LAW SOCIETY OF NEW SOUTH WALES v BANNISTER SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL GLEESON CJ, HANDLEY and SHELLER JJA 20 July 1993, 27 August 1993 [1993] NSWCA 157 The respondent Solicitor acted on a redemption application to the Compensation Court. An award of $43,000 was made to the client. The Solicitor asked the client to pay $3,000 by way of costs, knowing that he was not so entitled. The Solicitor caused the redemption cheque to be endorsed by the client and paid into his firm's trust account and then drew cheques for $40,000 and $3,000 in favour of the client. The $3,000 cheque was cashed and the proceeds given to the Solicitor who appropriated the money to his own purposes. The Solicitor later claimed costs from the client's employer; this was not revealed to the client. The matter was not made known to the Law Society until police, acting on a complaint from the employer, drew the matter to its attention. The Legal Profession Disciplinary Tribunal made a finding of professional misconduct and imposed a fine of $10,000. The Law Society appealed, claiming that the Tribunal had erred in finding that the Solicitor was fit to continue to practise, although the Society had not urged that his name be removed from the roll before the Tribunal. Held: The Solicitor's conduct showed him to be unfit to practise; protection of the public required that his name be removed from the roll. Gleeson CJ I have had the advantage of reading in draft form the judgment of Sheller JA. I agree with the orders proposed by his Honour and with his reasons for those orders. Handley JA I agree with Sheller JA. Sheller JA This is an appeal by the Law Society of New South Wales (the Law Society) pursuant to s164 of the Legal Profession Act 1987 (the Act) from a determination of the Legal Profession Disciplinary Tribunal made on 18 October 1990 after a hearing into an amended complaint made under s135 of the Act and dated 20 December 1989 against the respondent solicitor, Francis William Bannister (the Solicitor). The complaint in its original form was dated 31 January 1989. BACKGROUND FACTS The Solicitor was born on 25 May 1949 and was accordingly forty one at the date of the determination and is now forty four. After working with the Department of Attorney General and Justice in the Magistrates' Court Administration and with the Public Solicitor in Newcastle he joined Bruce O'Sullivan and Co as a law clerk in 1980 and following his admission as a solicitor on 12 June 1981 he became a partner on 21 September 1981. He has since remained a partner in that firm. His partners at the time of the conduct complained of and thereafter until 30 June 1992 were Peter Raymond Hartley, Stephen Ross Gill and David Geoffrey Parke. The partnership was dissolved with effect from 30 June 1992 when Mr Parke commenced practice on his own account. There is nothing to suggest that the proceedings against the Solicitor were the cause of Mr Parke's leaving the partnership The Solicitor's three partners all gave evidence on his behalf. The Solicitor practised predominantly in common law matters including a small percentage of workers' compensation matters. 2 UNREPORTED JUDGMENTS FACTS GIVING RISE TO COMPLAINT In 1986 the Solicitor acted for Mr Trevor William Bunn (the client) on an application to the Compensation Court for redemption of weekly payments of compensation. On 4 December 1986 Judge Thompson by consent made an award in favour of the client for $43,000 The award provided for the applicant employer, the Newcastle City Council (the Council), to pay the client's costs "forthwith after they had been agreed or taxed". In a statutory declaration made on 16 March 1990 the Solicitor said that on the morning of the hearing he informed the client in reply to his question about the amount of costs that they would be $3,000. He said that the client agreed to this amount "The position was one in which an appreciative client appeared as if he both expected to have to pay costs and was willing to do so." $56(2) of the Workers Compensation Act 1926 provided that the solicitor of a person claiming compensation under the Act was not entitled to recover from him any costs of any proceedings under the Act or to deduct such costs from the sum awarded, ordered or agreed as compensation except such sum as might be awarded by the court. On 22 December | 986 the Solicitor received from the Council's solicitors a cheque drawn in favour of the client for $43,000. A solicitor, who had practised extensively in the workers' compensation area almost exclusively for applicants in disputed claims for compensation, gave unchallenged evidence that, in the circumstances described, this cheque should have been forwarded to the client. Instead on 24 December 1986 the Solicitor had the client endorse the cheque to make it payable to Bruce O'Sullivan and Co and caused it to be paid into the firm's trust account. He then had the client sign authorisations for the drawing of two cheques on the trust account both in favour of the client, one for $40,000 and the other for $3,000. The Solicitor accompanied the client to the firm's bank where the $3,000 cheque was cashed and the proceeds handed to the Solicitor. Asked in cross examination why he accompanied the client to the bank the Solicitor said: "I believe that may have been in case he had any difficulty in negotiating the cheque". In his statutory declaration the Solicitor said: "My decision to ask him to pay me in cash was I think something that was initially prompted by the fact that the office was closing at noon for Christmas and I was going to be away for six weeks or so. However, part of the reason for my asking for payment in cash was also because I realise that if the costs was paid simply by way of transfer from the trust account there was a risk that my partners might notice it and would query the payment. To avoid that risk I asked Mr Bunn if he would be prepared to pay the $3,000 in cash." The Solicitor appropriated the $3,000 for his own purposes. The Solicitor caused entries to be made in the trust account ledger of the firm recording the payment of both the cheques for $40,000 and $3,000 to the client and failed to make any entry recording the receipt or retention of $3,000 by him as costs or otherwise. $42(2) of the Legal Practitioners Act 1898 required every solicitor to keep accounts of all moneys received by him and required to be dealt with as trust moneys in accordance with the provisions of s41(1) in such manner as to disclose the true position in regard thereto, and to enable the accounts to be conveniently and properly audited. The day before the visit to the bank the Solicitor had written to the Council's solicitors assessing the firm's costs at $500 which was later, after negotiation, reduced to $350. This amount together with $539 disbursements by way of counsel's fees was paid to Bruce O' Sullivan and Co by the Council's solicitors on 6 February 1987. The receipt of this amount on account of costs was not revealed to the client. URJ LAW SOCIETY OF NEW SOUTH WALES v BANNISTER (Sheller JA) 3 Subject to one minor matter, the Solicitor, by his counsel, conceded before the Tribunal the basic facts as set out in detailed particulars to the complaint. The one matter was that in respect of the second ground of complaint the Law Society alleged that the Solicitor represented to the client that, of the $43,000 payable by the employer pursuant to the award, an amount of $3,000 was payable by the client to the Solicitor for the costs of the Solicitor. According to the Solicitor he "did not positively misrepresent to Mr Bunn at any stage that the amount of $43,000 provided for in the redemption order included $3,000 for costs". The Solicitor was asked the following questions and gave the following answers in cross examination: "Q. And you say that you agree that you asked Mr Bunn to pay $3,000 by way of costs? Yes In fact the $3,000 did not relate to costs at all? Not costs that I could justify. Do you accept in relation to that $3,000 that you misled Mr Bunn? In the fact that they were justifiable costs, yes. Were they costs at all? They certainly could not be costs under the Act, no. In relation to the $3,000 do you accept at all that you misled Mr Bunn? He was certainly misled as to the payment of costs, yes. Did the $3,000 represent in any character costs? . I concede that I told Mr Bunn that they were costs, but I also concede that they certainly could not have been costs within the meaning of the Act. Q. Whether within the meaning of the Act or otherwise, could they bear the character of costs in your view? A. As a charge for services done I suppose I could say that I did say to Mr Bunn that they were costs, but I concede that I could not justify them as costs." COMPLAINT The amended complaint dated 20 December 1989 was divided into four heads: 1. Wilful failure to comply with the provisions of s42(2) of the Legal Practitioners Act 1898, in respect of the client. 2. Between December 1986 and February 1987 wilfully misleading the client as to (a) the entitlements of the client as to costs under an award made in his favour by the Compensation Court on 4 December 1986; (b) the entitlements of the Solicitor to costs for acting on behalf of the client in respect of that award; (c) the arrangements by which the Solicitor might receive moneys for costs for acting on behalf of the client in respect of the award. 3. In breach of s56(2) of the Workers Compensation Act 1926, and contrary to the practice of solicitors of good fame and character on or about 24 December 1986 retaining an amount of $3,000 purportedly for his costs from moneys paid by the Council pursuant to an award of $43,000 made by the Compensation Court to the client on 4 December 1986. 4. On or about 24 December 1986 retaining (from moneys payable to the client pursuant to the award of $43,000) an amount of $3,000 for costs to which the Solicitor was not entitled under the award. >POPO>OPO>O> 4 UNREPORTED JUDGMENTS It is unnecessary to set out the particulars of the amended complaint. They are covered by the facts I have set out. These facts are not disputed. The Solicitor conceded that he failed to explain to the client between December 1986 and February 1987: (i) that the lump sum of $43,000 awarded by the Court to the client was exclusive of costs; (ii) that the Court's award provided for the payment of the client's costs by the employer as 'agreed or taxed'; (iii) that the costs of the client had been neither agreed nor taxed pursuant to the award at the time when on or about 24 December 1986 the Solicitor retained $3,000 of the client's lump sum as costs. During the hearing before the Tribunal counsel for the Solicitor conceded that the conduct particularised amounted to professional misconduct and conceded that this misconduct was sufficiently serious to call into question his fitness to practise. Before the original complaint was made the solicitors then acting for the respondent, in answer to a complaint concerning "an alleged failure to observe s56(2) of the Workers Compensation Act 1926", wrote on 11 November 1988 to the President of the Law Society as follows: "There is a big difference, we submit, between Mr Bannister's conduct and the common law concept of professional misconduct, no matter how that concept is defined. There has, we submit, been no grave impropriety or dishonesty which are frequent characteristics of professional misconduct. Neither, we submit, has there been any conduct which would be reasonably regarded as disgraceful or dishonourable by Mr Bannister's professional brethren of good repute and competency. The conduct may have been unsatisfactory and unacceptable but it would be putting it too high to describe it as disgraceful or dishonourable. It is somewhat analogous to an isolated complaint of overcharging; that we submit, has never been regarded as professional misconduct. " Later by letter dated 29 March 1989 dealing with the complaint in its original form which raised by way of particulars the Solicitor's causing the cheque for $43,000 to be credited to the firm's trust account, the drawing of two trust account cheques in favour of the client and the cashing of the cheque for $3,000 and receipt by the Solicitor of the $3,000 cash the solicitors wrote: "The subject matter of the complaint arose out of proceedings relating to a redemption lump sum payable pursuant to s15 of the Workers Compensation Act and an alleged breach of s56(2) of the same Act. The alleged breach is said to have constituted professional misconduct... Since breach of s56(2) is the only ground particularised in the complaint against our client it is our submission that, in the light of the decision in Keefe, the complaint would be dismissed if it proceeded to a hearing. " It was of course after this that the complaint was amended to the form it took at the hearing before the Tribunal. FINDINGS The Tribunal found that the Solicitor took advantage of the client's ignorance as to his entitlement and led him to believe that the costs to which the Solicitor was entitled amounted to $3,000. This was done at a time when the Solicitor was negotiating with the Council's solicitors as to the quantum of the costs of the application to be paid by the Council. Further the drawing of the funds was wilfully shown in the Solicitor's firm's trust account ledger in a manner which concealed the real destination of the $3,000. The Tribunal found that the URJ LAW SOCIETY OF NEW SOUTH WALES v BANNISTER (Sheller JA) 5 Solicitor's conduct was undoubtedly premeditated. Some twenty days had elapsed between the Solicitor's advice as to the amount of the costs and the date of payment. The Tribunal said the Solicitor's conduct must be viewed more seriously still when it was realised, as the Solicitor admitted, that the taking of the $3,000 in cash, under the guise of costs, was concealed from his partners and the funds were kept by the Solicitor for his own purposes and were not paid into the partnership bank account. The Tribunal said: "His conduct was both dishonest and deceitful." The Tribunal recited the following passage from the Solicitor's statutory declaration: "The only explanation that I can give for this, and I recognise that it provides no justification whatever, is that I was conscious of the fact that my section of the practice had been bringing in over half the firm's gross income, whereas the Partnership Agreement provided for a splitting of net profits in 4 equal shares. I appreciate that this is a form of rationalisation which does me no credit but I feel it necessary to express it as indicating something of my thought processes at the time. I do not proffer it as any kind of justification but I consider it is something to be taken into account in understanding my personal thoughts at the time." The Tribunal continued by saying that there had been no satisfactory explanation whatsoever for the conduct complained of and there was not one redeeming feature in its favour. It was not until after the police had intervened on a complaint by the Council in late 1987 and drawn the matter to the Law Society's attention that in June 1988 the sum of $3,000 was refunded to the client. No interest was offered to compensate the client for being without the $3,000 for some eighteen months. The sum of $1,026.30 as interest was not paid to the client until 20 April 1990 after the failure to pay interest drew adverse comment from the Tribunal at the hearing. It was against the background of this behaviour that the Tribunal had to consider the Solicitor's fitness to practise and the delay in making good did not assist the Solicitor in his case that his behaviour was an isolated aberration: the isolation became somewhat extended. The Tribunal went on to say that where misconduct is established the task for a professional tribunal is to determine whether it indicates unfitness or is more properly to be treated as an isolated or passing departure from proper professional standards amounting to something less than proved unfitness. It said that it appreciated the commonsense of the Solicitor's concessions, even though as to matters the proof of which was inevitable, and believed the Solicitor in his declaration and in his oral evidence, when he indicated his contrition, his having learnt from his misdeed and his concern for the standing of his profession. Reference was made to the independent evidence as to the character of the Solicitor from a fairly representative cross section of the community including members of both branches of the legal profession. Particular reference was made to the character references from the Solicitor's three partners. The Tribunal then went on to say: "These impressive references have reinforced the Tribunal's considered opinion (after carefully observing his behaviour in the witness box) that the Solicitor is fit to continue in practice and that cancellation or suspension of his practising certificate is neither necessary nor appropriate to protect the interests of the public. This opinion is also reinforced by the length of time the Solicitor has been in practice the absence of any previous complaints and no subsequent complaints having been brought forward at the hearing. The Tribunal's members were initially divided in their opinions as to this, the minority view being in 6 UNREPORTED JUDGMENTS favour of a protective order, and it was only after reconsideration of all aspects of the conduct and all the character and other evidence that unanimity was reached in the Tribunal's orders. Some three and a half years have passed since the behaviour complained of and, clearly dishonest and deceitful though it was, the Tribunal believes the Solicitor has learnt his lesson. The Tribunal finds the four grounds proved (and also notes the Solicitor's concessions as to these). Accordingly the Tribunal formally finds professional misconduct in relation to each of the four grounds and considers that, in all the circumstances, such misconduct should attract a heavy pecuniary penalty. " The Tribunal imposed a fine of Ten Thousand Dollars ($10,000) to be paid within one month from the date of the order. APPEAL In its grounds of appeal filed on 13 November 1990 the Law Society claimed, amongst other things, that the Tribunal had erred in finding that the Solicitor was fit to continue to practise as a solicitor of the Supreme Court of New South Wales and sought an order that his name be removed from the roll of solicitors of the Court. This approach is different from that taken by counsel for the Law Society at the hearing before the Tribunal and I shall return to say something about this. NATURE OF THE APPEAL S164(4) of the Act provides that the appeal shall be by way of a new hearing and fresh evidence, or evidence in addition to or in substitution for the evidence received at the original hearing, may be given. Argument during the hearing of the appeal was directed to the orders made by the Tribunal. The only further evidence adduced, apart from a covering affidavit, consisted of: ¢ an affidavit by the Solicitor stating that he had continued to practice in partnership with Messrs Hartley and Gill, that he had personally apologised to the client, that the judgment of the Tribunal had been given considerable publicity and that a number of subsequent and similar complaints had been dismissed by the Law Society; the Solicitor also said that the complaints and proceedings had been extremely distressing to him both professionally and personally but that he felt having gone through the ordeal he had reinforced in himself the importance of maintaining the highest standards in relation to the conduct of his practice. "I have endeavoured to maintain these high standards since the Disciplinary Tribunal Proceedings and I will ensure that the conduct, the subject of these proceedings, will never occur again." ¢ affidavits by those character witnesses who were still available and who re affirmed their earlier evidence. None of these deponents was cross examined. In coming to its conclusion as stated in the passage which I have quoted the Tribunal took account of the observed behaviour of the Solicitor in the witness box. We have not had that advantage. Indeed neither side challenged the Tribunal's findings of fact. Thus the appeal proceeded upon the basis that, accepting these findings, the orders the Tribunal made were inappropriate. The Solicitor's name should have been removed from the roll. Because the appeal is a new hearing we are entitled to form our own view of the matter and prefer it to that of the Tribunal; compare Re Hodgekiss (1962) SR (NSW) 340 at 343. We are not restricted to intervening only where there is demonstrated error or where the order is shown to be manifestly insupportable. We must of course take account of the expertise of the two solicitor members of the Tribunal and the fact that the third member is a lay member representative of wider public opinion. We must also take account of the fact that the Tribunal saw the Solicitor in the witness box. No other witness gave oral evidence. URJ LAW SOCIETY OF NEW SOUTH WALES v BANNISTER (Sheller JA) 7 THE PROPER APPROACH It is sometimes said that the jurisdiction of the Tribunal and of this Court invoked by complaint against a solicitor is not to punish the solicitor but to protect the public. In New South Wales Bar Association v Evatt (1968) 117 CLR 177 at 183 to 184 the Court referred to Clyne v New South Wales Bar Association (1960) 104 CLR 186 at 201 to 202 and said: "The power of the Court to discipline a barrister is, however, entirely protective, and, notwithstanding that its exercise may involve a great deprivation to the person disciplined, there is no element of punishment involved." However the distinction between the two stated objectives of protection and punishment is blurred and can be misleading. Obviously where a barrister or a solicitor has been convicted and punished for a serious offence the jurisdiction of the court to disbar the barrister or remove the name of the solicitor from the roll can be said to have nothing to do with punishment; see Ziems v the Prothonotary (1957) 97 CLR 279 at 286. In Ex parte Brounsall (1778) 2 Cowp 829, 98 ER 1385 a solicitor had been convicted of stealing a guinea and had suffered imprisonment for nine months and also branding on the hand. On an application to strike him off the roll and in answer to an argument advanced on the solicitor's behalf that he had already received sufficient punishment, Lord Mansfield at 830 and 1385 said that the defendant's having been burnt in the hand was no objection to his being struck off the roll. "And it is on this principle; that he is an unfit person to practise as an attorney. It is not by way of punishment; but the Court on such cases exercise their discretion, whether a man whom they have formally admitted, is a proper person to be continued on the roll or not." See also Incorporated Law Institute of New South Wales v Meagher (1909) 9 CLR 655 at 680. Such cases illustrate that the supervisory jurisdiction of the Court and of statutory bodies such as the Tribunal is directed in part to ensuring that the requirement enshrined in the Charter of Justice that persons admitted to practise as solicitors be fit and proper persons or, in the language of s16 of the Legal Profession Act 1987, of good fame and character is maintained. It follows that if a solicitor is shown not to be a fit and proper person he or she should be removed from the roll. The order for removal is not punitive but protective. Accordingly it is no answer for the solicitor to say that he or she has already been punished for the conduct which shows unfitness. But the supervisory jurisdiction of the Court and the Tribunal is also directed to protecting the public more generally by maintaining and encouraging appropriate standards of professional behaviour. In Myers v Elman [1940] AC 282 at 319 Lord Wright speaking of this jurisdiction said: "The underlying principle is that the Court has a right and a duty to supervise the conduct of its solicitors, and visit with penalties any conduct of a solicitor which is of such a nature as to tend to defeat justice in the very cause in which he is engaged professionally, as was said by Abinger CB in Stephens v Hill (1842) 10 M and W 28; 152 ER 368. The matter complained of need not be criminal. It need not involve peculation or dishonesty. A mere mistake or error of judgment is not generally sufficient, but a gross neglect or inaccuracy in a matter which it is a solicitor's duty to ascertain with accuracy may suffice.. It is impossible to enumerate the various contingencies which may call into operation the exercise of this jurisdiction. It need not involve personal obliquity. The term professional misconduct has often been used to describe the ground on which the Court acts. It would perhaps be more accurate to describe it as conduct which involves a failure on the part of a solicitor to fulfil his duty to the Court and to realise his duty to aid in promoting in his own sphere the cause of justice." 8 UNREPORTED JUDGMENTS His Lordship went on to describe the jurisdiction as not merely punitive but compensatory, which, in England, is the way in which the jurisdiction is still regarded. See, for example, R and T Thew Ltd v Reeves (No 2) [1982] 1 QB 1283 at 1285. In Ex parte Macaulay (1930) 30 SR (NSW) 193 at 1934 Street CJ speaking for himself and the other members of the Full Court said: "... unless the Court insists on a high standard of conduct on the part of solicitors - unless the Court punishes severely any lapse from the proper standard - the public will never be properly safeguarded and the profession will never retain the respect which it ought to have in the community. " In Re Hodgekiss at 343 Owen J referred to the Statutory Committee's being given wide powers, including the power to strike the names of offenders from the roll, "(f) or the purposes of punishing members of the profession who fail to maintain proper standards of honour and honesty and of protecting members of the public." These statements need to be understood as applicable within the context of a protective jurisdiction. By way of illustration retribution, a purpose of criminal punishment, is no part of the Court's purpose in making an order against a solicitor in the exercise of its supervisory jurisdiction. The exercise of the power to remove from the roll, suspend or fine a solicitor is directed to protecting the public by ensuring that those unfit to practise do not continue to hold themselves out as fit to practise and that high standards are maintained. The maintenance of such standards involves deterring the offender from repeating the offence and deterring others who might be tempted to offend. I understood Mr Hughes QC, who appeared for the Solicitor, to concede that the element of deterrence is involved in the exercise of the supervisory jurisdiction. When the jurisdiction of the Tribunal is invoked under Pt10 Division 7 of the Act to conduct a hearing into a complaint of professional misconduct by a legal practitioner, the primary consideration is to protect the public by preventing a person unfit to practise from holding himself or herself out to the public as a legal practitioner in whom members of the public might repose confidence. But the Tribunal must also act so as to deter the offender in the future and any other practitioner minded to behave in like manner. In the case of a solicitor these elements together or separately may call for the removal of the solicitor's name from the roll or the imposition of a substantial fine. Subjective considerations which would mitigate the sentence imposed by a criminal court may be significant if the protective exercise being undertaken by the Tribunal requires that they be taken into account. For example a solicitor who reports his misconduct to the Law Society immediately may be treated differently from one who does not, simply to encourage solicitors guilty of misconduct promptly to report it. On the whole, however, mitigating circumstances are of considerably less significance than in the criminal sentencing process. In Johns v Law Society of New South Wales (1982) 2 NSWLR | at 9 to 10, Moffitt P said that where there is misconduct prima facie requiring at some time past a striking off order on the basis of then unfitness, the substance of the question whether a strike off order should be made when the matter comes for decision some years later is not dissimilar to the question arising upon an application for re admission, namely whether it appears that there is material before the court to lead it to conclude that the last proved unfitness had been changed to fitness. But even so in allowing a solicitor to continue to practise where he has been shown in the past to be unfit to do so the court is giving, as was pointed out by Willes J in Re Poole (1869) LR 4 CP 350 at 353, the sanction of the court for saying that, prima facie at least, the Solicitor is worthy to stand URJ LAW SOCIETY OF NEW SOUTH WALES v BANNISTER (Sheller JA) 9 in the ranks of an honourable profession to whose members people ignorant and otherwise might resort for assistance in the conduct and management of their affairs and in whom they are in the habit of reposing unbounded confidence. The normal consequence of the misappropriation by a solicitor of a client's money is that his name be removed from the roll. In Ex parte Macaulay at 194 Street CJ said that where a solicitor had been proved guilty of theft he should not, unless in very exceptional circumstances, ever be allowed again to be held out to the public as a solicitor in whom confidence might be reposed; compare Ex parte Lenehan (1948)77 CLR 403 at 422. This is not only to protect the public in need of assistance in managing their affairs from reposing confidence in the person concerned on the basis that he is a solicitor but also to deter others from behaving in the same way in the future. THE PRESENT CASE The present is not a case of a solicitor who on the spur of the moment misappropriated his client's money and then within a short time, overcome by remorse, made good the misappropriation. Further if the Solicitor's name remains on the roll it is open to him to practise on his own account without the checks and controls ordinarily provided by partners. To understand the gravity of what here occurred I put aside consideration of the contravention of s56(2) of the Workers Compensation Act and s42(2) of the Legal Practitioners Act. Those contraventions apart the essential seriousness of the Solicitor's conduct is demonstrated by the following matters: 1. The relationship of solicitor and client which involves on the one side a duty to protect the interest of the client and on the other the reposing of confidence and trust in the solicitor. 2. The receipt by the Solicitor of a cheque for $43,000 which belonged to the client and which it was the Solicitor's duty to hand to him. 3. The Solicitor's claiming from that amount $3,000 for his costs. 4. The Solicitor's knowing that the amount of $3,000 could not be justified as costs but taking advantage of the client's ignorance to lead him to believe that the Solicitor was entitled to this amount for his costs. 5. The Solicitor's contemporaneously making a separate claim for costs from the Council's solicitors, a claim which he did not reveal to the client. 6. The Solicitor's causing false entries to be made in the trust account ledger to conceal from his partners what he knew to be his wrongful dealing with the client's money. 7. To the same end the Solicitor's causing a cheque for $3,000 to be drawn in favour of the client and causing the client to have the cheque cashed and the proceeds paid to the Solicitor. 8. The Solicitor's misappropriating the proceeds, as he said in evidence, in cash so that they would not go into the partnership account. 9. An absence of any change of heart. The defalcation would not have been revealed but for the Council's complaint to the police. 10. When the defalcation came to light, the Solicitor's failing to take any steps to repay the amount misappropriated for six months and even then making no allowance for interest. I have no doubt whatever that the conduct I have summarised showed the Solicitor to be unfit to practise. I find it difficult to see how the Tribunal could have come to any other conclusion. In their reasons the Tribunal said, and I agree: "There has been no satisfactory explanation whatsoever for the conduct 10 UNREPORTED JUDGMENTS complained of and there is not one redeeming feature in its favour". The Solicitor's conduct was driven not by need or hardship but by greed. The Tribunal saw its task as to determine whether the misconduct indicated unfitness or was more properly to be treated as an isolated or passing departure from proper professional standards amounting to something less than proved unfitness. It was conceded that the Solicitor had engaged in a course of dishonest and deceitful conduct which extended over a period of more than a year and which, in its inception and throughout this period, was deliberate and done in full knowledge of its wrongfulness, eloquently evidenced by its concealment. The Tribunal accepted the Solicitor's evidence that he had learnt a lesson from the events that led to the matter coming before it. However the Solicitor was not ignorant of the wrongfulness of his acts nor did he misunderstand their nature. He made no confession of his misconduct to the Law Society prior to its coming to light or promptly thereafter. Whatever may have been the instructions given or the reasons for the letters written by his solicitors on 11 November 1988 and 29 March 1989 their terms are no indication that the Solicitor was prepared to acknowledge the seriousness of what he had done. The Tribunal referred to the character evidence presented on behalf of the Solicitor. His three partners all supported him and have kept him in the partnership which is some evidence that they are satisfied that he will not repeat this conduct. This evidence seems to me somewhat tarnished by the fact that the partners had become aware of the Solicitor's conduct by December 1987 and yet allowed the client to remain out of his money until June 1988. The senior partner, Mr Hartley, in his statutory declaration said: "8. The matter, the subject of these proceedings, first came to my notice when I was spoken to by Police Officers who contacted me and thereafter attended at my office to inspect documents relating to the matter. 9. I had a discussion with Mr Bannister at that time and he conveyed to me what appeared to be a full and frank disclosure of the factual matters which now appear in the documentation in support of the Complaint. 10. I made a thorough examination of the documentation. All documentation which might be relevant to the matter was where it should be. I placed some significance on that as it was apparent that no action had been taken by Mr Bannister to cover the trail by extraction or alteration of records which, quite clearly, show what occurred. 11. I placed a great deal of importance on that as it was an indication to me as it was then and remains an indication to me that the incident, the subject of the Complaint, was an isolated instance and in no way indicative of any pattern or course of conduct. 12. The partners were most concerned that this firm, through one of its partners, was involved with the conduct complained of, relating to the carrying out of duties of a solicitor in dealing with a member of the public. 13. No action was taken immediately we became aware of the matter to rectify the situation as, in our view, the matter was then the subject of a Police investigation and, thereafter, investigation by the Law Society. 14. Upon completion of the Police investigation advice was received in relation to the current proceedings and immediately thereafter I contacted Mr Bunn and delivered to him a cheque for the sum of $3,000, drawn on our office Trading Account and debited as drawings by Mr Bannister." URJ LAW SOCIETY OF NEW SOUTH WALES v BANNISTER (Sheller JA) 11 The delay in repaying the client may have resulted from a desire not to jeopardise any defence the Solicitor might have had if he were prosecuted. Nevertheless I find Mr Hartley's account neither convincing nor satisfactory. However, surprisingly, Mr Hartley was asked no questions about it. The rest of the character evidence is of slight relevance to proceedings of this sort. It confirms the Solicitor's evidence that he had not previously engaged in dishonest, deceitful or other improper conduct. There is evidence of the stress and pain suffered not only by himself but by his family and his partners and his expressed sorrow for occasioning this. Opinions are expressed that the conduct is out of character and isolated and will not happen again and that the Solicitor is contrite. Any family member, friend or associate who had observed a previously blameless life might expect and certainly hope that demonstrated dishonesty and deceit was out of character or isolated and would not be repeated. But absent some acceptable explanation of how greed and opportunity led the Solicitor carefully to plan a course of action which he knew was dishonest and deceitful, character evidence is not particularly helpful to a court or tribunal in determining whether it can be confident that there will not be a repetition. In the course of his submissions Mr Hughes referred us to the passage in the majority judgment in Ex parte Lenehan at 422. "The duty of the court is to determine in what manner the court should exercise its discretion in the particular circumstances of each case. Generalizations relating to questions of character and moral fitness, such as the statement quoted from Ex parte Macaulay (1930) 30 SR (NSW) 193 should not be treated as it they were propositions of law. The two cases of Ex parte Macaulay ((supra) and one case unreported (6 March 1935)) properly emphasize the great importance of financial integrity in a solicitor, but they should not be regarded as laying down a rule of law that a who has been struck off the roll for pecuniary dishonesty cannot be reinstated and that an applicant for admission who has been guilty of a similar act cannot be allowed to proceed unless it is shown that there were some exceptional circumstances in the original offence. " However later in the same judgment (at 424) their Honours described that case as being one "in which this Court ought to give effect to the view that the adverse conclusions that might otherwise be drawn from an unsatisfactory beginning may be displaced by a completely satisfactory subsequent career sustained over a lengthy period of time. " Pending the hearing in the Tribunal the Solicitor did not repeat his misconduct. It would be surprising if he had. But neither the length of the period of reform nor the conduct of the Solicitor during that period, bearing in mind the delay in confession and repayment, was comparable to the period and behaviour of the solicitor before the Court in Lenehan's Case. In my opinion there was no material before the Tribunal which allowed it to do otherwise than order that the Solicitor's name be removed from the roll. WHAT COURSE THE COURT SHOULD TAKE? In my opinion the Court should now make the order that the Tribunal should have made. Two particular matters have concerned me. In the first place more than six years have now passed since the misappropriation of the money, four years since it was returned and nearly three since the determination of the Tribunal. During that period the Solicitor has continued in practice. The second is the attitude of the Law Society. On more than one occasion during submissions to the Tribunal its counsel indicated that the Law Society left it to the Tribunal to decide whether the Solicitor was unfit and whether or not his name should be 12 UNREPORTED JUDGMENTS removed from the roll. At no stage did counsel urge or even suggest that on the evidence the Tribunal was bound to order that the Solicitor's name be removed from the roll. Accordingly it seems surprising that the Law Society should now argue that the Tribunal erred in adopting a choice that the Law Society left open to it at the hearing. The explanation we were given for this was "a change of policy". In ordinary criminal or civil proceedings this change of attitude would have particular significance in determining what course we should now follow. However since, in my opinion, protection of the public in the manner I have described required that the Solicitor's name be removed from the roll I accept that, whatever attitude was taken by the Law Society at the hearing before the Tribunal, it acted correctly in prosecuting this appeal. The Law Society's changed attitude should however have been reflected in an application at least for expedition and possibly for some sort of interim order. It is no light matter that a professional body should allow somebody whom it regards as unfit to practise to continue to practise while an appeal takes its normal course unexpedited. Even taking account of the fact that a further period of nearly three years has passed since the Tribunal's determination I remain of the opinion that the appropriate order now to be made is that the Solicitor's name be removed from the roll. To adopt the language of Handley JA in Dupal v The Law Society of New South Wales (unreported) 26 April 1990 at 20, the favourable aspects demonstrated by the character evidence cannot possibly obliterate the sad but fundamental fact that the Solicitor misappropriated the funds of the client and deceived the client and his partners. Like his Honour in that case I do not think the Court in this case could possibly be satisfied at this stage that the Solicitor's candour and contrition are any more than a virtue borne of present necessity and the inevitability of close scrutiny. I reiterate that this is not the case of a solicitor who on the spur of the moment misappropriated his client's money and then within a short time, overcome by remorse, made good the misappropriation. This is a case of premeditated and carefully planned misappropriation. The Solicitor's conscience was unmoved until the misappropriation was revealed by a police investigation and even then not moved immediately to make good the defalcation to the client. As Handley JA said at 22 to 23: "Any decision to the contrary would signal to the profession and the community that this Court was no longer insisting on solicitors maintaining the highest standards of personal honesty and integrity in their dealings with clients and the public and in the handling of moneys entrusted to their charge.. Sympathy for the (Solicitor) and for the tragedy that he has brought on himself and his family by his inability to live up to the high standards which this Court and the profession demand of solicitors cannot be allowed to deflect this Court from doing its duty." In my opinion the appeal should be allowed and O.1 and O.2 of the Tribunal set aside. In lieu thereof it should be ordered that the name of the Solicitor be removed from the roll of solicitors. I would assume that in consequence of the setting aside of the first order made by the Tribunal the amount of the fine, if paid, would be repaid to the Solicitor 0.3 and O.4 of the Tribunal relating to costs before it should be confirmed. The costs of the appeal present an unusual problem in that although the appeal has been successful the need for it may well have resulted from the stance taken by the Law Society before the Tribunal. Bearing this in mind and in all the circumstances I think it appropriate that there be no order for costs of the appeal with the intent that each party should pay its or his own. I propose the following orders: URJ LAW SOCIETY OF NEW SOUTH WALES v BANNISTER (Sheller JA) 13 1. Appeal allowed; 2. Set aside O.1 and O.2 of the Legal Profession Disciplinary Tribunal of 18 October 1990; 3. In lieu thereof order that the name of Francis William Bannister be removed 5 from the roll of solicitors; 4. Confirm O.3 and O.4 made by the Tribunal; 5. No order as to the costs of this appeal. 6. Liberty to the respondent to apply to the Court for further order if the fine of $10,000 imposed by the Tribunal has been paid and is not repaid to the 10 Solicitor within twenty one (21) days hereof. 1. 2. Aas Appeal allowed; Set aside O.1 and O.2 of the Legal Profession Disciplinary Tribunal of 18 October 1990, In lieu thereof order that the name of Francis William Bannister be removed from the roll of solicitors; Confirm O.3 and O.4 made by the Tribunal; No orders as to the costs of this appeal; Liberty to the respondent to apply to the Court for further order if the fine of $10,000 imposed by the Tribunal has been paid and is not repaid to the Solicitor within twenty one (21) days hereof. Counsel for the Appellant: DP Hipsley Instructed by: Frederick Smith Counsel for the Respondent: TEF Hughes QC/PW Taylor Instructed by: Borthwick Wilson Smith and Bates