late in 1986 had now been removed and that he did not anticipate any recurrence. Counsel for the Law Society had put to the committee "that the common thread about each of the classes of conduct of (the solicitor) is the apparent inability or refusal of the solicitor to attend to either tasks of a routine nature in the conduct of his legal practice, or to the inquiries of clients, the Law Society, its investigator and ultimately the receiver appointed by the Court." It was in these circumstances that the majority concluded that the solicitor had demonstrated an unfitness which required him not to be allowed to practise in the future and that his name should be removed from the roll. They said they believed this course was appropriate in the interests of the public and of the profession as they were not satisfied that if they made an order which allowed the solicitor the right to practise after a period of suspension, he would not at some time in the future be referred for conduct similar to that which had been referred to the committee on this occasion. Having made the findings to which I have previously referred, the minority said: "There is no evidence of dishonesty. The evidence shows neglect, disorganisation and delay, occurring in a comparatively small number of matters covering many years of practice. The evidence as to character shows substantial competence and care for the interests of clients, particularly in the field of criminal advocacy. The totality of the evidence does not indicate unfitness to remain on the roll. However the solicitor's attitude to the enquiries made by The Law Society and particularly the facts surrounding his practising without a certificate warrant in this case a greater penalty than a reprimand." As I have earlier indicated, it is conceded for the solicitor that he was guilty of professional misconduct and that some appropriate order restricting or suspending his right to practise should be ordered. A very strong submission has been made that since his failings have been in conveyancing and similar areas which involve the receipt and disbursement of and accounting for money are concerned and his principal activity has for some years been in the criminal area, an order should be made that he be only allowed to practise as an employed solicitor and not in any area which involves the handling of money for clients. In the alternative it is submitted that the proper order is that which the minority recommended, suspension for six months. I find it difficult to come to a conclusion that it has been shown that the appellant is not a fit and proper person to be a solicitor in respect of conveyancing and other matters involving the handling of clients' money but that nonetheless he should be left on the roll and held out to the public to be a fit and proper person to be a solicitor in other respects. As it seems to me the circumstances in which it would be possible or appropriate so to compartmentalise a solicitor's activities in this way would be unusual. However, each case must be looked at on its own facts. The purpose of any order made by a court in respect of a barrister found guilty of professional misconduct was said by the High Court to be "from the public point of view, for the protection of those who require protection, and from the professional point of view, in order that abuse of privilege may not lead to loss of privilege"; Clyne v New South Wales Bar Association (1960) 104 CLR 186 at 202. With appropriate adaptation of the purpose of protecting the profession to one suitable to solicitors, the same purpose applies to the making of orders by the URJ GOLDBERG v LAW SOCIETY OF NEW SOUTH WALES (Hope JA) 25 Statutory Committee and the Court when a solicitor has been found guilty of professional misconduct. In the present case, from the public point of view, the question to be resolved is whether the solicitor is a fit and proper person to be left on the roll of solicitors but limited to practising as an employee in matters not requiring the keeping of accounts, or alternatively suspended from practising for a period such as six months and then resuming practice, possibly in a similarly limited way. Would the public be adequately protected by taking either of these two courses? From the point of view of the profession, the question arises whether its standing and reputation for integrity and reliability with the public would be adequately protected by taking either of these courses. It has been amply established that the solicitor cannot be relied upon to handle matters of the ordinary commercial, conveyancing, probate and like kinds which often form the basis of a solicitor's practice. Likewise he cannot be trusted to deal properly with moneys which he receives from clients in this type of matter. It is also amply established that he is quite careless about the requirements which the law imposes upon solicitors if they wish to practise. Furthermore, proceedings had previously been taken against the solicitor in respect of four complaints from clients, three concerning alleged neglect and delay in accounting for moneys and one for neglect and delay in the handling of a probate matter, and a complaint by the Law Society that he continued practising despite a failure to renew his practising certificate, the period when he so practised being from | July 1976 to 1 December 1976. On 27 October 1977 the Statutory Committee found these complaints proved, severely reprimanded the solicitor in respect of his failure to renew his practising certificate, reprimanded him for his failure to deal promptly with the four complaints from clients, and fined him $1,000. The solicitor relied, inter alia, on stress and ill health in relation to these matters but the Committee did not regard them as excusing what he had done. Some of the matters the subject of the present complaints commenced before and were current at the time of that earlier decision in December 1977. Thus the matters concerning the Little Estate, Mrs Little and the Martin Estate had commenced by then. Others occurred during the late 70s and early 80s such as the matters concerning the de Vulder Estate, the Spackman matter, Vukman and Legge. Others commenced in 1983 or 1984 or later such as the Eisler Estate, Ross and the Estate of Symons, and failure to renew his practising certificate. Thus the solicitor's misconduct and failures have occurred over a period of ten years and more, and they have occurred despite the strong warning given to him by the action which the Committee took in 1977. It is apparent, and of course it is not contested, that this record demands that action be taken for the protection of the public and of the profession. The more difficult question to decide is whether, in the circumstances, adequate protection would be given by making either of the orders which the solicitor seeks. In his favour it is most important that dishonesty is not charged or established, but the findings of mishandling of money cut down to a considerable extent the significance of this factor. The complaints which have been established against the solicitor have not been limited only to conveyancing and probate matters. Thus Ross was a matter concerning criminal proceedings. Again his unreliability has not been shown only in relation to money matters. He has neglected the interests of his clients and shown himself to be unreliable in handling their affairs, quite apart from what has happened in relation to their money. On the 26 UNREPORTED JUDGMENTS other hand it is submitted that there is no evidence of any inability on his part to act as an advocate and adequately and faithfully to promote and protect the interests of his clients in court. As it seems to me the evidence throws doubt on the solicitor's reliability generally, and not simply in particular fields. His action in instructing counsel to appear before McInerney J when he did not hold a practising certificate and his misleading affidavit in the Symons Estate matter show an unreliability in relation to matters concerning courts. The way in which he dealt with his own matter before the Committee certainly does not indicate reliability. But perhaps more significantly I am not persuaded that the unreliability which has been amply demonstrated in some areas of his practice is not liable to be repeated in every part of his practice, and in particular would not be liable to be repeated when acting for clients in criminal or civil litigious matters if he were allowed to do so. Furthermore, although undoubtedly stress and health must have played a part in the solicitor's failings, those failings stretch over such a long period and are so repeated that I am unable to have any confidence that the public would be adequately protected even if he were allowed to practise only in criminal matters. Lawyers, and particularly those who appear regularly in courts, are continually subject to stress. If the order sought by the solicitor were made, the Court would be holding out to the public that it was satisfied that he was a fit and proper person to have that professional role and that he could be relied upon to act in a proper and timely way for all his clients. With regret I must say I cannot be so satisfied and I feel unable to hold the solicitor out as such a fit and proper person. Again I do not think the standing and reputation of the profession would be adequately protected making such an order. The solicitor himself feels that there will be no recurrence of his previous feelings and deficiencies. Dr Shand's view appears to be that this would depend on whether the failings and deficiencies were simply the result of temporary stress and ill health, or whether they had some more basic cause. In my opinion the evidence does not suggest that they were lapses with some temporary cause; they would seem to stem from an essential unreliability and lack of responsibility which deny that the solicitor is a fit and proper person to be allowed to continue to practise. Ihave accordingly concluded that this is not an appropriate case in which an order allowing the solicitor to remain on the role but restricted in his right of practice. For similar reasons I do not consider that the order merely suspending the solicitor from practice for some temporary period would provide a proper protection to the public. In my opinion the appeal should be dismissed with costs. Samuels JA I agree with Hope JA. I may say that, alike with him, I have givenanxious consideration to the question whether Mr Goldberg might, consistently with the protection of the public, be permitted to practise in some legal field, or merely suspended for a limited period. I conclude that neither of these orders would meet the case. I am afraid that the solicitor must be removed from the roll. Mahoney JA I agree with Hope JA. As his Honour has indicated, it is central to the consideration of this matter that the matter has proceeded on the basis that no dishonesty was alleged against Mr Goldberg. What is required, in the public interest, must be assessed upon that basis. URJ GOLDBERG v LAW SOCIETY OF NEW SOUTH WALES (Mahoney JA) 27 On that basis, the allegations against him proceeded on, inter alia, two bases: that no satisfactory explanation has been given of what he did or failed to do; and that, in respect of some matters where an explanation has been given, the explanation discloses unsatisfactory conduct. I take into account what has been put for Mr Goldberg in relation, for example, to the lapse of time, the suggested loss of records, and the like. But, for the reasons detailed by Hope JA, the position is so unsatisfactory that it amounts to misconduct in a professional sense. It has been asked that a special order be made. For the reasons given by Hope JA, I do not think that that course is appropriate. I agree with the orders proposed. Appeal dismissed with costs Counsel for the Appellant: G James, QC, and CM Simpson Solicitors for the Appellant: Bowman and Mackenzie Counsel for the Respondent: GC Lindsay Solicitors for the Respondent: Rosemary MacDougal