SEDGWICK v LAW SOCIETY OF NEW SOUTH WALES SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL KIRBY P, MAHONEY and MEAGHER JJA 8 April 1994, 18 May 1994 [1994] NSWCA 282 LEGAL PRACTITIONERS — solicitor — professional misconduct — removal of name from Roll — appeal — sole practitioner in country town — admitted wrongdoing — neglect and deception of clients — misuse of funds — held: Name removed from Roll. LEGAL PRACTITIONERS — professional misconduct — appeal — nature of appeal by way of "new hearing" — requirements of procedural fairness — reference of fact-finding to single judge — when permissible. APPEAL — new hearing — nature of proceedings on appeal to Supreme Court from quasi judicial tribunal. LEGAL PRACTITIONERS — solicitor — sole practitioner in country town — disciplinary tribunal orders removal of name from Roll of Solicitors — appeal to Court of Appeal — reference to single judge — judge's findings of fact received by Court of Appeal — solicitor admits that he acted wrongly — false delays in prosecution of client's litigation — use of client's funds and lack of frankness to client and Legal Aid Commission — held: (1) In considering a charge of professional misconduct against a sole practitioner in a country town, the Court should take into account the practical circumstances in which the solicitor practised as such; (2) With reluctance and because of the conceded wrongdoing, the order removing the solicitor's name from the Roll was correct and the appeal should be dismissed; (3) Without expressing a concluded view, the prospect of restoration of the solicitor's name after a proper time was not excluded. LEGAL PRACTITIONERS — solicitors disciplinary tribunal — appeal to Court of Appeal from — reference to single judge for findings of fact — report to Court of Appeal by single judge — proper procedures — reference by Mahoney JA (Kirby P and Meagher JA concurring): (1) The nature of an "appeal" by way of new hearing Turnbull vy New South Wales Medical Board [1976] 2 NSWLR 281 (CA) and Workers' Compensation (Dust Diseases) Board v Veksans (1993) 32 NSWLR 221 (CA) considered; (2) The duty to act with procedural fairness in the appeal and to avoid determining the matter upon complaints of misconduct not formally before the Court of Appeal. Smith v New South Wales Bar Association (1992) 176 CLR 256; Bannister vy Walton (1993) 30 NSWLR 699 (CA) applied; (3) Use made and appropriate circumstances for reference of fact-finding to a single judge. APPEAL — appeal from quasi judicial tribunal — appeal by way of "new hearing" — nature of appeal. WORDS & PHRASES — "appeal" — "new hearing" Legal Profession Act 1987, s164, s171F Kirby P I agree with Mahoney JA. 2 UNREPORTED JUDGMENTS Mahoney JA Shaw McNeil Sedgwick has practised as a solicitor since about 1969. Complaints were made against them. The Disciplinary Tribunal found some but not all of the complaints established. On 1 February 1992 it ordered that his name be removed from the Roll of Solicitors. Mr Sedgwick has appealed to this Court against that order. I am unfortunately of the opinion that the Tribunal's order should be confirmed. I have considered Mr Sedgwick's position carefully and with some sympathy: to this I shall refer subsequently. He has referred to and I am conscious of the difficulties inherent in the position of a sole practitioner in a country town. Mr Sedgwick has offered his apology for those things which he accepts that he has done wrong. But, in the end, I feel I should come to the conclusion that it is not proper that he be allowed to continue to practise. I am loath to add to the considerable body of material already involved in the proceedings against Mr Sedgwick. This Court alone has before it six substantial volumes of material and in addition it has written submissions and other matters. However, the practice of this Court has been to record the essential facts by reference to which an order for removal from the Roll is made: it may be necessary to refer to what the Court has done if subsequently an application for readmission is made. In addition, there are in this case aspects of the appeal which require to be noted. 1. THE MANNER IN WHICH THE APPEAL COMES BEFORE THE COURT: On 18 June 1991 complaints were made to the Disciplinary Tribunal under the Legal Profession Act 1987 by the Law Society of New South Wales. On 11 and 12 December 1991 the Tribunal held a hearing to investigate the complaints. On 1 February 1992 the Tribunal ordered that Mr Sedgwick's name be removed from the Roll of Solicitors. Mr Sedgwick appealed to the Supreme Court pursuant to s164 of the Legal Profession Act 1987. The appeal has proceeded upon the basis that it is governed by s164 and that it is not affected by the amendments made by Act No 87 of 1993. (The terms of one of the relevant sections, s171F, enacted by the 1993 Act, appear relevantly similar to s164). As far as is here relevant, s164 provides: "164(1). Any party to a hearing conducted by the Tribunal may appeal to the Supreme Court against the Tribunal's determination of a complaint. (4). An 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." It is necessary to consider the procedure which may and should be followed by this Court under that section. The proceeding is by s164 described as "an appeal". It is, however, an appeal from a body which is not a court: the Disciplinary Tribunal is, I think, a quasi judicial tribunal. The term "appeal" may denote proceedings of a number of different kinds: see, eg, the collection of some of the meanings of the term in Turnbull v New South Wales Medical Board (1976) 2 NSWLR 281 at 297-8 and the discussion by Kirby P in Workers Compensation (Dust Diseases) Board v Veksans (1993) 32 NSWLR 221 at 228-232. In my opinion, s164(4) indicates the appeal ("a new hearing") is of its nature a proceeding in the original jurisdiction of the Supreme Court but brought as on URJ SEDGWICK v LAW SOCIETY OF NEW SOUTH WALES (Mahoney JA) 3 "an appeal" from a quasi judicial body. Insofar as it may be necessary to do so, the incidents of the appeal may be inferred from its nature as such. The appeal is, to adapt the language of Glass JA in Turnbull v New South Wales Medical Board, "'a hearing do novo" in which "all the issues must be retried. The party succeeding below enjoys no advantage, and must, if he can, win the case a second time". It is, in this sense, different from an appeal "by way of rehearing", ie, an appeal on the evidence given below: cf Supreme Court Act 1970, s75A. But this does not mean that, though a proceeding in the original jurisdiction of the Supreme Court, it is completely divorced from the proceedings in the Tribunal. It is of its nature an appeal from the decision of the Tribunal and, in that sense, is different from a proceeding in the court's original jurisdiction which has no relevant connection with a previous proceeding or decision. This is, I think, of relevance in deciding what the Court can and should do in relation, inter alia, to the complaints before it and the evidence on which they are to be determined. The Act does not provide in terms whether the complaints which may be dealt with by the Supreme Court on such an appeal are limited to the complaints which were determined by the Tribunal or whether other complaints may be added for the purposes of the appeal. Thus, it might be argued that the procedure in this Court is of its nature an appeal "against the Tribunal's determination of a complaint": s164(1); and accordingly that the Supreme Court may deal only with such complaints as were the subject of a determination by the Tribunal. In the present case, as I shall indicate, further complaints have been formulated by the Law Society, have been dealt with by the parties in evidence, and have been the subject of submissions before this Court. It does not appear to have been suggested that it was not open to this Court to deal with such further complaints: at least, it has not been so suggested in the argument before this Court. In my opinion, it was not the intention of the legislature, in enacting the Legal Profession Act 1987 or in formulating the form of the appeal to the Supreme Court, to exclude consideration by the Supreme Court of further or other complaints. It is my understanding of the former practice of this Court in dealing with disciplinary matters on appeal from the predecessors of the present Tribunal that complaints were brought before the Court which were not laid or dealt with before the professional tribunal. The Supreme Court would, of course, and will, in determining whether such complaints should be dealt with on an appeal, have regard to the requirements of due procedure and what in fairness should be done. It would and will, in determining such a matter, take into account such objection as might be made by the person complained of. But the 1987 Act preserved "the jurisdiction of the Supreme Court with respect to the discipline of barristers and solicitors (other than solicitor corporations)": s125 of the 1987 Act. If further complaints were required to be made and the Court could not deal with them strictly within the terms of an appeal under s164, the Court could of course entertain the complaints in the exercise of its inherent jurisdiction to discipline solicitors and could, subject to appropriate safeguards, deal with the appeal and the further complaints at the same time. Provided appropriate safeguards are maintained, in my opinion no useful purpose would be served by construing the Act as limiting the appeal to complaints determined by the Disciplinary Tribunal. The orders which may be made under the inherent jurisdiction - at least as far as is relevant in this case - do not differ from those which may be made under the statutory jurisdiction. And I see no reason why a practitioner may not, to save costs or otherwise, consent to an exercise of the Court's jurisdiction in this way. 4 UNREPORTED JUDGMENTS There was therefore, in the present case, no excess of jurisdiction involved in the parties dealing with and the Court determining the additional complaints put forward by the Law Society. It is necessary also to consider the evidence which may be brought before the Supreme Court on an appeal and the way in which it may be put before the Court. In the present case, a number of complaints were made by the Law Society against Mr Sedgwick: at least, the complaints made involved a number of alleged defaults. A number were found in his favour, some were found against him. A large amount of material was before the Tribunal. The parties have taken from that material the material which is relevant for the purposes of this appeal. It comprises several volumes. In the circumstances of this case and having regard to the way in which the matter has proceeded, I see no error in the adoption of such a course. Parties may make admissions. They may, subject to proper limits, waive the rules of evidence or adduce evidence in a form otherwise unacceptable. It is desirable that parties adopt a course of procedure which will minimise the time spent and reduce the cost of what is being done. No objection has been raised in this regard in the present case. There is, however, one matter that' should be noted. By s164, the appeal is to the Supreme Court. But, by operation of the provisions of the Supreme Court Act, that appeal is assigned to the Court of Appeal. The appeal is from a "specified tribunal" within s48(1)(a)(vii); and such an appeal from a specified tribunal is, by force of s48(2)(f) "assigned to the Court of Appeal". But that does not mean that the evidence must be presented by the parties to a Court of Appeal constituted as ordinarily it is, by three Judges of Appeal and that there must be, as it were, a trial in conventional form before a Court of Appeal so constituted. The waste of judicial resources and public facilities by requiring that, for example, oral evidence be presented before three Judges of Appeal, objections to evidence be ruled upon by three Judges, and the like, is not to be presumed. The legislature, in providing for appeals to come before the Court of Appeal, no doubt was conscious of the powers of the Court of Appeal generally under the Supreme Court Act and, in particular, the powers which it has and from time to time exercises to make provision for the taking of evidence in proceedings coming before it. Thus, s51 provides that, where proceedings are pending before it, "the Court of Appeal may, on application by a party or of its own motion, order that the whole or any part of the proceedings be remitted to a Division for the determination by trial or otherwise of the proceedings or any question arising in the proceedings". The words "any question" extends to the determination of any question of fact. In the present case, on 13 April 1993, Kirby P directed that the disputed questions of fact "arising in the appeal" be referred for determination to Cripps JA in the Common Law Division of the Court. His Honour, on 18 June 1993, following a hearing, made "Findings of Fact" accordingly. Whether a direction of this kind should be made by the Court of Appeal will of course depend upon the circumstances of the case. There may be cases in which such an order will be inappropriate: it may, for example, be necessary that the Court of Appeal as ordinarily constituted have the advantage of hearing the evidence given orally before it. In the submissions made in argument on this appeal, no objection has been taken to the course which in this appeal the President directed to be followed. In my respectful opinion, the order made was the appropriate order to be made. See also Supreme Court Act s41(2). URJ SEDGWICK v LAW SOCIETY OF NEW SOUTH WALES (Mahoney JA) 5 The "Findings of Fact" made by Cripps JA are contained in a document of some thirty-five pages. Cripps JA has retired from the Court and the Court has heard the appeal as presently constituted. Those findings are, in principle, the findings of the Supreme Court for the purposes of this appeal. They are to be read together with the reasons of this Court, as presently constituted. But it is, I think, appropriate to indicate what has been said in relation to the acceptance of them for the purposes of this appeal. When the matter came before the Court as presently constituted, the "Report" of Cripps JA was tendered and received on the basis that there was "no objection of a technical kind" to the findings. Mr Sedgwick had, in the light of them, prepared written submissions which were placed before the Court. In order to clarify the position, the Court inquired whether there was any "contest as to the factual correctness of any of the matters that Cripps JA has found". It was then said: "SEDGWICK: The matters raised in the submissions in relation to Creighton and Marsden do question the conclusions drawn by his Honour and, whilst I do not question the facts as they came before his Honour, I was at a loss to understand the conclusions. For example, if your Honours turn to page 22(a), (b), (c) of my submissions, I referred to the matter of Creighton in which his Honour comes to the conclusion that there was an intent by me to deceive the Society in its investigation I do not recall this was covered by evidence. I have drawn the court's attention to the conclusion which I submit, with respect to Cripps JA, could not actually be a correct conclusion. MAHONEY JA: You do not question the findings of primary fact but you do, in those matters, query the inference that he drew from it. Is that a correct statement of it? SEDGWICK: Yes. MAHONEY JA: I shall treat those two as being in question and nothing else, unless you pinpoint it to me. SEDGWICK: That is the main thing in question. KIRBY P: That is the Marsden case and Creighton? SEDGWICK: Yes, I now refer your Honours to page 19, the conclusion as to prejudice. I question his Honour's conclusion on legalities there. I refer your Honours to page 19 Marsden, page 21 Gordon and page 22 Creighton. KIRBY P: That leaves his Honour's finding uncontested: that the claim by Miss King was not competently handled; in the claim of Mrs Torrens that you used their money for your own purposes; and in the claim of Mr Clavan that you placed money in the general account when it should have been placed in the trust account, and the moneys were left there for one-two weeks. The claim of Miss Bromwich, and the claim of Norma Sedgwick, also reflect adversely on your professional competency. His Honour's findings that you had been untruthful to him in his enquiry, and that you exhibited ignorance of the operation of the statute governing solicitors and of your duty to the court and to members of the public generally still stand. How can we possibly allow you to practise with those matters standing admitted? Even on a restricted basis? Even without a full practising certificate? Even under some supervision? I accept that you have acted for little people. But even little people, in relation to a solicitor, are entitled to competence. Maybe they need it more than big people who are capable, often, of looking after themselves." 6 UNREPORTED JUDGMENTS Notwithstanding the terms of the President's order, I have, in fairness to Mr Sedgwick in considering the findings of fact on which the Court should act, taken into account not merely the findings as made by Cripps JA but also the submissions which, in respect of the matters indicated, Mr Sedgwick has made in relation to them. It is on that basis that I have formed the conclusions that I have. 2. THE COMPLAINTS FOR CONSIDERATION BY THE COURT OF APPEAL: In accordance with the procedure which has been adopted by the parties, the complaints which have come before this Court for consideration fall into three categories: complaints which were before the Tribunal and in respect of which the findings of the Tribunal were accepted by the Law Society and Mr Sedgwick on appeal; complaints which were before the Tribunal and in respect of which the findings of the Tribunal were disputed by the Law Society on appeal; and eight additional complaints raised by the Law Society on the appeal. (a) In respect of the first category, Cripps JA summarised the findings in the following way: "The Tribunal found that during the period between his father's death and his mother's death, Mr Sedgwick ran the practice for his mother for nearly six years contrary to the provisions of s119 and its legislative predecessor. The legislation precludes an unqualified person from sharing in the receipts of a legal practice except in special circumstances and for a limited period. Mr Sedgwick said he did not believe he was acting unlawfully because the practice made a loss (after his salary was paid) each year and hence no profits were shared. The Tribunal found that Mr Sedgwick had 'totally misconceived the scheme of the Act which is designed to preclude an unqualified person from sharing in the receipts of a legal practice except in special circumstances and for a limited period.' The Tribunal rejected the Society's allegations that Mr Sedgwick acted improperly in the administration of his mother's estate and, in particular, with respect to the occupation of his late mother's home. It rejected, in terms, his sister's allegations of impropriety which, it found, were motivated by vindictiveness. However, it found with respect to his administration of his mother's estate that he had transferred $4470.08 from the Estate Trust Account to his office account without rendering a bill and in breach of s61 of the Act and cl8 of the Legal Profession (Trust Account and Controlled Money) Regulation 1988. The Tribunal found Mr Sedgwick has misused trust funds belonging to the Estate of the late Thomas Pratt, the executors and trustees of which were elderly people. Mr Pratt died some time prior to 1980. From 1980 until April 1986, Mr Sedgwick held $5362.82 in his Trust Account on behalf of the Estate. On 24 April 1986 and on 23 February 1988 moneys were transferred from the Trust Account to the General Account without authority and were used by Mr Sedgwick for his own purposes including the payment of money for long service leave to two retiring employees. The Tribunal found that he had delayed in accounting to the beneficiaries for more than seven years, that he was guilty of misappropriation of clients' money and guilty of trying to cover up his dereliction of duty. The Tribunal found that Mr Sedgwick transferred the sum of $1000 from the Trust Account of the Estate of the late Eva Mary Josephine Courte to his General Account without authority from the executor and without rendering a bill of costs. It found that he had attempted to cover his tracks. URJ SEDGWICK v LAW SOCIETY OF NEW SOUTH WALES (Mahoney JA) 7 It found that with respect to the Estate of the late George William Fletcher he delayed the administration of the Estate and, because he transferred costs from his Trust Account to his General Account before the grant of administration, he was in breach of s41 and s42 of the earlier legislation. It accepted, however, that Mr Sedgwick understood he was authorised by Mr Norman Fletcher, the executor, to transfer the money." (b) The second category related to three matters (the matters and particulars alleged in respect of them are summarised in the Notice of Contention filed by the Law Society). These involve complaints that: he was guilty of professional misconduct as solicitor and executor of the estate of his mother; he was guilty of professional misconduct as solicitor for Miss Bromwich; and that he was guilty of professional misconduct as solicitor for the estate of the late Mr Palmer. Cripps JA formulated his conclusions in respect of these matters in the following terms: "FINDINGS DISPUTED BY THE SOCIETY The Society maintains that Mr Sedgwick's conduct in the manner of running the practice after 1982 was not only undertaken in the knowledge that what was being done was unlawful but also for the purpose of diminishing the value of his mother's estate by saddling it with debts of the practice so that on her death he would acquire the practice and his brothers and sisters would be left to divide up the debt-ridden estate of his mother. Mr Sedgwick accepts that he was in breach of the law but denies his conduct was relevantly 'wilful'. He maintains he thought he was entitled to run the practice at a loss so that there would be no profits being shared with an unqualified person. That is what he told his brother, who gave evidence on his behalf. For reasons which will emerge in greater detail later, I find his explanation difficult to accept and I think the Tribunal's statement to the effect that Mr Sedgwick misconceived his obligations under the legislation meant that he knew that what he was doing was in breach of the law. However, the Society goes further and maintains that his purpose was to defraud his brothers and sisters The Society alleged that when acting for an elderly client Miss Bromwich, he transferred $963.90 from his Trust Account to his General Account without her authority. It found Mr Sedgwick had authority to transfer the money and to use it for Miss Bromwich's needs when she was in a retirement village. The Society submits that the Tribunal misunderstood the evidence and that Mr Sedgwick had acted unlawfully. It pointed to his evidence that he received his instructions on 24 October 1986 but did not transfer the money until 16 February 1988. The Tribunal found it could not: 'understand the delay in transferring the money from the trust account to the office account nor the necessity to make the transfer at all'. Finally, the Society challenges the finding that, with respect to the Estate of the late Robert Palmer, his unauthorised transfer of moneys was because he misunderstood the advice he had received from Mr Glissan of counsel. The Society points to the circumstance that Mr Glissan did not tell him he could transfer the money from his Trust Account to his General Account as he did. Mr Sedgwick's explanation is, I think, that because Mr Glissan told him he was not obliged to be out of pocket, he, Mr Sedgwick, viewed that as advice that he could lawfully transfer funds as he did. The Society maintains that his excuse is not acceptable. Either it is untrue, which is its first submission, or if true, it demonstrates a lamentable understanding of his obligations. 8 UNREPORTED JUDGMENTS The matters to be determined with respect to the findings of the Tribunal are, accordingly, whether Mr Sedgwick conducted the practice between 1982 and 1988 ignorant of his legal obligations and whether his purpose was to defraud his brother and sisters. Second, whether he had Miss Bromwich's authority to transfer $963.90 from his Trust Account to his General Account. Third, whether he genuinely 'misunderstood' counsel's advice with respect to being paid his costs from the Estate Account without any court order or other authority." His Honour stated his conclusions with respect to the disputed findings of the Tribunal in the following terms: "1. Miss Bromwich I do not agree with all the findings of the Tribunal. I believe Mr Sedgwick had Miss Bromwich's authority to use her money for her needs and that he received those instructions in October 1986. He transferred the money from his Trust Account to his General Account in February 1988. There it remained. There was no reason why the money should have been taken out of the Trust Account at all unless for the purpose of paying for a requirement of Miss Bromwich. I can only conclude that he transferred the money in order to boost his General Account. He either knew that what he was doing was unlawful or, if he did not, his conduct demonstrates a lamentable lack of understanding of his professional obligations. 2. Palmer The Tribunal found that Mr Sedgwick transferred moneys from the Estate Account to his General Account because he misunderstood advice given to him by Mr Glissan of counsel. I am bound to say I find it difficult to understand what it was that Mr Sedgwick misunderstood. Mr Glissan did not tell him he could transfer the money as he did. However, I am not prepared to disturb the Tribunal's findings. 3. The Estate of Norma Gwendoline Sedgwick The Tribunal found that Mr Sedgwick was in breach of the law in the way he conducted the practice between 1982 and 1988. The question I am asked to determine is whether Mr Sedgwick intended to defraud his brother and sisters. I am satisfied he was. He said he believed he was entitled to act as he did provided only the practice made no profits. That explanation does not really explain why the practice was not sold. However, rejection of his explanation does not establish the criminal intention suggested by the Society. But whatever his motive, his conduct reflects adversely on his professional competency." (c) The additional allegations involved: an allegation of gross delay in handling a claim by Mrs Pauline King on behalf of her son; and seven separate complaints of "professional misconduct, negligence and dereliction of duty" when acting for the Torrens family, the Marsden family, Mrs Joyce Gordon, Mr and Mrs Creighton, Mr Lewis Clavan and Mr Keeble. The judge's findings in this regard are set out at length in the "Findings of Fact". I shall summarise what his Honour said. In respect of the King claim,; there was gross delay in taking proceedings as instructed and Mr Sedgwick's explanation of the delay was not "the real explanation for' it but "merely a circumstance which he has seized upon to try to justify inordinate delay". Mr Sedgwick acted for Mr and Mr Torrens and their son Gordon over a number of years, in respect of a conveyancing transaction, a personal injuries claim, and serious criminal charges brought against Mr Gordon Torrens. His Honour found difficulty in making precise findings in respect of some of the allegations made by the Law Society because, inter alia, of the unreliability of the URJ SEDGWICK v LAW SOCIETY OF NEW SOUTH WALES (Mahoney JA) 9 recollections of Mr and Mrs Torrens. However, his Honour concluded that Mr Sedgwick was, in relation to them, guilty of a number of defaults. After they changed solicitors, he "made representations to them which were not true". He put money in his General Account rather than in his Trust Account "because he considered himself to be the debtor" but gave another reason for doing so to Mrs Torrens. His Honour concluded that "he transferred money from his Trust Account to his General Account without authority". ie, in circumstances in which Mr and Mrs Torrens were not properly advised and did not give their informed consent to what he was doing. In respect of the litigation, a loan was made as to which his Honour said that there was "professional incompetence on his part". He transferred moneys from his Trust Account to his General Account "and was incompetent in handling Mrs Torrens' third party claim". He did not transfer the money "for the purpose of defrauding the Torrens' in the sense that he intended to deprive them permanently of it. It is apparent, however, that he used their money for his own purposes". He put the money in his own account "because he believed that he was the person entitled to it" but "that was not what he represented to Mrs Torrens' solicitors". The position in relation to the Marsden family was complicated. He acted for Mr and Mrs Marsden on two conveyancing transactions and for their son Mr Paul Marsden in matrimonial proceedings. In respect of Mr and Mrs Marsden, he deducted some $5740 from moneys claimed by them without their authority, upon a claim that he was entitled to deduct the money. His Honour concluded that the money was deducted by Mr Sedgwick "because he thought he was entitled to it. He had not rendered the necessary account and he did not have Mr and Mrs Marsden's authority to deduct the money". But the money deducted related to an account which Mr Sedgwick claimed was owed to him by Mr Paul Marsden. A separate default was alleged in respect of a payment by Mr Sedgwick out of moneys owned by a Mr Edgecombe. That money was used to pay Mr and Mrs Marsden's indebtedness to a finance company and others. His Honour concluded that the allegation that Mr Edgecombe did not authorise the deduction of the money was not made out. However, he was satisfied that "Mr Sedgwick acted improperly in not advising Mr Edgecombe to take independent advice before committing money to the repayment of Mr and Mrs Marsden's debts without becoming the registered proprietor of the land but that the information he furnished to the Society amounted to deliberate concealment of what had happened". "The conclusion is inescapable... that Mr Sedgwick attempted deliberately to mislead the Society". In addition, Mr Sedgwick "failed to account to Trudi Marsden" (Mr Paul Marsden's former wife) "for $500 deposited by Mr Paul Marsden for payment to her. That money was placed in his General Account and used by him. Furthermore, he, as I find, consciously attempted to mislead the Society with respect to this Trust Account ledger". His Honour dealt at length with the complaints relating to Mrs Joyce Isobel Gordon. The judge's findings in relation to Mrs Gordon are set out in some nine pages of his findings. His Honour's conclusion was: "The Society has established that with respect to Mrs Gordon's matters Mr Sedgwick was in breach of the provisions of the Legal Aid Commission Act 1979, that he attempted to mislead the Legal Aid Commission, that he improperly transferred trust funds from his Trust Account to his General Account and that he attempted to mislead the Legal Aid Commission. Furthermore, Mr Sedgwick was untruthful in the witness box." 10 UNREPORTED JUDGMENTS These conclusions relate to proceedings in which Mr Sedgwick acted for Mrs Gordon in a claim in respect of the estate of the Cyril Gordon Mason. Her claim against the estate was settled on terms, inter alia, that each party pay its or her own costs. He received on her behalf the sum of $21,000 and placed it in his Trust Account. He prepared a bill of costs for the Legal Aid Commission in the amount of $12,973.85. It is in respect of these two matters that the findings were made. His Honour detailed what had happened in respect of them, the explanations originally given and the subsequent acceptance by Mr Sedgwick of some of the matters alleged against him. Mr and Mrs Creighton had sought Mr Sedgwick's advice as to whether they could maximise their social security entitlements by transferring a property in Casino to their children as a gift. In respect of what he did Mr Sedgwick sent to the clients two accounts. His Honour said: "The charge against Mr Sedgwick is not that he improperly used his client's money. It is that he charged for work not done. This allegation is, I think, inescapable. But even if my view be wrong, he cannot avoid the charge that the letter written in April 1993 was for the purpose of attempting to deceive the Society in its investigation into his affairs." The findings in respect of Mr Clavan relate to amounts of $763 and $324 given to him so that $1000 could be paid to Elders Estate Ltd in payment of Mr Clavan's debts to that company. The amounts should have been paid into the trust account: they were paid into the general account. His Honour said: "The findings I make are that he placed money in his General Account when it should have been placed in his Trust Account and the moneys were left there for between one and two weeks before being paid out to the intended ultimate recipient. Furthermore, that Mr Sedgwick knew the money should have been paid into his Trust Account and consequently was aware that his conduct was in breach of the order made by Priestley JA." In respect of Mr Keeble, Mr Sedgwick agreed "that he received $9500 from Mr Keeble which he placed in his Trust Account. Without his authority on 22 April 1991, he transferred an amount of $1500 to his General Account. He had not rendered a bill of costs. Mr Keeble accepts that he may have authorised the payment and, because the Society says it does not propose to take the matter any further, that is the finding I make." It is proper to record, in fairness to Mr Sedgwick, that a number of the allegations made against him before the Tribunal were not sustained and that some of the allegations pressed before Cripps JA were not accepted by his Honour. 3. FACTUAL CONCLUSIONS: Upon the basis of what he set out in the "Findings of Fact", Cripps JA concluded: "The Tribunal's findings of misconduct involving misappropriation of clients' moneys, false entries in Trust and General Account records, wilful breaches of s61 of the Act and professional incompetence are upheld. In addition the Society has proved other instances of breaches of the Act with respect to Mr Sedgwick's dealing with Trust moneys. It has also established non-compliance with orders of this Court, improper concealment of relevant matters from the Legal Aid Commission and the Society and inexcusable delay in handling his clients' affairs. Mr Sedgwick was not always frank with the Court and, on occasions, untruthful. Accepting, as I have, that many unlawful acts were not done with an URJ SEDGWICK v LAW SOCIETY OF NEW SOUTH WALES (Mahoney JA) 11 intent to cheat or defraud clients in the sense of permanently depriving them of their money, the Society has established nonetheless that Mr Sedgwick by his conduct has exhibited ignorance of his obligations under the Act, to the Court and to members of the public generally." Determining whether and to what extent this Court should act upon what his Honour has said, two things are to be taken into account: the qualifications urged by Mr Sedgwick in his oral submissions to this Court (to which I have already referred); and (as I shall describe it) the Smith principle. As I have indicated, Mr Sedgwick questioned or sought to qualify the judge's findings in respect of the Marsden, Gordon and Creighton matters. The additional complaints and the particulars of them were set forth in a document "Notice of Additional Evidence Material and Particulars" filed in the proceedings. A number of things were alleged in relation to the Marsden matter. The judge saw the complaint as relating to three things: the sale of Marsden land, the grant of legal aid to the son Mr Paul Marsden, and the alleged misuse of money by Mr Sedgwick. The judge found that Mr Sedgwick deducted $5740.50 from the proceeds of sale of the Marsden land when he did not have the authority of the partial owners Mr and Mrs Marsden to do so. The amount was a debt owed by the other partial owner, their son. His Honour found that Mr Sedgwick deducted the money because he thought he was entitled to it: he had not rendered an account, nor did he have the authority of Mr and Mrs Marsden to make the deduction. I do not think that what Mr Sedgwick has urged alters the substantial correctness of the finding which the judge made he should not have deducted $5740.50 on account of the fees he claimed in that way. The claim for money from the Legal Aid Commission in respect of Mr Paul Marsden was not made for the purpose of double charging in Mr Sedgwick's favour: the judge accepted that he did not intend "to defraud the Legal Aid Commission". I do not think that what Mr Sedgwick has done adds significantly to his Honour's findings in that regard. The judge found that $500 deposited with Mr Sedgwick by Mr Marsden was placed "in his General Account and used by him". "He consciously attempted to mislead the Society with respect to this Trust Account ledger". Mr Sedgwick, in his written submissions, refers to this as "a serious breach" and says "all I can say is that it was overlooked by me after June 1989 as the result of events which were occurring at that time and of which the Court is now aware". In respect of the Gordon matter, Cripps JA concluded that Mr Sedgwick was in breach of the Legal Aid Commission Act 1979, that he attempted to mislead the Commission, that he improperly transferred trust funds from his trust account to his general account, and that he attempted to mislead the Legal Aid Commission. "Furthermore, Mr Sedgwick was untruthful in the witness box". Mr Sedgwick has contended that he was "concerned about the liability of myself and/or Mrs Gordon to be become(sic) liable for payment to the LAC for an amount which was substantially in excess of the amount they had paid out'. His suggestion was, as I understand his submissions, that he had acted upon a mistaken view of what was required. I do not think that, in view of his Honour's conclusions as to Mr Sedgwick as a witness, this contention can be accepted as qualifying the judge's findings. 12 UNREPORTED JUDGMENTS In respect of the Creighton matter, his Honour concluded that the charge was "not that he improperly used his client's money. It is that he charged for work not done. This allegation is, I think, inescapable". What Mr Sedgwick has submitted does not, in my opinion, lessen the correctness or the force of that conclusion. In Bannister v Walton (1993) 30 NSWLR 699 there was discussion in this Court of the important decision of the High Court in Smith v New South Wales Bar Association (1992) 176 CLR 256: see generally at 723 et seq. That decision, and what was there said, is in my opinion of significance in view of the form of the "Findings of Fact" made by Cripps JA. The matter referred to his Honour involved the findings of fact to be made in the determination of the complaints. On one view, his Honour in some respects made findings which went further than was strictly necessary for the determination of those issues of fact. His Honour referred, for example, to the credibility of what was said by Mr Sedgwick in several respects. It was, I think, appropriate for his Honour to make those findings insofar as they were necessary to assess Mr Sedgwick's credibility as a witness of truth and of accuracy and to indicate why he had come to particular conclusions of fact. However, no formal complaints had been laid against Mr Sedgwick in respect of, eg, misleading the Court or, in some respects, misleading the Law Society. In Bannister v Walton, there was discussion of the extent to which the Court may, in a disciplinary matter, take into account a finding that the practitioner has lied, to the Court or to the Law Society, when lying is not as such one of the complaints that have been made: see, eg, at 728 et seq. In deference to what was said by the High Court in that case and in particular in deference to the judgment of Deane J, it is in my opinion proper in the present case not to take into account, separately and as such, such findings as the judge made in relation to the veracity of Mr Sedgwick's statements to him or to the Law Society. As I have said, I do not doubt but that it was proper for the judge to take into account such findings insofar as they led to his conclusions in respect of credibility and in respect of the issues of fact formally before him. But it is, in my opinion, appropriate that in this case those findings be not otherwise used in determining what orders should be made. I have, in this regard and otherwise, confined what I take into account in deciding what order should be made to the terms of the complaints, and the particulars given in respect of them, insofar as they have been established by the evidence. 4. WHAT ORDERS SHOULD BE MADE: The Tribunal found: misappropriation of clients' moneys, trust account irregularities and professional incompetence. The additional complaints involved: further trust account breaches and "inexcusable delay in handling" clients' affairs. These are the matter which, if I adhere to the terms of the complaints, provide the main matters to be taken into account in deciding what orders should be made. As I have indicated, findings as to Mr Sedgwick's lack of frankness and other matters, though relevant in assessing credibility: Bannister v Walton (1993) 30 NSWLR 699; are not matters directly complained of. The defaults which have been established are not large: in a sense, some at least of them are petty. I do not mean by this that it is not necessary that trust account records be properly kept: they must. Money must be handled meticulously: that is necessary and there is no qualification of it. And a client's business must be attended to with proper skill and in due time. But the articulation of generalities does not solve particular problems. Such general URJ SEDGWICK v LAW SOCIETY OF NEW SOUTH WALES (Mahoney JA) 13 principles lay down the boundaries within which the solution is to be found. But in the end the Court must decide how bad the defaults were and what is the significance of them. The amounts involved were comparatively small. No client has suffered great loss. The delays which occurred produced - as far as the evidence establishes - irritation rather than irreparable harm. Again, what I say should not be misunderstood. A widow's mite may be large to her. And to those involved, the loss suffered may, in their circumstances, be greater than appears. But, if justice is to be done, it is necessary to see the defaults in their proper perspective. An assessment must be made of the seriousness of what was done and the effect of it upon Mr Sedgwick's fitness to continue to practice. Mr Sedgwick was a sole practitioner in a country town. He had served his articles of clerkship with his father, also a sole practitioner. He was, in the main, an employee solicitor with his father until, in October 1982, his father died. Thereafter, until his mother's death in August 1988, his mother owned the firm and, he claimed, he was employed as the sole practitioner in the firm. Thereafter, he conducted the practice as his own. In deciding what orders should be made, it is, as I have suggested, necessary to decide what is to be expected of a sole practitioner in a country town. I confess to feeling that sometimes there is unreality in the way in which solicitors' defaults are judged. Perfection is desirable. But it is not every failure to achieve it which warrants removal from the Roll. Distinctions are to be drawn: to this I shall refer. In most spheres of life, it is accepted that the standard of the performance attained is less than perfect. The standard attained by a surgeon, an economist, an architect or a legislator is not perfect. There is no criticism in this, only pragmatic assessment. It is, in my opinion, important that the law does not impose upon a sole practitioner in a country town a standard of performance which is beyond what realistically can be expected. There are, in my opinion, at least three things to be borne in mind. The practice of law has changed: the detailed administration of a practice involves much more than it did. The relationship between solicitor and his client is not what it was. And those who engage a sole practitioner cannot typically expect the same standard as performance of a large law practice might give. During a (not yet concluded) professional life, the routine record keeping and administrative requirements of a solicitor's practice have increased greatly. The time which a solicitor must give to administrative work, himself or through others, is now substantial. What is required in respect of Trust and other Accounts is an illustration of this. The relationship between a solicitor and his client has also changed. Previously a solicitor could, in general, expect confidence and understanding in his relationship with his client and act on that basis. The client could expect the same. But increasingly he must now, in anticipation of claims, litigation or disciplinary proceedings, look to a relationship which is more adversarial. He must document his obligations to and from the client, by letters or formal contracts. He will, if he is prudent, keep detailed diary notes, time records, and the like. These things increase the administrative burden. They require - I put the matter in general terms - that a solicitor must spend an increasing part of his time in administrative work and he has less time available for the actual discharge of those matters - consultations, advice and the carrying on of the client's business 14 UNREPORTED JUDGMENTS - for which primarily he is engaged. He can give less time to those things which essentially a solicitor should do or he must engage and pay others to do the administrative work on his behalf. There is a third matter which is of importance in this case. In deciding the significance of a solicitor's defaults, the Court must, in my opinion, determine in respect of the solicitor - in this case a sole practitioner in a country town - not merely how quickly he may be expected to do what he is engaged to do, but also how well he can be expected to do it. A large firm with elaborate apparatus and surplus staff may do what it is engaged to do in a short time: its fees may found the assumption that that can be expected of it. The Court should recognise that that cannot be expected of a solicitor in a different professional context. That, perhaps, needs no proof But it is necessary also to determine what degree of error is acceptable in the case of a solicitor in a position such as that of Mr Sedgwick. A practitioner must not assume to act where he is not capable of acting properly. But that is a generality. The Court must, I think, recognise the reality that a solicitor who endeavours to act only within his competence and capacity may yet make mistakes. He may make mistakes in the sense of errors of judgment. But he may go further: he may do wrong. In this case, Mr Sedgwick transferred money from Trust to General Account when he should not have done so and he used for his own purposes money that should have been kept for the clients. If I may adapt terms, this involved not merely error but wrongdoing. The fact that a solicitor has acted wrongly does not mean that he must be removed from the Roll. What has been done must be assessed and the Court must determine whether, properly assessed, it warrants the conclusion that, for example, he is not fit to practise. How do these considerations affect what Mr Sedgwick did? There were, as the judge found, several occasions on which money was transferred from the Trust Account (where it should have been retained) to the General Account (where Mr Sedgwick could use it) without proper authority. In some of these cases at least, he believed he was entitled to the money if he complied with the appropriate legal procedures. In several cases, he did not attend to clients' business as he should: for example, in Mrs King's case for over four years he did not take proceedings when he should have done so and had received a litigation loan of $2900 to do it. But there were more serious defaults. There were cases in which what he did was, I think, morally wrong to his knowledge. The Gordon case was an example of this. Cnpps JA dealt with the matter in detail. Mr Sedgwick received on her behalf $21,000. In December 1990, he paid $13,850 and transferred to "Office Account" three amounts of $1000, $6000 and $150. The last mentioned may be put aside. The $6000 he had told Mrs Gordon was "retained on account of costs to await repayment and reimbursement of Legal Aid Commission": in fact, some at least of it was used for his own purposes. He sought reimbursement of costs from the Legal Aid Commission and correspondence ensued, reference to which is made in the Findings of Fact. The judge, having heard his explanations, said: "Tt is clear that what he was previously doing was telling Mrs Gordon one version of the events and the Legal Aid Commission an entirely different version. I am not prepared to conclude that he intended to defraud Mrs Gordon in the sense of depriving her permanently of moneys to which she was entitled. However, I am of the view that he acted as he did, first, because he wished to use her money and, second, because he wanted to cover up his actions to the Legal Aid Commission." URJ SEDGWICK v LAW SOCIETY OF NEW SOUTH WALES (Meagher JA) 15 His Honour concluded that "he attempted to mislead the Legal Aid Commission, that he improperly transferred trust funds from his Trust Account to his General Account and that he attempted to mislead the Legal Aid Commission". In his written submissions to this Court, Mr Sedgwick attempted again to deal with this matter. The explanation which he now gives is, it may be, the explanation, or similar to the explanation, given to Cripps JA and rejected by him. But however that be, I see nothing in what he has said to this Court which leads to a conclusion substantially different from that adopted by Cripps JA. The Court must take into account all of the findings which have been made for the purpose of determining whether Mr Sedgwick is at present a person fit to practise as a solicitor. Reluctantly, I have come to the conclusion that he is not. What he has done, in relation to matters small and not so small is such that I think that, if allowed to practice, he would again succumb to difficulties of the kind which have led him to his past defaults. I think his name should be removed from the Roll of Solicitors. Ihave considered whether it would be appropriate to make a conditional order or an order limited to disqualification for a specific period of time. Again, I do not think that such an order would be appropriate. The Court is, in my opinion, not in a position to formulate conditions or fix a period of time which would, with the appropriate probability, provide appropriate protection for those who might deal with him. However, I do not mean by what I have said to suggest that he is a man of malicious bent or incorrigibly bad. It may be that, after the passing of a time appropriate to restore some confidence in his future conduct, it will be possible for him to be allowed to practise, not alone but with others, and under a proper degree of supervision. However, this is not a matter on which I express a concluded view. Any application subsequently made by him must be considered on its merits by the body of the court before which it comes. In my opinion, Mr Sedgwick's name must be removed from the Roll of Solicitors. I would dismiss the appeal with costs. Meagher JA I agree with Mahoney JA. 1. Confirm the order removing the name of Shaw McNeil Sedgwick from the Roll of Solicitors; 2. Appeal dismissed with costs. Appellant appeared in person Counsel for the respondent: B H Donovan QC Solicitor for the respondent: F J Smith, Law Society of New South Wales