THE LAW SOCIETY OF NEW SOUTH WALES v KEEFE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL KIRBY P, MAHONEY and MEAGHER JJA 12, 13 October 1989, 15 November 1989 [1989] NSWCA 207 LEGAL PRACTITIONERS — solicitor — professional misconduct — breaches of Legal Practitioners' Act 1898 — sole practitioner in compensation and litigation practice — specific complaints of unauthorised deductions from compensation award moneys and common law damages verdicts of amounts on account of costs — whether general authority to solicitor to deduct amounts — whether moneys received paid into personal account amount to deliberate misapplication of client's moneys — whether deduction from award moneys in compensation cases constitutes a breach of s55 and s56 Workers' Compensation Act 1926 — held: (1) The solicitor's practice of deducting costs from workers' compensation payments paid to him on the worker's behalf was unlawful, contrary to s56(2) Workers' Compensation Act 1926 and constituted professional misconduct; (2) Nonetheless, on this and other findings, the Court would not disturb the opinion of the Committee that the solicitor had not acted with deliberate dishonesty; (3) In two cases where the solicitor had admitted conscious wrong-doing, the Court was authorised to substitute its opinion of such wrong-doing for the contrary conclusion of the Committee; (4) Nevertheless, for the protection of the public, it was not necessary in all of the circumstances to remove the name of the solicitor from the roll of solicitors; (5) A fine of the maximum of $10,000 was therefore confirmed but the solicitor was required to give additional undertakings to the Court which the Court required as a further assurance for the protection of the public. WORKERS' COMPENSATION — costs — deduction of costs from compensation award moneys — prohibition in S56(2) Workers' Compensation Act 1926 (see now s122 Workers' Compensation Act 1987) — meaning and requirements of — held: (1) The prohibition on the deduction of costs from compensation moneys contained in s56(2) was plain and clear in its requirements; (2) The prohibition was not confined to solicitor and client costs but provided for the protection of a worker's entitlement to compensation; (3) A routine practice of deducting costs from award moneys even where later reimbursed upon receipt of costs was contrary to the Act, unjustified by law and amounted to professional misconduct; (4) Nonetheless, in the circumstances of the case, upon the findings of the Statutory Committee as to the belief of the solicitor, the Court would not disturb the finding that the solicitor had not wilfully and deliberately acted contrary to law in making the deductions he did. Legal Aid Commission Act 1979, s41. Workers' Compensation Act 1926, s38, s55, s56 Workers' Compensation Act 1987, s122. ORDERS 1. Upon the respondent, giving to the Court the undertaking contained in the schedule to the judgment of the Court, appeal dismissed; and 2. The respondent to pay the appellant's costs of the appeal. Kirby P, Mahoney and Meagher JJA. Following lengthy proceedings before the Solicitors' Statutory Committee (the Committee), it was found that Mr Stanley Gerald Keefe (the solicitor) was guilty of professional misconduct in a 2 UNREPORTED JUDGMENTS number of respects. The Committee found the solicitor's conduct to be "far too serious a matter to justify only a reprimand". It imposed the maximum fine of $10,000 as "the appropriate penalty". However, it concluded that the solicitor's right to practise as such "should be preserved". The Law Society of New South Wales (the Society) appeals to this Court. It challenges a number of specific findings of the Committee. It challenges the reasoning of the Committee which led it to its conclusion that the solicitor was not "deliberately dishonest". It also challenges the sanction imposed by the Committee. It contends that, upon the findings made and the uncontradicted evidence (including admissions by the solicitor) the proper order was the removal of the solicitor from the Roll. The Society's case before the Committee fell into two broad categories. The first concerned a number of specific cases in which it was alleged that the solicitor had engaged in conduct which involved the unlawful, unauthorized and dishonest use of his client's funds. The second of the Society's complaints related to the practice of the solicitor, in a large number of matters, of deducting from moneys payable to a worker under the Workers' Compensation Act 1926 an amount equivalent to the solicitor's disbursements in the case. Although this sum was later reimbursed to the client worker, its deduction was contrary to the provisions of the Workers' Compensation Act, S55 and S56(2). It was alleged that the practice adopted by the solicitor was, to his own knowledge, unlawful because in 1983, a judge of the then Workers' Compensation Commission (Moroney J) had drawn the breach of the Act involved in this practice to his specific attention. This resulted at the time in the filing of an affidavit by the solicitor acknowledging a "technical breach" of the Act, accepting Moroney J's findings, sincerely apologising and undertaking that there would be no further breaches. Unfortunately, the practice resumed. The solicitor said in evidence before the Committee that he had simply forgotten this affidavit. In order to consider the Society's challenge to the findings and conclusion of the Committee, it is necessary to review a number of the particular instances relied upon, to notice the explanations given by the solicitor for them, to consider the decision reached by the Committee and to evaluate that decision in the light of the Society's criticisms and the evidence. The solicitor's practice and character First, it is useful to record something about the solicitor himself. He was employed as a legal officer of the then Workers' Compensation Commission in 1967 and 1968. He was admitted as a solicitor of the Court on 6 June 1969. He commenced practice on his own account in 1978. His practice was virtually exclusively in litigation and overwhelmingly concerned with claims for compensation or for damages for personal injuries. The uncontradicted evidence was that the solicitor was a hard worker, devoting long hours to the attention to his clients' interests. A substantial part of his practice involved appearing on behalf of working people with little or no command of the English language. According to Mrs Lillian Camillos, a registered government interpreter for the Greek language who had known the solicitor for 15 years: "[He] has at all times clearly advised his clients as to their rights and liabilities and as to how much money the clients would receive in matters in which I have been involved with him professionally as an interpreter. I have no doubt that he has not misled his clients in matters in which I have been involved with him as an interpreter. UIRKE LAW SOCIETY OF NEW SOUTH WALES v KEEFE (Kirby P, Mahoney and Meaghe JJA) [He] commences work at 7.00 am each morning and has done so since 1972... He was always available for consultation for clients every morning without appointments. I also know as a fact that he spent many thousands of dollars from his own funds for disbursements eg filing fees, doctors accounts for clients who could not afford these monies. I regard [him] as a person of the utmost honesty and integrity." There were other similar character statements. Clearly they affected the Committee. As to the payment of disbursements from his own funds, the Committee found that the solicitor had "at a period of time in excess of $90,000.00 of his own money bound up in his general account... The Solicitor apparently without any strict compulsion to do so, has paid disbursements and even part of award moneys from his general account". The Committee concluded that this conduct was "not the mark of a fundamentally dishonest solicitor". Stating its general conclusions in connection with the imposition of the "penalty", the Committee expressed the opinion that dishonesty on the part of the solicitor had not been established. Instead, it was inclined to regard his admitted wrongdoing as "temporary aberrations", in part explained by the "traumatic experience of a lengthy investigation and receivership". The Committee had before it a number of complaints of gross delay in dealing with client inquiries. However, it was inclined to ascribe the admitted wrongdoing and inattention to client interests to inefficiency rather than dishonesty: "The serious nature of the Solicitor's conduct is already apparent and needs no reiteration at this point. Suffice it to say that the running of his practice had become almost completely out of control and may indeed have done so had it not been for the appointment of an Investigator and, subsequently, a Receiver. The Solicitor's situation is one which is always likely to occur in a rapidly expanding single-man practice. The Solicitor's fault, looked at very broadly is simply that he allowed the pressure of his practice to dictate the manner in which he dealt with his clients' financial affairs. His manner of dealing with them has been quite appalling in its delay, broad-brush approach and lack of attention (almost permanently) to the tidying up of accounting matters and answering of correspondence". Counsel for the Society acknowledged before the Court: 1. That there was no challenge to the finding of the Committee that the solicitor was "fundamentally honest"; 2. That there was no instance of a deliberate attempt permanently to deprive a client of moneys owing to him or her. Instead, the conduct of the solicitor involved the unauthorized (and in some cases unlawful) use of client moneys to reimburse the solicitor temporarily for outgoings on disbursements connected with the litigation. Such deductions were later repaid to the client; 3. That following the activities of the inspector and receiver, the solicitor had reorganized his affairs and had adopted the procedures advised. The receiver had terminated his superintendence of the solicitor's accounts and withdrawn from the practice; and 4. That the practice was now being conducted properly, so far as the information available to the Society was concerned. In the light of these concessions, put very properly to the Court by counsel for the Society, and the obviously high opinion which the Committee reached concerning the solicitor's general integrity and honesty, his counsel urged that this Court should not disturb the findings of the specialist statutory committee. The Committee had had the opportunity of seeing the solicitor give evidence over 4 UNREPORTED JUDGMENTS several days. As its reasons of more than forty pages demonstrate, it paid a great deal of attention to the detailed complaints brought to it by the Society. However, it was the Society's contention that the Committee's process of reasoning was fundamentally flawed. It was so blinded by its estimation of the solicitor's general good character that it glossed over his admitted and clearly proved misconduct. In order to consider these competing arguments, it is useful to turn to a number of specific instances. The Callahan case Mr Michael Callahan suffered a major accident in June 1980. He consulted the solicitor. His action was heard in the Supreme Court. It resulted in a jury verdict for $450,000. The defendant was ordered to pay his costs. The solicitor submitted a statement of costs to the solicitors for the defendant. Meanwhile, the verdict moneys were received into the solicitor's trust account. On the same day, the solicitor drew out an amount of $16,000 for his profit costs. He paid Mr Callahan $430,000 as part-settlement moneys. He also paid a number of disbursements and later drew another $1,248.85 from the client's funds to his general account. The solicitor's assessment of costs included a claim for $16,000 profit costs. This was not accepted by the defendant. The solicitor was obliged to tax his costs. In February 1984, a certificate of taxation was issued in the sum of $10,086.97. That sum was received into the solicitor's trust account from the solicitors for the defendant in August 1984. It was thereafter transferred to his general account. It was only after the receiver was appointed that the total drawing of $27,330 for costs and the apparent non-payment of many disbursements was called to notice. Belatedly, the solicitor prepared a final settlement statement. Only then did he reimburse his client with $9,073.87. The Committee concluded: "On the basis of the Solicitor's evidence it is beyond doubt that the Solicitor's action in drawing the cheque amounted either to a deliberate misappropriation of trust funds or one brought about by a reckless disregard at the time of the drawing, of the state of accounts as between himself and his client. After very serious and prolonged consideration, with particular attention to the circumstances in which the Solicitor was placed at the time he drew the cheque, the pressure of work then upon him, the Committee is narrowly persuaded that the Solicitor's action comes within the latter category." The evidence of the solicitor referred to appears in the following passages of cross-examination: "Q: And you see you have transferred that $10,086.97 also to your general account? A: Yes. Q: So at that stage you had transferred to your general account $26,087.97? A: Yes. That last transfer was a mistake. It should not have been transferred. Q: By that stage you had certainly transferred to your general account much more than was the subject even of your bill to the defendant? A: Yes. Q: Can you tell us how you came to make that mistake? A: No. I don't know what happened there. Q: Did you seek Callaghan's (sic) instructions to withhold a particular figure? A: Yes. Q: What was the figure? A: $16,000. Q: Certainly, Mr Keefe, you did not have authority to make that final deduction of ten thousand-odd from your trust account? A: No. That was a major mistake. I have said that. UIRKE LAW SOCIETY OF NEW SOUTH WALES v KEEFE (Kirby P, Mahoney and Meaghes JJA) Q: When you drew that cheque from the trust account you knew how much money had been paid to you for costs already, didn't you? A: Yes. Q: This was an important, Mr Callaghan (sic); One that you were familiar with, and was extraordinary in the sense that it was a common law matter? A: Yes, of course. Q: And you were aware, were you not, that you had already paid yourself $16,000-odd? A: Yes, I was. Q: And you were aware that your bill to the other side was 22-odd thousand? A: Yes. Q: When you drew the cheque for $10,000-odd you knew the source of those moneys was the costs that had been paid from the other side? A: Yes. Q: You knew that you had paid those moneys to yourself by drawing that cheque you were drawing more than you were entitled to? A: It was a mistake, that is correct. Q: But you knew that you were drawing the cheque, Mr Keefe? A: Well, I suppose I must have." What is the conclusion to be drawn from this evidence? The Society suggests that it was that the solicitor had deliberately pocketed the taxed costs when they were paid, instead of reimbursing them to the client whose funds had been used to "cover" the solicitor during the period of taxation. The solicitor's concession that he knew he was drawing a cheque is not equivalent to a concession of dishonesty. The Committee preferred the conclusion that this was to be explained by the state of the solicitor's accounts. The Committee had the advantage of seeing the solicitor and forming its own view of his honesty in this regard. We would not disturb its conclusion on this point. The case of Grace This was a claim for workers' compensation and a related damages matter which the solicitor accepted as a legally aided case. The workers' compensation claim was settled in October 1982. A claim for a lump sum under s16 of the Workers' Compensation Act 1926 was settled in early February 1983. The damages matter was settled at a pretrial conference in March 1984. It seems that in about May 1984 the client changed his solicitor. The new solicitors made enquiries. These were ignored by the solicitor until the matter was drawn to the attention of the Society in February 1985. The complaint was that the solicitor knowingly drew his own costs from the settlement moneys, contrary to the provisions of the Legal Services Commission Act 1979, S42 (now the Legal Aid Commission Act). The solicitor said that this was a mistake caused by his then lack of understanding of the legal aid system. The Society attacks that excuse as not credible. Certainly, it is contrary to the contemporaneous correspondence between the solicitor and the then Legal Services Commission. As he admitted in evidence, on 30 May 1984 the solicitor had written a letter to the client in which he had acknowledged that his costs and disbursements were payable by that commission. Cross-examined on this transaction, the solicitor acknowledged "I was clearly at fault". He did not concede dishonesty but put his management of this case down to "incompetence". The Committee found that the solicitor took $2,750 for costs without any authorisation to do so from his client. A statement attached to a letter to the client of 30 May 1984 showed that in accordance with alleged instructions from the client he had paid out the client's debt of $1,337.50 to W Berkman Pty Ltd and had also paid the Legal Services Commission an amount of $1,507.19. This was 6 UNREPORTED JUDGMENTS the amount payable under the then Legal Services Commission Act. The solicitor then accounted to his client for the whole of the balance of the funds, namely $3,684.09. The complaint of the Society here was that the taking of costs, contrary to the provisions of the Act and the specific notification of those provisions by the Commission, should not have been found to be a "mistake". However, the Committee concluded: "[T]he problem basically was that partly because of the Solicitor's over commitment with his work and partly because of his inherent unpreparedness to deal with time-consuming financial adjustments and notwithstanding the serious problem which became plain on receipt of the Commission's demand of 27th June 1984, he simply made no real attempt to solve that problem until he was forced to do so when the Receiver was appointed. Even then it was not until February 1985 that the outstanding monies were paid out of the Solicitor's general account. Notwithstanding the appalling state of affairs indicated by the Solicitor's handling of this matter, the Committee is again of the view that the basic problem is as indicated above as distinct from a deliberately dishonest intent on the part of the Solicitor." The solicitor did not concede dishonesty. The Committee had the advantage of seeing him cross-examined on this point. We would not disturb its conclusion having regard to the principles which govern appellate review of such determinations. The case of Worrad The solicitor received instructions in this case in January 1981. The matter came to the attention of the Society because of a complaint by the client's wife, later withdrawn. This complaint drew attention to the solicitor's practice of drawing costs from workers' compensation award moneys and his delays in forwarding the award moneys to the client worker. The Committee concluded that the solicitor had no intention to disadvantage his client. It dealt with this case as "more than any other" illustrating the practice of the solicitor which had "caused this reference". The solicitor received a cheque for $12,000 from the solicitors for the insurer in December 1981. On the same day he transferred to his general account $2,500 for "costs and disbursements". He thereupon paid a barrister. A month later he paid Mr Worrad $8,000 being "part" of his award moneys. In February 1982 he received from the insurer a further cheque for workers' compensation made payable to the worker. A month later this too was sent to Mr Worrad. A balance then outstanding in the account was transferred to his general account. Subsequently, by four cheques between July 1982 and April 1983, the solicitor reimbursed Mr Worrad bringing his total credit to a sum equivalent to that which had been received as compensation. But the result was that the solicitor had the benefit of $2,500 of the client's compensation from December 1981. The client did not receive his full compensation until April 1983. In his declaration for the Committee, the solicitor claimed: "I had authority to deduct costs and disbursements in this matter. To the best of my knowledge a bill of costs was rendered..." But the Society charges that the deductions of costs were unauthorised and could not have been accompanied by any belief in an entitlement to make the deduction. When pressed in cross-examination about the deductions, the solicitor said: "I do not understand that. I cannot answer that. It does not make any sense." UIRKE LAW SOCIETY OF NEW SOUTH WALES v KEEFE (Kirby P, Mahoney and Meaghet JJA) The Society's suggestion is that the second transfer in May 1982 of a sum of $1,066.08 was completely unauthorized and part of a dishonest design to deprive Mr Worrad of part of his compensation moneys. The solicitor could not explain how the sum was transferred from his trust account (where it stood to the credit of the client) to his general account. It could not be explained as a sum on account of costs and disbursements for that sum had already been debited in December 1981. In cross-examination, all the solicitor could say was that it was "a mistake". The Society invited the Court to conclude that the transfer was dishonest. It was either a deliberate act designed to deprive the client of his moneys or an act recklessly careless with the client's moneys, not caring whether it was, or was not, a breach of the solicitor's duty as a trustee. Cf Romer J in re City Equitable Fire Insurance Co Limited [1925] 1 Ch 407. On this complaint, the Committee concluded that, quite apart from the gross delays in explaining his conduct (including to the Society), the problem presented by the requirements of the Workers' Compensation Act and his earlier undertaking to Moroney J, the amount of the deduction, when the second debit of $1,066.08 was made was "substantially in excess of the amount which on his own evidence he claims he would have been authorised to take". It concluded that there had been a breach of s41(1) of the Legal Practitioners' Act 1898. However, again the Committee was not convinced that there had been a deliberate wrong-doing by the solicitor: "Tt again indicates a carelessness between himself and his client but, on this occasion, in circumstances where he himself was the loser. In saying that the Committee is not overlooking or in any way condoning the excessive taking of costs in the first instance out of the award monies. However it does seem to the Committee that this case illustrates the lack of any deliberate dishonest intent on the part of the Solicitor in his muddled and dilatory dealing with the final accounting of his client's monies." The reference to being out of pocket is a reference to the fact that the solicitor made no attempt to follow up the claim for party and party costs for a period of well over two years after he had made the last payment to his client. Apparently the insulation provided by the deduction from the clients' moneys reduced the pressure to pursue those costs from the party liable in law to pay them. The Society is perfectly entitled to complain about the delays in the provision of a proper explanation by the solicitor concerning this "mistake". But having regard to his denial of dishonesty and to the advantages which the Committee had, we would not be disposed to disturb its conclusion that the explanation for what happened was muddled and shocking inefficiency rather than dishonesty. The case of Grozos In this case, the solicitor acted in third party proceedings for damages in a motor vehicle accident involving Mr Con Grozos. The matter was settled in the District Court in July 1984. An authority was taken from the client authorising the solicitor to settle at $25,000 inclusive of costs. The authority stated "I understand that I will receive a minimum of $18,000 clear to myself after deductions". On receipt of the judgment moneys of $22,987.90 (being the judgment less workers' compensation repayments) the solicitor immediately drew a cheque for $5,000 to his general account for costs. From this he paid counsel and an interpreter. This left a trust account balance of $15,577.90. On 20 September 1984 the solicitor paid $18,000 to the client, rebanking $2,422.10 in his trust account. 8 UNREPORTED JUDGMENTS The complaint here was that the deduction of $5,000 went beyond the client's authority which required that he receive a minimum of $18,000 clear. The solicitor acknowledged that the deduction for costs was "too much". That is why he made the reimbursement to his trust account. He admitted that the costs had simply not been worked out so that the client had not "authorised a specific figure". He had just deducted a round sum, but in doing so had gone beyond the specific authority of his client. The Committee concluded that there had here been a breach of S41(1) of the Legal Practitioners' Act. However, it also concluded that "in the circumstances" it did not "significantly prejudice his client's position". Nevertheless, the Committee acknowledged that, because of the limits of his authority, the solicitor was not authorised to deduct the round figure of $5,000 costs and then to "scratch around for a month by transferring moneys from his general account and thus provide the nett funds due to the client". The Society says that, because the solicitor's deduction was contrary to his specific instructions, it was "in that sense dishonest". Again, it appears to the Court that it was open to the Committee to conclude that this was a case of muddle and incompetence rather than of an intention to deprive the client dishonestly of his promised moneys. We would not disturb the finding of the Committee. The case of Owen A more serious case is that of Ms Betty Owen. She consulted the solicitor in 1982. A compensation claim was launched. An award of the then Workers' Compensation Commission was entered in her favour. Payment of the award moneys was, in due course, received by the solicitor from the solicitors for the employer. A cheque in the amount of $9,454.46 in favour of the client was forwarded by them and immediately banked by the solicitor in his trust account. The same day the solicitor transferred $4,030 of the award to his general account for ""W/c costs". A week later he paid counsel's fees. Only four days later still did he pay $5,000 to his client. Meanwhile, nine months later, the solicitor submitted a statement of costs to the solicitors for the employer. These totalled $5,211.85. After correspondence a bill of costs was prepared and taxed. Profit costs were allowed at $4,096.67 with disbursements making a total bill of $5,605.67. In March 1984, a further award was entered by the Compensation Commission for $2,400 under s16 of the Workers' Compensation Act. When a cheque was received by the solicitor in favour of the client, this sum was banked in the solicitor's trust account. The same day it was transferred to his general account for "costs and disbursements". There was no written authority from the client to transfer the amount in this way. In March 1984 the solicitor rendered a statement of costs to the employer's solicitors in respect of the section 16 case in the sum of $550. This was eventually reduced by agreement to $250. That sum was paid to the solicitor's trust account on 14 December 1984. On 19 December 1984 the amount was disbursed to his general account for costs. In June 1985, the workers' compensation redemption and common law damages settlement were achieved respectively in the Compensation Commission and the District Court. The cheque for $10,000 being the workers' compensation redemption was paid by the solicitor to Ms Owen directly. It was the receiver who discovered the errors in the management of this account. He found that the solicitor had twice breached S55 of the Workers' Compensation Act by banking workers' compensation award moneys, payable to UIRKE LAW SOCIETY OF NEW SOUTH WALES v KEEFE (Kirby P, Mahoney and Meagh&® JJA) the client worker into his own trust account. He had also twice breached S56(2) of the same Act by transferring costs for the workers' compensation cases from the award moneys without any authority to do so. Only on 16 August 1985, when the receiver commenced the investigation of the files of Ms Owen did the solicitor draw a cheque for $7,193.60 in favour of Ms Owen (for the moneys due for reimbursement for counsel's fees since paid) and also for $2,400 (being the S16 moneys retained by him on account of costs in July 1984). A curious feature of this case is that, as the solicitor later acknowledged to the receiver, he eventually received costs and disbursements in the first workers' compensation matter in the amount of $3,096.64 together with $2,500 being the common law settlement component of the settlement in June 1985. This cheque was banked into the solicitor's private account on 7 August 1985 instead of into his trust account (or even his practice general account). The solicitor was cross-examined about this action: "Q: Can you tell us how that came about? A: I should have put them into the trust account. Q: Can you tell us why you did not? A: I was just under a lot of pressure, that is all. I cannot give you any logical explanation for it. It was a very traumatic time. Q: You knew that the $2,500 was the amount of the judgment, did you not? A: Yes. Q: Because you had personally signed the terms of settlement? A: That is right. Q: Do you do all the depositing to your own bank account? A: Do I do it personally? Q: Yes. A: No, not all the time. Q: So far as filling out deposit slips? A: No, those transactions were done by me. It was not done by anyone else if that is what you are getting at. Q: You told me a moment ago that you were aware that the $2,500 was part of the judgment moneys. How did you come to deposit that to your bank account rather than your trust account? A: I have just answered that. Q: Just pressure? A: Yes, it was a very strange time. Things were not what they should be. Q: When you deposited that amount to your bank account you knew that was the wrong thing to do? A: Yes, I did. Q: It was not a matter of inadvertence on your part, was it? A: No. Q: Again, how did you come to do that? A: I've just explained it to you. It was very difficult sitting there years in the circumstances that I did sit there, very difficult to be logical about everything, very very difficult. Q: Accepting that for the moment, when the moneys came in you knew what they were for? You knew what it was for? A: I have already answered that. Q: You knew you had no entitlement to it? A: I have answered that. Q: What thought process if any did you engage in that led you to deposit it to your own bank account? A: I cannot add anything to what I have told you. There was not any thought process. Q: So you knowingly deposited those amounts to your own bank account and were aware that you had no entitlement to those moneys? A: Yes. It should be said at once that this is only one of two instances of such conduct which came to the attention of the Society, despite the very thorough activities of the investigator and the receiver. The Committee concluded: "As to Owen, the Committee has ultimately come to the conclusion that, although the Solicitor has admitted that his actions were "wrong", that does not necessarily constitute an 10 UNREPORTED JUDGMENTS admission of dishonesty. The Committee also considers that the whole of the evidence relating to Owen also does not necessarily establish dishonesty. The Committee reaches this conclusion particularly having regard to the solicitor's claims that he had suffered temporary aberrations and to have been subject to the traumatic experience of a lengthy investigation and receivership, and to have been entitled to practise only by virtue of a "deemed" Practising Certificate pursuant to S72 of the Act, with the ever-present possibility of disciplinary proceedings being taken against him under S76 of the Act. Indeed, the existence of such an aberration tends to be confirmed by the fact that the payments by the Solicitor to his private account were made at the height of the receivership, with little possibility of such payments not being unearthed sooner or later. The "wrong" of which the Solicitor was conscious when he gave his evidence was, in the judgment of the Committee, more likely to have been a reference to his broad-brush approach, his delay in finally accounting to his clients and his constant concern only with what ultimately would "come out in the wash" irrespective of the time that might elapse before the "wash" was complete. The payments to his private bank account, it is believed, should more appropriately be regarded as incidents of this pattern, than as those of a pattern of deliberately dishonest conduct, particularly in the light of the Solicitor's expenditure from his general account on behalf of his clients to which reference will shortly be made." The Society was very critical of this conclusion. It pointed to the concession of deliberate wrong doing on the part of the solicitor. We agree with the Society's criticisms of the Committee's conclusion in this regard. In the light of the concession made by the solicitor in cross-examination, it is plain that he knowingly and deliberately banked in his private account moneys belonging to his client. They were his client's verdict moneys. It is absolutely fundamental that such moneys should have been banked in his trust account. It was unlawful and wrongful for the solicitor not to so bank them and not to continue to deal with them as trust moneys. We will come in due course to consider the consequence of the different view which we have reached from the view reached by the Committee in the Owen case. The Papoutsis case Mr Papoutsis instructed the solicitor in December 1980. The original claim was against the Nominal Defendant. Subsequently, the Government Insurance Office of New South Wales was added as a second defendant. The matter was settled in the Supreme Court in December 1983 for $70,000, inclusive of costs. The Nominal Defendant and the Government Insurance Office agreed to share the judgment, each in the sum of $35,000. On 21 December 1983 the Government Insurance Office, on its own behalf and on behalf of the Nominal Defendant forwarded a cheque for $37,337.88 to the solicitor. This was the sum of $70,000 less social security repayments and hospital deductions. Later, in January 1984, as is now known by a mistake, the Government Insurance Office of New South Wales, on their own account, forwarded the solicitor a cheque for $35,000. This represented a double payment. The solicitor banked this cheque to his trust account on the same day, 23 January 1984. On 24 January 1984, the solicitor paid his client $28,000. A month later he sent a settlement statement to his client claiming $9,337.88 for "our costs and disbursements". UIRKE LAW SOCIETY OF NEW SOUTH WALES v KEEFE (Kirby P, Mahoney and Meaghtt JJA) On 29 February 1984, the solicitor wrote to the Nominal Defendant querying the payment of $35,000. He referred to the $37,337.88 which it already received as "settlement". Despite this letter, on 21 July 1984 a debit was made against the $35,000 resting in the trust account in the sum of $6,820. Later still, in August 1984 a further $1,038 was debited. These two debits appeared in the ledger as "costs and disbursements". They left $27,142 of the $35,000 double payment standing in credit in the trust account. The investigator drew this to attention. Although its source was explained by the double payment, the question remained upon what basis the solicitor had deducted from that account the two sums for costs. They were deducted without the authority of the client. The client's costs had already been paid. They represented sums which were not accounted for by way of an account itemising their amounts. They were also greater than the sum ($5,247.88) which had been claimed from the client against the judgment moneys originally received. In due course, the Government Insurance Office claimed a recoupment of the $35,000 paid by mistake. The solicitor on 19 September 1984 delivered a trust account cheque for $27,142 together with a general account cheque for $7,858. In his declaration, the solicitor conceded that what had occurred was "clearly a mistake". However, he was not able to explain how the mistake had come about. He could not explain why he had personally drawn the two cheques and deposited them in his general account. The Society submitted that he clearly did so deliberately, knowing that he had no claim at all to any part of the moneys so transferred. The Society argues that it is "highly unlikely" that the solicitor believed that the payments were for his costs. In cross-examination, the solicitor said: "Q: How did you come to fix upon the figure of $6,8207. A: I do not know. Q: When you drew that cheque you did not have any entitlement to those moneys, did you? A: Yes. Q: How did you come to draw it? A: I do not know. Q: On 8 August 1984 when you drew the cheque for $1,038, did that have anything to do with Mr Papoutsis' matter? A: No it does not make any sense. Q: That cheque was again drawn but by you personally? A: Yes. Q: Deposited by you personally in your own bank account? A: Yes. Q: How did you fix upon the amount of $1,038? A: I do not know. Q: Why did you debit that amount to this account? A: I do not know. Q: In both of those cases was it just a matter of you needed or you wanted some money and that was available? A: I do not know. It was obviously a mistake. Q: What sort of a mistake was it? A: It was a mistake. I should not have transferred that money. Q: When you drew each of the cheque you knew you were not entitled to any part of that money? A: It was clearly a mistake. Q: You knew in July 1984 that you were not entitled to the money? A: Yes, that is true. Q: You made a deliberate decision to debit those cheques to the Papoutsis account? A: Well I drew the cheques, of course. I have just indicated that." The Committee initially referred to this matter as "most serious". However, it concluded: "The Committee comes to the same conclusion in this matter as it has done in the matter of Owen, supported in this case also by the fact that the 12 UNREPORTED JUDGMENTS Solicitor recorded on the relevant bank deposit slips a reference to the Papoutsis matter to ensure that the money so deposited would be taken into account in the wash**"'. The Society attacks the Committee's finding as unsatisfactory. We agree. It is fundamental that a solicitor must not, without clear authority to do so, mix client funds with his own. It is equally obvious that where moneys have been paid by way of double-payment, they must be refunded immediately by a solicitor, acting honourably. There was absolutely no authority or warrant by a client or anyone else to deduct moneys for costs from the double-payment. The amounts of the deductions, the total absence of justification and the payment into the solicitor's own account all demonstrate wrong-doing. Moreover, the solicitor acknowledges that he had no authority to act as he did and could not explain it. We agree with the conclusion of the Committee that the solicitor's actions constituted a clear breach of S41(1) of the Legal Practitioners' Act. However, in the light of the concessions made by the solicitor it seems scarcely sufficient to conclude that his conduct amounted to a mistake or something that would "come out in the wash". The logic of the Committee's reasoning, not to say the acknowledgments of the solicitor himself, demonstrate that however atypical his behaviour, the solicitor was here acting deliberately and in a way that he must have known was wrong and unlawful. We will return in due course to state the consequence of this difference we have with the Committee's conclusion. We believe that we are authorised to come to a different view, although we did not see the solicitor give evidence, because our view is sustained by the solicitor's own admissions in cross-examination. The case of Tehfe Mr Tehfe retained the solicitor in December 1979. He claimed injuries as a pedestrian in a motor vehicle accident. The solicitor mounted a claim under s16 of the Workers' Compensation Act. This resulted in an award of the Compensation Commission for $5,040 in March 1980. When this sum was paid to the solicitor, he banked the amount in his trust account and paid $2,920 to Mr Tehfe. The balance was transferred to the account standing to the credit of Mr Tehfe in the third party proceedings. This was done on Mr Tehfe's signed authority. Ultimately, the third party proceedings were determined in the Supreme Court. An amount of $60,829.11 was paid to the solicitor for the client. This sum was banked in the solicitor's trust account. On 23 March 1983, the solicitor drew against this sum for his own costs and most disbursements. Allegedly, the solicitor did not notify the client of the receipt of the judgment moneys until later September 1983. He paid the client $45,000 on 10 October 1983. Mr Tehfe did not want to accept the judgment which had been entered in his favour in the Supreme Court. He wished to appeal. He refused to sign an authority for its payment to the solicitor. It was notwithstanding this lack of authority that, when the sum was paid, the solicitor proceeded to deduct his costs. When finally the client accepted the judgment the solicitor asked Mr Tehfe to sign an authority to receive the moneys which had long since already been received by him. The Society's complaints are twofold. First, it says that the solicitor was wrong, without specific authority, to deduct his costs from the moneys received into his trust account on account of the judgment. Secondly, by seeking the client's agreement to the authority to receive at the time when the moneys had already been received, the solicitor was falsely representing to his client that he had not earlier received the money and that he had gone along with UIRKE LAW SOCIETY OF NEW SOUTH WALES v KEEFE (Kirby P, Mahoney and Meaght$ JJA) the client's refusal to accept it. This he had done in order to conceal from the client the fact that he had not only received the moneys months earlier but had debited costs from them (without authority). In cross-examination the solicitor conceded that Mr Tehfe had stressed that he would not accept the judgment money, being desirous of appealing. Appeals were indeed mounted. The solicitor also acknowledged that Mr Tehfe had refused to sign the usual authority. When later the solicitor asked him to sign an authority, at that time, as the solicitor agreed, an authority was "superfluous", the money long since having been received. The solicitor's only explanation for this course was that he had an implied authority, when the money was received, to deduct from them his costs and disbursements. How such an "implied" authority could exist in the face of the express instruction not to receive the money was never satisfactorily explained. There was a serious lack of candour here in the dealings between the solicitor and his client. The Committee found that in respect of the Tehfe case, that the solicitor was in breach of S41(1) of the Legal Practitioners' Act in respect of his deduction of costs and disbursements. It concluded: "[A]n implied authority could not possibly exist in respect of a fund of money the totality of which the client was rejecting. In other words the fund simply was not the client's fund in respect of which any authority to deduct costs could apply; indeed, the client was unaware at the time that the fund had been received into the Solicitor's trust account." Nevertheless the Committee concluded that, by requiring his client later to sign an authority, the solicitor was "not making any false representations" to his client. The Society complains that this finding cannot be reconciled with the solicitor's agreement that the moneys were received contrary to the client's instructions and that securing an authority was "superfluous". The Society argues that the presentation of the authority could only have been designed to conceal the truth from the client. We are not inclined to disturb the Committee's finding on this point. It is possible that the authority was secured unthinkingly, simply as a matter of routine. Certainly it was not required, the moneys having already been received. Had the solicitor explained to his client that the receipt of the judgment moneys did not prejudice his appeal rights, and had he then secured express instructions to debit an amount to cover his outlays for costs, no breach of his duties as a solicitor would have occurred. The Committee's finding of a breach of the Act is sustained. But the suggestion that there was a false representation to Mr Tehfe in the sense of a deliberate untruth, designed to mislead him, was not established to the satisfaction of the Committee. We do not believe that in this matter we are authorised to substitute a contrary opinion for that which the Committee reached. Deduction in workers' compensation cases A number of the cases already mentioned have illustrated the practice of the solicitor to deduct his costs from workers' compensation payments made to the clients through his trust account. From the earliest days of statutory workers' compensation in this State (and other jurisdictions) provisions have been enacted to protect the recipient of compensation from deductions from benefits of costs and other charges. The clear object of the legislation is to protect the compensation fund of injured workers. The relevant provisions of S55 and S56 of the Workers' Compensation Act 1926 are: 14 UNREPORTED JUDGMENTS "55(1) A weekly payment, or a sum paid by way of redemption thereof, or a lump sum payable under this Act, shall not be capable of being assigned, charged, or attached, and shall not pass to any other person by operation of law, nor shall any claim be set off against the same. (2) Subs(1) has no effect to the extent to which, but for this subsection, it would operate to prevent the satisfaction of an obligation by the worker to maintain another person pursuant to an order of a court of competent jurisdiction. 56(1) Any sum awarded as compensation shall, unless paid into the Board under this Act, be paid on the receipt of the person to whom it is payable under any agreement, award, or order. (2) The solicitor or agent of a person claiming compensation under this Act shall not be entitled to recover from him any costs in respect of any proceedings under this Act (including proceedings on appeal to the Court), or to claim a lien in respect of such costs on, or deduct such costs from, the sum awarded, ordered or agreed as compensation, except such sum as may be awarded by the Court. (3) The award may be made on the application either of the person claiming compensation, or of his solicitor or agent, to determine the amount of costs to be paid to the solicitor or agent. (4) Any sum so awarded shall be subject to taxation by the Registrar and to the scale of costs prescribed by the rules of Court." The "court" referred to is the Compensation Court. Save for the addition of s55(2), and for the substitution of the Board and Court respectively for the Commission, the sections have been unchanged for decades. They establish a special provision governing the relationship between solicitors and their clients in proceedings involving the payment of workers' compensation. Those provisions are well known and, as the Court believes, well understood by practitioners involved in compensation cases. As the Committee found, the solicitor adopted a general practice of deducting costs from workers' compensation moneys. He claimed that in all cases he had an oral authority to do so. Where a client refused such authority, he would not make the deduction. He claimed that the purpose of the deduction was simply to put himself back in funds for the sums which he had already expended, out of his own pocket, for disbursements in connection with the litigation. In due course, when costs were taxed, he would reimburse the clients for the amounts so deducted in their entirety. Even if the costs were not recovered, or not fully recovered, from the employer, he would reimburse the client completely once costs were recovered, whether after agreement or taxation. In short, the practice was one designed to tide the solicitor over for a time, reducing the outlays from his general account. It was not intended to, and did not have the effect of, reducing the ultimate payment to the client of the compensation moneys. The solicitor claimed that he had acted honestly. He gave evidence that he considered that there was a degree of "elasticity" in the Act, authorising him to deduct such costs as "an interim measure". Four considerations were put forward to justify this opinion: 1. The first was a sense of morality that, as the solicitor had funded the litigation for a time, it was only fair that the clients (if they agreed) should fund it temporarily out of the compensation moneys once recovered. The solicitor put this point in his declaration: "Tn that it is suggested that there was a financial gain to be made by me in respect of the deduction of costs and/or disbursements from the Award I do not agree that this is the case. With the type of practice which I conduct and which UIRKE LAW SOCIETY OF NEW SOUTH WALES v KEEFE (Kirby P, Mahoney and Meaghts JJA) involves acting for people with little or no resources, I have expended considerable amounts of my money in payment of disbursements for clients during the conduct of matters which amounts would only be refunded to me on the completion of proceedings or upon receipt of any cheque in payment of an Award. In other words, I fund the client's case at considerable financial hardship to myself. I consider that morally and ethically I should be entitled to my costs and disbursements at the conclusion of the case. In many compensation cases (not involving common law) it is often many months and sometimes years if a bill has to be taxed before costs and disbursements are paid. Should matters involving workers compensation and common law be settled at common law then costs and disbursements can be deducted from the settlement. I have always held the view that s56(2) of the Workers Compensation Act is somewhat equivocal in its interpretation in that the costs which are referred to have always, in my view, been considered to be additional costs over and above the costs and disbursements recovered from the insurer or Respondent." There are a number of answers to these contentions. First, a solicitor is an officer of the law. His duty is to comply with the law. If the Act is plain (as it seems to the Court to be) no amount of moral and ethical entitlement will enable a solicitor to ignore its provisions. Nor is it true to say that the solicitor is not receiving a "financial gain" by the deduction of costs. The financial gain he receives, beyond that which the Act allows, is securing funds earlier and otherwise than the Act provides, out of the compensation payable to the injured worker. If the solicitor is not prepared (or able) to act for worker clients upon the basis that the Act lays down, he should turn to other work where the stringent requirements of the Act do not apply. There is no support in the terms of the Act for the suggestion that S56(2) is addressed to "additional costs over and above the costs and disbursements recoverable". There is no hint in the language of the section of such a narrow application. It talks of costs. Nothing else in the Act would warrant a reading down of that word so that it should refer only to solicitor and client costs. 2. It was then said that observations by Moroney J in Eleid v FJ Sobb Pty Ltd supported the solicitor's view that the section was so limited. The solicitor made this assertion in his declaration. Eleid was the very case in which Moroney J on 27 April 1983 indicated his view that the solicitor was in "technical breach" of S55 of the Workers' Compensation Act. His Honour's remarks have been placed before this Court. There is nothing in them to sustain an honest opinion that the routine practice of the solicitor was warranted by the Act or the sanction of the then Workers' Compensation Commission. To the contrary, Moroney J referred not to a breach of S55 but of S56. He described the matter as a "warning signal". He expressed his concern about the practice which had sprung up, where common law proceedings were taken on behalf of the worker yet the matter was still before the Commission. Specifically, he expressed concern about abuse of the system by way of charges to workers. He claimed that such "abuse" had "caused considerable havoc and brought criticism upon the legal profession some years ago". Nothing in Moroney J's remarks supports an opinion that the practice of the solicitor here described was sanctioned by his Honour. 3. Then it was claimed that a question of construction arises as to whether "compensation" is $56(2) of the Workers' Compensation Act includes moneys paid by way of redemption or whether such moneys are outside the scheme of S56(2). Attention is drawn to the suggested contrast between the specific mention of "a sum paid by way of redemption" in S55 and the omission of that reference 16 UNREPORTED JUDGMENTS in S56. There are many answers to this argument. In a number of cases in which the practice of the solicitor was followed, there was no s15 redemption component at all. The practice was a universal one, not confined by the solicitor only to cases involving an S15 redemption achieved in conjunction with common law settlement. Whether or not "compensation" includes compensation by way of redemption (as the Court thinks it does) has little significance in this case. For whether the compensation moneys were for redemption or weekly payments, the solicitor's practice was unchanged. He simply advanced himself, out of those moneys, the costs. He deducted such costs from the sum awarded. He did so without any specific award authorising that deduction. Therefore, on his own admission in the cases of deduction from weekly payments (and by the Act, in all of the cases) the solicitor was in clear breach of the section. It is important to observe that the solicitor himself did not originally claim a differentiation between redemption and other cases. This was a differentiation suggested by his counsel, after the proceedings had commenced before the Statutory Committee. Therefore, when examining the solicitor's honesty and sense of propriety in acting as he did (as distinct from its pure lawfulness) it is essential to judge his conduct by reference to his then belief as to the propriety of his actions. It is unnecessary for the Court to elaborate at length the meaning of S55 and S56 of the 1926 Act. That Act has now been repealed. The equivalent provision in the new Act is slightly different and should await elaboration in a case where that is necessary. 4. Finally, the solicitor contended that he was acting honestly on his understanding of a decision of the Solicitors' Statutory Committee in respect of the practice of another solicitor engaged in compensation cases, Mr May. He acknowledged that he did not actually peruse the decision of the Committee. He said that he had been trying for "the last couple of years" to get copy of it. He claimed that he had "heard on the grapevine" about it and believed that it sanctioned, as lawful, the practice which he had adopted. He said that he had endeavoured to get advice from counsel and at one time received oral advice that his practice was lawful. The Committee concluded that there was no basis which would support any legal argument that the solicitor's practice was otherwise than "totally prohibited" by S56. Nor did the Committee believe that the section was in any way equivocal. It acknowledged that in some respects the operation of $56(2) had been considered by some commentators to be controversial. Reference was made to items published in the Law Society Journal in 1983 and 1986. Ultimately, the Committee concluded: "(T]he Solicitor certainly knew that there was a problem about the section, made no real attempt to form a lawyer-like view of the meaning of the section and relied on the combined effect of the authority of his client and the state of confusion which he knew existed to justify his action if it should be challenged. In other words, the Solicitor's belief that he was justified in deducting the costs was more in the nature of a rationalisation than a positive belief but it was a belief which the Solicitor nevertheless held and the Committee does not go so far as to reject the Solicitor's evidence to this effect." Because there was no justifiable basis whatever for the solicitor's view, the Committee found that the solicitor's conduct in deducting costs in the seventeen non-redemption cases amounted to professional misconduct. We agree with this view. UIRKE LAW SOCIETY OF NEW SOUTH WALES v KEEFE (Kirby P, Mahoney and Meaght#t JJA) The Society attacks the Committee's conclusion. It contends that the evidence sustains but one conclusion, namely that the solicitor had no bona fide belief that he was complying with the statute. In cross-examination, the solicitor made various admissions, damaging to himself, that he knew that solicitors could not charge costs in workers' compensation matters. In the course of that cross-examination, the Society produced an affidavit which the solicitor claimed he had forgotten about. It was an affidavit of 3 May 1983 filed in the Workers' Compensation Commission following the remarks of Judge Moroney in the Eleid case. It was in this affidavit that the solicitor accepted his Honour's findings that "there had been a technical breach of s55 (sic) of the Workers' Compensation Act'. Actually, his Honour had referred to S56 of the Act. The solicitor went on: "T accept his Honour's findings in that regard. I indicate to this court that I sincerely apologise for this breach. In my defence, however, I do refer to my earlier affidavit in which in substance I am saying that the real situation was that the costs were in relation to the Supreme Court proceedings and not the Workers' Compensation proceedings. I undertake that there will be no breaches of this S55 of the Workers' Compensation Act in the future." Perhaps significantly, the affidavit originally read "in the near future" but "near" was deleted. The memory of the solicitor of the remarks of Moroney J and of his undertaking was lamentably imperfect. Within a very short time of giving the undertaking, he was proceeding with the very conduct which had been called to notice by Moroney J. Nevertheless, the Committee saw the solicitor and heard him give evidence on which he was closely and efficiently tested. It did not conclude that he was wilfully and dishonestly deducting costs in breach of the Workers' Compensation Act. The Committee accepted that he held the belief that he was justified in deducting costs. Whilst this is not a conclusion to which we would have come on the evidence as it appears in the transcript placed before the Court, we must acknowledge that, by conventional theory, the Committee had considerable advantages which this Court has not enjoyed. It is plain from remarks elsewhere in the Committee's reasons that it paid very close attention to the solicitor and observed him closely "in the witness box for several days on end". It formed the view that he was "an essentially honest person", something the Society does not contest before this Court. In the circumstances of the warning by Moroney J, the solicitor's conduct was all the more reprehensible, especially as that warning had procured the affidavit undertaking which he so quickly forgot. Nevertheless, we would not be inclined to disturb the Committee's findings as to the state of mind of the solicitor when he made the deductions which he did. The appropriate response to proved misconduct The result of this analysis is that in all but two respects, the findings of the Committee are not disturbed by this Court. The two cases where we have reached an opinion different to the Committee are those of Ms Owen and Mr Papoutsis. We defer to the Committee's assessment of the solicitor's honesty of belief and of conduct in the other cases because of the conclusion which we have reached that the Committee's opinions in those cases were necessarily (and in some cases expressly stated to be) formed on the basis of the Committee's close observation of the testimony of the solicitor before them. We are authorised to reach a different opinion in the cases of Ms Owen and Mr Papoutsis because, in those cases, the uncontroverted evidence of the solicitor himself, by his answers in cross-examination, acknowledge conscious wrong-doing. Moreover, in those 18 UNREPORTED JUDGMENTS cases, the action of crediting his own personal account with client funds is so fundamentally and obviously inconsistent with the duty of a solicitor as to make consciousness of the wrong-doing perfectly obvious to him. What therefore is to be done? The Committee's opinion was that the maximum fine of $10,000 should be imposed as a mark of disapprobation of the solicitor's found breaches of the Legal Practitioners' Act and proved professional misconduct and as a warning to others. But that conclusion was reached without the findings, inherent in the opinion which we have formed about the Owen and Papoutsis cases, of conscious wrong-doing on the part of the solicitor. Should the Court for that reason, or because it considers the fine imposed by the Committee to be inadequate or inappropriate in any case, substitute an order removing the name of the solicitor from the roll of solicitors? We have given much thought to that course. There is much force in the searching and painstaking submissions placed before the Court by counsel for the Society. At times during argument we were inclined to agree with his submission. In the result, however, we have drawn back from that conclusion. We have done so essentially for the following reasons: 1. The purpose of the jurisdiction exercised by the Committee, and on appeal by the Court, is not the punishment of the solicitor, as such. It is the protection of the public from persons who are shown by their proved conduct to be unfit to enjoy the privileges and responsibilities of a legal practitioner. Incorporated Law Institute of New South Wales v Meagher (1909) 9 CLR 555, 663; Harvey v Law Society of New South Wales (1975) 7 ALR 227, 230. Necessarily, an order removing a solicitor from the roll has a devastating effect on the life, reputation and livelihood of that solicitor. But disciplinary orders must be fashioned with the primary protective objective of the jurisdiction in mind. 2. The Court must pay close account to the opinion and assessment of the practitioner by the speciality professional body. They have the opportunity of seeing the practitioner. They provide a form of "peer review" and measure the conduct complained of against the current standards of the profession as reflected in the opinions of the members of the Committee, the majority of whom are senior and experienced practitioners. The participation of a lay member ensures that the corrective of lay opinion is added to that of the members of the legal profession. The deference shown to the opinion and assessment of the Committee has been expressed in many cases. See eg Mahoney JA's observations in The Law Society of New South Wales v McNamara, Court of Appeal, unreported, 7 March 1980. 3. Although we have formed the view, contrary to that of the Committee, that the solicitor's conduct in banking client funds in his personal account in the cases of Ms Owen and Mr Papoutsis was consciously wrongful, like the Committee, we are inclined to accept his explanation. This was that at the time he was under the very great pressure of the investigation and subsequent receivership of his practice. In a rational man, realization of that fact would have redoubled his efforts to act lawfully and properly. His actions in those cases were bound to come to light in the investigation. They are the actions of an irrational person under stress. That they are isolated saves the solicitor from the consequences which would otherwise necessarily flow from the conclusion which the Court has reached, based upon the solicitor's own admissions. 4. Then there are the concessions of the Society referred to in the opening of these reasons. It accepted that the solicitor is (as the Committee found) an "essentially honest person". It is also accepted that he has worked diligently in UIRKE LAW SOCIETY OF NEW SOUTH WALES v KEEFE (Kirby P, Mahoney and Meaght9 JJA) a sphere of practice where his attention to his clients, though not always efficient, has been appreciated by many. No client ultimately lost funds as a result of the practices or found professional misconduct of the solicitor. Even his practice of deducting costs from workers' compensation payments, although undoubtedly wrong and unlawful, was designed simply to recoup the disbursements he had actually paid. This does not make the practice any the more lawful or the deductions excusable. But it must be kept in mind in determining whether his name must be removed from the roll in order to protect the public from him following these proceedings. 5. The principal source of both the particular and general complaints which brought the solicitor before the Committee was a shocking lack of attention by the solicitor to the tedious but essential finalisation of the financial consequences of the conclusion of litigation in which he was engaged. His actions, as the Committee found, were "muddled and dilatory" rather than "deliberately dishonest". In general, we agree with this conclusion. As a result of the investigation and the appointment of a receiver, the solicitor's practice is now operating with sufficient propriety and efficiency that the receiver, appointed by the Society, has withdrawn. His withdrawal must be taken to have been approved by the Society. This is yet another indication that the investigation may at last have had the salutary effect that was necessary to jolt the solicitor into closer attention to his professional and legal obligations. In our opinion, the imposition of a fine is not an adequate response to the proved misconduct and found breaches of the Legal Practitioners' Act set out in the findings of the Committee and revised in these reasons. A suspension of the solicitor for a time would not appear appropriate having regard to the limited circumstances in which an order of suspension is appropriate. See discussion Ziems v The Prothonotary of the Supreme Court of New South Wales (1956-7) 97 CLR 279, 29G; McNamara (above); Re Mack; ex Parte the NSW Bar Association (1968) 88 WN (NSW) (Pt 1) 68; cf The Prothonotary v Richard, Court of Appeal, unreported, 10 April 1987. We have given consideration to whether it is necessary, for the protection of the public, that the solicitor should surrender his unqualified practising certificate and be limited for a specified period to practising as an employed solicitor. Because the solicitor is a sole practitioner, this would cause a significant disruption of his practice and doubtless inconvenience to clients. It would not have a commensurate benefit either in protecting the public or in establishing the standards which the Court insists upon. We do not believe that, for the protection of the public, such a course is now required. Nonetheless, we do consider that it is appropriate to require a sanction which goes beyond the penalty of a fine which the Committee imposed. We reach this view, both because of the more serious view we take of the cases of Owen and Papoutsis, than that taken by the Committee and because we recognise that the orders of the Court, in a case such as the present, not only dispose of the present appeal but reflect the standards which the Court establishes for the conduct of solicitors generally. There should be no doubt in the mind of Mr Keefe or of any other solicitor in the future that the Court will expect faithful observance of the provisions of S122 of the Workers' Compensation Act 1987 (the successor to S56(2)-(4) of the 1926 Act). Parliament has provided this form of protection precisely because of the vulnerability of many workers to unreasonable and improper charges levied on their compensation moneys. The need of many to 20 UNREPORTED JUDGMENTS operate through interpreters and in an unfamiliar culture and legal system adds to that vulnerability. Future breaches of $122 of the 1987 Act will be regarded most seriously by the Court. There is no reason to believe that the solicitor will offend again. These proceedings will at least have had that salutary effect. However, as a further security against repetition and to ensure that the lesson has been fully learned, the Court considers that undertakings should be given to it by the solicitor. This course was adopted by the Court in The Law Society of New South Wales v Morgan-Jones, Court of Appeal, unreported, 18 August 1983. See also In re Nicholas Vadasz, Full Court, Supreme Court of South Australia, 6 October 1988. By his counsel, the solicitor indicated to the Court that he would proffer any undertakings which the Court considered necessary. We consider that the undertakings set out in the schedule to this judgment are necessary in the circumstances and as a response to the Court of its duty to safeguard the public dealing with the solicitor. Orders and conclusions The result is that the orders which we would propose are: 1. Upon the solicitor giving to the Court the undertakings set out in the schedule to this judgment, order that the appeal herein be dismissed; and 2. As the appeal was properly brought, the respondent should pay the appellant Society's costs of the appeal. SCHEDULE UNDERTAKING 1. That, for a period of 2 years from the date of this undertaking, the solicitor will, at his own expense, retain a person nominated by the President of the Law Society of New South Wales, and with knowledge of the judgment of the Court and the reasons and orders of the Statutory Committee, to carry out 6 monthly inspections of his practice, including, but not limited to, inspections of his trust account records. 2. That the solicitor will authorise the person who carries out each such inspection to provide from time to time, and as required by the President of the Law Society of New South Wales, a written report of the inspection to the President of the Law Society setting out the results of the inspection and the person's opinion as to whether the solicitor: (a) has complied with the requirements of the Legal Profession Act 1987 and the Legal Profession (Trust Accounts and Controlled Money) Regulation 1988; (b) has provided proper accounting to clients within reasonable time after the completion of matters; and (c) has complied with the Workers' Compensation Act 1987. Counsel for Appellant: PW Taylor with JM Orchiston Solicitors for Appellant: P MacDougal Counsel for Respondent: PW Neil with L Delaney Solicitors for Respondent: I Genge