COSHOTT v THE COUNCIL OF THE LAW SOCIETY OF NEW SOUTH WALES SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL MEAGHER, SHELLER and STEIN JJA 1, 2 October 1997, 17 December 1997 [1997] NSWCA 80 Legal practitioners — solicitors — trust accounts — statutory requirements — Legal Profession Act 1987 s61, s62 — complaints — Legal Services Tribunal — duty not to mislead These two appeals concern the statutory requirement that a solicitor pay money received on behalf of another person into a general trust account at a bank, except where that person otherwise directs, and the duty of a solicitor not to mislead clients or a tribunal investigating complaints against that solicitor. The appellant Solicitor was a sole practitioner who ceased operating a trust account after March 1989, and after ceasing to practise on 30 June 1991, transferred his current files to other solicitors. The first appeal arose out of a complaint made against the Solicitor by the Council of the Law Society of New South Wales to the Legal Profession Disciplinary Tribunal, in 1993. It alleged that the Solicitor had wilfully contravened s61 and s62 of the Act in relation to the affairs of thirteen clients. Of these, one contravention was dismissed, and four were not pressed. The allegation in each case was that the Solicitor had dealt with money received by him on behalf of the client by paying the cheque received into one of three general accounts in his name without the client's authority. A supplementary complaint was made alleging the Solicitor had wilfully made false statements in a statutory declaration, propounded false documents, and endeavoured to mislead the Legal Profession Disciplinary Tribunal. The Tribunal found wilful breaches of both s61 and s62 in respect of the eight matters, that statements made by the Solicitor were false and false to the knowledge of the Solicitor, that file notes or part thereof were false, and that he endeavoured to mislead the Tribunal. The second appeal arose out of an information by the Council to the Legal Services Tribunal (which replaced the Legal Profession Disciplinary Tribunal), in 1996, complaining of professional misconduct whereby the Solicitor endeavoured to mislead or did mislead the Tribunal and certain former clients about his reasons for obtaining signed confirmations of instructions. The Tribunal found that the solicitor did endeavour to mislead the Tribunal and two of the clients. The Tribunal ordered that the name of the Solicitor be removed from the roll of legal practitioners. The Solicitor appealed from both determinations, and the Council cross-appealed against the Tribunal's failure to find that a file note was made at a later date than it showed on its face. Held: First appeal: As regards three of the clients, there was a wilful contravention of s61 and s62. As regards the others, the Tribunal erred in treating the circumstances in which the confirmation was signed or authority given as indicative of want of "informed authority" at the time the deposit was made, rather than as evidence that before the relevant cheque was deposited to the Solicitor's own account, such a direction had been given. The exception in s61(2) thus applied in each case. 2 UNREPORTED JUDGMENTS The Tribunal rightly proceeded on the basis that the Solicitor bore the onus of establishing the exception. The Tribunal erred in finding statements in the supplementary complaint were false and false to his knowledge. The Tribunal correctly found that the Solicitor wilfully made a false statement in his statutory declaration, propounded false documents and endeavoured to mislead the Tribunal, although it should have found, as claimed in the cross-appeal, not only that a file note was false, but that it was made on a date later than appeared on its face. Second appeal: No ground is shown for interfering with the Tribunal's conclusion. Re Hodgskiss [1962] SR (NSW) 340; In re City Equitable Fire Insurance Co Ltd [1925] 1 Ch 407 at 434; AMIEU v Mudginberri Station Pty Ltd (1986) 161 CLR 98 at 113; Nocturn v Ashburton [1914] AC 932 at 965; O'Reilly v Law Society of New South Wales (1988) 24 NSWLR 204 at 208,230; Smith v New South Wales Bar Association (1992) 176 CLR 256 at 268; Law Society of New South Wales v Foreman (1994) 34 NSWLR 408; Incorporated Law Institute of New South Wales v Meagher (1909) 9 CLR 655 at 681 applied; Sedgwick v Law Society of New South Wales (1994) Disciplinary Reports No 3, 26 at 27 referred to. Meagher JA I agree with Sheller JA. Sheller JA INTRODUCTION These appeals concern the statutory requirement that a solicitor pay money received on behalf of another person into a general trust account at a bank, except where that person otherwise directs, and the duty of a solicitor not to mislead clients or a tribunal investigating complaints against that solicitor. Robert Gilbert Coshott (the Solicitor) was admitted to practise as a solicitor on 3 December 1976, and for some time until 30 June 1991 practised in Double Bay as a sole practitioner under the title, Robert G Coshott and Associates. He did not renew his practising certificate for the year commencing 1 July 1991. After March 1989 he no longer operated a trust account, a matter to which he referred in his application dated 4 May 1990 to renew his practising certificate for the year 1990-1991. After ceasing to practise, the Solicitor transferred his current files to other solicitors, most to an associated firm, Gunn Hamilton and Blay. APPOINTMENT OF INVESTIGATOR On 4 April 1991 the Council of the Law Society of New South Wales (the Council) resolved that Hugh Charles Thomas be appointed pursuant to s55 of the Legal Profession Act 1987 (the Act) to investigate the Solicitor's affairs and to furnish to the Council a report in accordance with the section. On 8 April 1991 Mr Thomas, pursuant to the same section, appointed Francis Robert Christensen, his assistant. Apparently, the Council did not approve Mr Christensen's appointment until 25 February 1993; see s55(2). The investigator reported on 5 November 1992 that in April 1991 Mr Christensen asked the Solicitor for certain files. The Solicitor informed him that virtually all completed files, included those asked for, had been shipped, together with the practice General (Bank) Account cash book and records to Yugoslavia, either with the manager of Yugoslav State Airlines in January 1991 or with the Solicitor's mother-in-law on 3 April 1991. The Solicitor said he was planning to close his practice and conduct an alternative business in Yugoslavia. He transferred the files and records so that he could more readily access, them himself and answer questions of associated solicitors and clients. WROBHOTT v THE COUNCIL OF THE LAW SOCIETY OF NEW SOUTH WALES (Shell JA) After reconstructing records from other sources, on 13 October 1992 the investigator asked the Solicitor if files (generally) had been returned to Australia and for access to 25 files in particular. The Solicitor replied that files had not been returned and that due to the civil war in Yugoslavia "I do not know the current position of the files". TRUST MONEY S61 and s62 of the Act as in force at all material times provided: "61. (1) If a solicitor, in the course of practising as a solicitor, receives money on behalf of another person, the solicitor shall: (a) hold the money exclusively for the other person; and (b) ensure that subs(2) and the regulations are complied with in relation to the money. (2) Money received on behalf of another person by a solicitor, in the course of practising as a solicitor: (a) shall, except where the person on whose behalf the money is received otherwise directs, be paid, within the prescribed time, to the credit of a general trust account at a bank in New South Wales and be held in accordance with such regulations as may be in force in relation to trust money; 'trust money' means money required to be dealt with in accordance with subs2(a). (62) (1) A solicitor shall keep: (a) in the case of trust money (within the meaning of s61) - accounting records; or (b) in the case of money other than trust money - such accounting records or other records (if any) as may be required by the regulations, that disclose at all times the true position in relation to money received by the solicitor on behalf of another person. (2) The accounting records referred to in subs(1) shall be kept in a manner than enables them to be conveniently and properly audited. (3) Without limiting the generality of subs(2), the accounting records referred to in subs(1) shall, if the regulations so require, be kept in such manner as the regulations prescribe. (4) A wilful contravention of subs(1), subs(2) or subs(3) is professional misconduct." Two appeals are before this Court. The first arises out of a complaint (the 1993 complaint) the Council made against the Solicitor on 22 March 1993 to the Legal Profession Disciplinary Tribunal. Ultimately the 1993 complaint fell into two parts, the particulars as originally filed and a supplementary complaint filed on 4 May 1994 during an adjournment of the hearing. The second appeal arises out of an information (the 1996 information), dated 19 April 1996, by the Council to the Legal Services Tribunal, which, on the coming into force of Legal Profession Reform Act 1993, replaced the Legal Profession Disciplinary Tribunal. For convenience I shall refer to both Tribunals as "the Tribunal". THE 1993 COMPLAINT The first part of the 1993 complaint alleged that the Solicitor had wilfully contravened s61 and s62 of the Act. 4 UNREPORTED JUDGMENTS The contraventions particularised related to the affairs of thirteen clients. Four of these were not pressed and one the Tribunal dismissed. The remaining eight related to: 1.(b) Mr Karoly Hes 1.(e) Mrs Alba Marino 1.(g) Mr Dragan Prelevic 1.(h) Mrs Mary Radonjic 1.(i) Mrs Angela Repole 1.G) Mr Dragisa Stanisavljevic 1.) Mrs Cathy Troha 1.(m) Mrs Velika Tuftevska In each case the allegation was that the Solicitor had dealt with money received by him on behalf of the client by paying the cheque received into one of three general accounts in his name without the client's authority. The accounts were with the Commonwealth Bank of Australia, Double Bay and called "General account", "Building No | account" and "Building No 2 account". MS BUNGURIC In a statutory declaration made on 11 December 1993, Fatima Bunguric, who said she was then in Sydney visiting her family and that she had been the Solicitor's assistant for ten years up to the closing of his legal practice in June 1991, said that in early 1989 the Solicitor instructed her that they would not be using the trust account as from 1 April 1989. "Thereafter, whenever a case was settled, we would, at the time of settlement, with the client's approval, have the insurer draw two cheques. One payable to Mr Coshott for the costs and the other payable to the client for the net settlement sum. At the time of delivering the cheque to the client, the client was given a settlement statement, memorandum of costs and signed all necessary acknowledgments and authorities. The practice was that the client was given one copy of those documents, a signed copy was placed in the file and a further copy was put into a folder which was kept with the accounting records. The folder which was kept with the accounting records was given to Mr Christensen at the time of his attendance at our office in April 1991. I have not seen that file since." This file became known as the 'payment or payments file". Regarding Mr Prelevic, Ms Bunguric said: "T recall that he attended at our office, without appointment on the day that he was informed that the insurance company had sent only one cheque for the settlement sum, including costs. At the time of his attendance he was very beligerent [sic] and was not prepared to wait for the cheque to be returned and two cheques obtained, as had been arranged. He demanded a bank cheque for the nett settlement sum and was informed that in order to do so the cheque would have to be deposited into the general account and Mr Coshott's funds used to draw a bank cheque. He insisted on accompanying me to the bank when I obtained the bank cheque and took the cheque and left. He did not return to the office. Prior to going to the bank he was given a settlement statement and memorandum of costs." SOLICITOR'S STATUTORY DECLARATION OF 22 JANUARY 1994 The Solicitor filed a statutory declaration dated 22 January 1994. In answer to all the matters particularised, the Solicitor said that he dealt with the cheques received in accordance with the client's instructions and with their authority. In WROBHOTT v THE COUNCIL OF THE LAW SOCIETY OF NEW SOUTH WALES (Shelle&s JA) the cases of Mrs Radonjic and Mrs Repole, on the client's authority, the defendant in the proceedings drew two cheques, one payable to the Solicitor's firm for costs and disbursements and the other payable to the client for the balance. The costs cheque was deposited into the general account. The client's cheque was delivered to the client. In the cases of Mrs Troha, Mrs Hes and Mrs Tuftevska, the Solicitor said that at the client's request and, as the amounts involved were small, the net amount after costs and disbursements was advanced to the client prior to the receipt of the settlement cheque. When the settlement cheque was received, pursuant to the arrangement with the client, it was deposited into the Solicitor's account. In the case of Mr Stanisavljevic, pursuant to the client's instructions and authority, as the client required the monies urgently, the cheque was deposited into the general account and a cheque drawn from the general account for the balance after deduction of an amount to cover the shortfall in costs. In the case of Mrs Marino, the cheque was deposited, pursuant to the client's instruction and authority, into the general account and a cheque drawn for the balance after allowance for costs and disbursements. About Mr Prelevic the Solicitor said: "....contrary to the agreement reached with the defendant at the hearing, the defendant did not draw 2 cheques. Mr Prelevic was advised that only one cheque had been received and it would have to be returned and 2 cheques drawn. Later that day, Mr Prelevic attended at our office, without an appointment. He was very aggressive and demanded his money immediately, stating that he had waited too long already and would not wait any longer. He insisted that I give him a bank cheque and stated that he would not leave without it. I informed him that, in order to give him a bank cheque then, the cheque would have to be deposited into the general account and a bank cheque drawn from my funds. Mr Prelevic insisted on accompanying my assistant, Fatima Bunguric, to the bank to draw the bank cheque. Prior to going to the bank, Mr Prelevic was given a settlement statement and memorandum of costs and disbursements. Mr Prelevic did not return from the bank with my assistant. He took the bank cheque at the bank and left. A few months later, Mr Prelevic telephoned me. He stated that people were following him everywhere and using infra-red devices to watch him inside his home. He stated that he would kill the insurance people. Such was his behaviour, that I telephoned his family doctor. His doctor informed me that he too was concerned about Mr Prelevic and he had referred him for psychiatric treatment. I then telephoned Merrylands Police and spoke with Constable Liddle. I informed him of my concerns, especially that Mr Prelevic believed that the insurance was using small children to spy on him and he may hurt a child. Constable Liddle said that there was little or nothing he could do, until Mr Prelevic commits an offence." PAYMENTS FILE In a statutory declaration dated 11 February 1994 Mr Christensen declared he had no record of a folder of trust account records containing copies of authorities, settlement statements and memoranda of costs and he did not recall seeing such a folder. He declared further that any documents obtained by him from the Solicitor's practice comprised photocopies which were prepared at his request by Ms Bunguric. Both in his statutory declaration and in evidence Mr Christensen denied he had ever seen the payments file. In cross examination he was asked: 6 UNREPORTED JUDGMENTS "Q. You see, isn't this the reality, that you just don't really recall seeing those documents, that you can't deny seeing them? A. No, sir, that is not the reality at all. I have never seen a folder like this. If I had have one would not have written the 13 reports, including statements in those reports that I did not see settlement statements or bills. I would not have said that if I had seen the documents. Q. I am not going to suggest that you acted dishonestly, Mr Christensen. A. I am sorry sir, I don't see anything else. Q. But what I do suggest is this, that you did have that folder and by the time you made your report......? A. No, that is an absolute lie." On the morning of 14 February 1994, the first day of the hearing, Mr Stone, counsel for the Solicitor, informed the complainant's counsel, Mr Wales, that over the weekend the payments file had been found and that nine of the client files formerly said to have been stored in an unknown place in Yugoslavia had been sent back to the Solicitor. FILES PRODUCED On 15 February, 1994, the second morning of the case, Mr Wales announced that at 6pm the night before he had received a statutory declaration from the Solicitor dated 14 February 1994 together with nine of the files referred to in the complaint. In the statutory declaration the Solicitor declared that these files had been brought to Australia from Serbia in December 1993. He listed the names of the files and referred specifically to the payments file which, he stated, Ms Bunguric had given to Mr Christensen during his investigation. The Solicitor said that he was unaware of this until Ms Bunguric came to Australia in December 1993 and that "On Sunday 13 February 1993, while in conference with my solicitor and counsel, I discovered the payment file in the file of one of my clients, Genaro Santucci, a file which had been delivered to Mr Christensen." When this payments file was handed to Mr Wales, inside it, as a marker, was the business card of Mr Christensen. SOLICITOR'S STATUTORY DECLARATION OF 14 FEBRUARY 1994 In his statutory declaration of 14 February 1994, the Solicitor described how he dealt with money paid by cheque for clients by defendants or insurance companies in personal injury claims, when he no longer operated a trust account: SS ceeeeteeee I obtained the client's instruction to obtain two cheques, one for costs and disbursements and any refunds or other payments to be made on behalf of the client and one for the client himself. I obtained the client's authority to deposit the costs' cheque into my general account and to keep the balance after payment of disbursements etc. Where separate cheques were received, they were dealt with in this way. In matters where the settlement sum was small and included the costs, I would draw my own cheque for the amount due net to the client. Where the client was in a hurry to obtain his money I would draw him a cheque before receiving the insurer's cheque. In either event I would obtain the client's instructions to deposit the cheque to my account and deal with the moneys accordingly. Where the amount due to the client was larger, I would obtain the authority of the client to deposit the insurer's cheque into my own account and, if the funds in that account before the deposit of the insurer's cheque were sufficient, I would draw a cheque for the client for the net sum due to him forthwith; if, on the other hand, the funds already in my account were not sufficient to cover the cheque to the client, I would draw the client's cheque when the insurer's cheque had cleared. \WROBHOTT v THE COUNCIL OF THE LAW SOCIETY OF NEW SOUTH WALES (Shellé# JA) 6. The client's authority was obtained at the time of settlement or at the completion of the hearing and confirmed at the time that the insurer's cheque was received. In all cases the client was given a settlement statement and memorandum of costs and disbursements at or very shortly after the time that his cheque was delivered to him." Next, the Solicitor dealt in detail with the particulars of complaint-about individual clients. He annexed copies of three documents (B1, H2 and L2). Although not in identical terms, they were to like effect and purported to be confirmations signed by Mr Hes, Mrs Radonjic and Mrs Troha that they had authorised the Solicitor to deposit cheques received on their behalf into a general account. In paral2(g) he annexed what he stated to be true copies of the memorandum of costs and disbursements and the settlement sheet given to Mr Prelevic, of the Solicitor's file notes of 19 January and 13 March 1990 and of the settlement statement and memorandum of costs and disbursements from the payments file. The file note said to have been made on 19 January 1990 was in the following terms: "Mr P attended - quite angry upset 'irrational' "Wouldn't wait for cheq to be returned and 2 drawn as arranged - He 'have waited long enough' - Demands bk cheq. Expl'd can only do that from my own monies. In order to do it I want/need to dep cheq into my a/c first. He says 'I want a bk cheq now.' He doesn't want to wait in the office. He will go to Bk with FB to watch her. - FB typed S,S + mem for him. He said 'What's this? What do I need this for?' FB explained in S/C - FB returned alone - Mr P took cheq at Bk and left w/out a word." About Mrs Repole, the Solicitor said: "T acted for Mrs Repole in respect of her claim in the District Court for a repetitive strain injury. In about January 1990 she gave me instructions to settle her claim for $15,000.00 clear to her. I assessed my costs and disbursements at almost $15,000.00 if charged in full. I told Mrs Repole that insurance companies are difficult to deal with on repetitive strain injury claims because they do not believe that repetitive strain injury exists and that insurance companies' solicitors are not generous settlers. I told her that my discussions with them indicated that the most they would offer was $25,000.00 inclusive of costs but clear of any workers' compensation pay back. I said 'So that we can settle this case I will reduce my costs and disbursements to $10,000.00'. Mrs Repole agreed to that. I said 'I will get the insurance company to draw two cheques, one for $15,000.00 for you and one for $10,000.00 for my costs which I will keep.' She agreed to this. The matter settled for $25,000.00 in late February of 1990. My recollection is that the $15,000.00 by way of redemption at the Compensation Court [sic] and at the request of Mrs Repole's daughter I took a memorandum of costs and disbursements in the Common Law proceedings to the Compensation Court on the day of the redemption hearing. I gave a copy to Mrs Repole and I subsequently received two cheques and dealt with them according to my instructions. My recollection is that when I sent the cheque to Mrs Repole I enclosed a settlement statement and memorandum of costs and disbursements. I do not have the file in this matter. Annexed hereto and marked 'I1' is a true copy of the documents in the payments file consisting of a covering letter and photocopy cheque, a memorandum of costs and disbursements and an annotation of agreement." 8 UNREPORTED JUDGMENTS On the third page of annexure I1, which was the second page of the Solicitor's memorandum of costs, appeared the handwritten words: "AGREED AT $10,000.00 TO SETTLE (sep chqs) 5.4.90 Received cheque in payment ($10,000.00)" This handwritten material was what the Solicitor described in the statutory declaration as "an annotation of agreement". The original of the annexure became Exhibit P. The Solicitor also recounted what he said he knew about the payments file. These parts of his statutory declaration are set out in para(i) of the first particular of the supplementary complaint which I quote hereunder. MR CHRISTENSEN'S STATUTORY DECLARATION OF 10 MARCH Although it was never put to Mr Christensen in cross-examination that he had put his card in the payments file, Mr Christensen in a further statutory declaration on 10 March 1994 stated that he had not seen the payments file prior to 14 February 1994, and denied placing his business card within the folder. He declared that it was not his practice to use a business card as a marker and that he would ordinarily use "post-it" notes if he needed temporarily to mark a document during the course of his inspection. Mr Christensen became ill during the course of the case and was not cross examined on this declaration. He was available on the first day of the hearing. MR PRELEVIC'S STATUTORY DECLARATIONS In statutory declarations made on 27 May 1993 and 11 February 1994 Mr Prelevic stated that he did not authorise the Solicitor to deposit any settlement moneys in respect of his proceedings into one of the Solicitor's general accounts or to deduct any expenses, costs or disbursements. Mr Prelevic denied that he attended at the Solicitor's office without an appointment and demanded payment of money immediately and aggressively. He said that his case finished on 28 November 1989 and after about one month he telephoned the Solicitor and his secretary a number of times inquiring when his money would be received. On 19 January 1990 he attended at the Solicitor's office when asked to do so by his secretary and upon his arrival a cheque in his favour was waiting for him. Mr Prelevic did not recall any conversation in which he was told that the defendant had agreed to pay the money with two cheques or that contrary to that agreement only one cheque had been received or that it would have to be returned so two cheques could be drawn. He denied attending at the Solicitor's bank with the Solicitor's secretary to collect a bank cheque. Mr Prelevic gave oral evidence and was cross-examined on behalf of the Solicitor. Material was put to him about psychiatric treatment he had undergone between 1987 and 1992. He was also cross-examined about his account of the occasion that he attended at the Solicitor's office after the settlement of his case. MR ROLES'S EVIDENCE Mrs Repole made no statutory declaration and did not give evidence during the hearing of the 1993 complaint. Her son-in-law, Peter Roles, gave evidence. In 1993, Mr Roles, on behalf of Mrs Repole, asked the Solicitor for an itemisation of his account to her. The Solicitor told Mr Roles that this would involve a lot of work and the bill would come into well in excess of $10,000. He would sue Mrs Repole for the difference. Mr Roles asked him to fax through the authority he had to deduct the $10,000 in the first place. He said he was in receipt of that authority WROBHOTT v THE COUNCIL OF THE LAW SOCIETY OF NEW SOUTH WALES (Shell JA) but he did not fax it through. Mrs Repole decided she did not want to take the matter any further. On 14 May 1993 the Solicitor sent a letter by fax to Mr Roles in which he pointed out that the delivery of an itemised bill might leave Mrs Repole liable for payment of a sum which exceeded the amount of $10,000 received from the insurer, and that if she wished to have the bill taxed there would be a substantial filing fee. "If the client does not lodge the bill for taxation, the client is liable to pay the total of the bill, less any moneys already received on account of costs." Mr Roles said that in further response to his request he received, on 12 May 1993, a copy of the two page memorandum of fees to Mrs Repole dated 1 March 1990 which became exhibit O and had handwritten on the bottom of page two the following: "(NB Agreed at $10,000.00 to reach settlement.) 5.4.90 received cheque in payment ($10,000.00)" This was not identical to the entry on exhibit P. In particular the expression "sep. chqs" in parenthesis was omitted. It was put to Mr Roles in cross examination that this copy of Mrs Repole's account did not come to him from the Solicitor. Amongst other things it did not bear an imprint of the Solicitor's fax number. SUPPLEMENTARY COMPLAINT These events led to the filing of the supplementary complaint which concerned, in particular, the Solicitor's evidence about the whereabouts of the payments file during the period of the investigation and about his file notes of conversations with Mr Prelevic and Mrs Repole. The further particulars of the supplementary complaint were: 1. Wilfully making false statements in a statutory declaration. (i) In paral of his statutory declaration dated 14 February 1994, the solicitor made the following statements: (a) "I am informed by Ms Bunguric and verily believe that she gave the payment file to Mr Christensen and he did not return it to her." (b) "I am not aware that she [Ms Bunguric] had given it [the payments file] to him [Mr Christensen] until she came to Australia in December 1993." (c) "Searches failed to reveal the file." (d) "On Sunday 13 February 1994 while in conference with my solicitor and counsel, I discovered the payments file in the file of one of my clients Genero Santucci, a file which has been delivered to Mr Christensen." Each of these statements was false, and known to the solicitor to be false, in that: (i) Between April 1991 and 13 February 1994 the Solicitor had possession, custody and control of the payments file. (ii) No conversation with Ms Bunguric in the terms or to the effect of the information contained in subpara(a) above, took place. (ii) In para8, para9 and paral0 of his statutory declaration dated 14 February 1994, the solicitor gave an account of certain files being transported to Yugoslavia, being in Yugoslavia in April 1991 and of being brought back to Australia by the solicitor's mother-in-law, arriving on 23 December 1993. These statements were false in that, to the knowledge of the solicitor, the files had not been transported to Yugoslavia and the solicitor at all relevant times had possession, custody and control of those files. 10 UNREPORTED JUDGMENTS (iii) In paral2(g) of his statutory declaration dated 14 February 1994, the solicitor said, in respect of Mr Dragan Prelevic: "Annexed hereto and marked 'G2' is a true copy of my file notes for 19 January 1990 and 13 March 1990". The solicitor thereby represented that the file note of 19 January 1990 was a contemporaneous or relatively contemporaneous record of a conversation with Mr Prelevic on 19 January 1990. (iv) The "file note" for 19 January 1990 was in fact made substantially later than that date and was, in all probability, written some time in 1994. The conversation with Mr Prelevic did not take place in the terms which the file note purports to record. (v) The solicitor made a statutory declaration dated 14 February 1994. In paral2 (i), speaking of Mrs Angela Repole, the solicitor said: "Annexed hereto and marked 'I1' is a true copy of the documents in the payments file consisting of...[inter alia].... a memorandum of costs and disbursements..." (vi) The solicitor thereby represented that the file notes appearing upon the said memorandum of costs were true contemporaneous file notes. (vii) The file notes were, in fact, fabrications. The complainant repeats the matters set out at para2(iv) and para2(v) below. 2. Propounding false documents. (i) The complainant repeats the matters set out in paral(ili) and paral(iv) above. (ii) On the morning of 14 February 1994, the solicitor caused to produced to the Tribunal a file of documents described in his statutory declaration of 14 February 1994 as the "payments file". (iii) Within the payments file was a document which purported to be a copy of a bill of costs addressed to Mrs Angela Repole. (iv) The second page of that bill of costs bore what appeared to be two file notes as follows: "Agreed at $10,000.00 to settle (sep chqs)" and "5.4.90 received cheque in payment ($10,000.00)" (v) These purported file notes were not true contemporaneous file notes and had been produced by a process by which the solicitor took a copy of the second page of the bill of costs (which contained upon it file notes in different terms), obliterated or masked the original file notes, photocopied the document so as to produce a copy without file notes, and then wrote upon the document the file notes that now appear upon it. Endeavouring to mislead the Legal Profession Disciplinary Tribunal. (i) The complainant repeats the matters set out in paral and para2 above. (ii) On the morning of 14 February 1994, the solicitor caused to be produced to the Tribunal a file of documents described in his statutory declaration of 14 February 1994 as the "payment file". The payment file, as produced by the solicitor to the Tribunal, contained within it a business card of Mr Francis Christensen. At no time did Mr Christensen have possession of the payments file and at no time did Mr Christensen insert his business card in the payment file. (iii) The solicitor inserted Mr Christensen's business card in the payment file in an attempt to mislead the Tribunal into accepting that Mr Christensen had had possession of the payment file and had himself put his business card in the payment file. UWROBHOTT v THE COUNCIL OF THE LAW SOCIETY OF NEW SOUTH WALES (Shellét JA) THE 1996 INFORMATION In the 1996 information the Council complained of professional misconduct whereby the Solicitor endeavoured to mislead or did mislead the Tribunal and certain former clients about his reasons for obtaining the signed confirmations. Further particulars of the grounds of complaint were: GROUND 1 (i) Annexed to the Solicitor's Statutory Declaration dated 14 February 1994 as annexures B1, H2 and L2 were documents purporting to be signed confirmations of instructions; The Declaration was tendered as Exhibit 13 before the Legal Profession Disciplinary Tribunal ("the Tribunal") in proceedings No 7 of 1993. (ii) In putting those documents before the Tribunal, the Solicitor was representing to the Tribunal that the persons signing those documents did so with an accurate understanding of their effect. (iii) This representation was false in that the Solicitor misled those persons signing the documents as to their purpose and effect. GROUND 2 (i)The Informant repeats para(i), para(ii) and para(iii) above. (ii) The Solicitor sent to Mrs Repole a form of confirmation similar to the ones referred to above. (iii) The Solicitor gave Mrs Repole a false account of the purpose and effect of the said document. DETERMINATION OF THE 1993 COMPLAINT As originally, made the specific case against the Solicitor was that in the matters referred to the Solicitor had, without the authority of the clients, caused cheques received on their behalf as damages in common law cases to be paid into one of his general accounts without their authority. In respect of the eight matters to which I have referred, the Tribunal found wilful breaches of both s61 and s62 of the Act. These eight findings can conveniently be explained by going first to those in respect of the clients Mr Prelevic, Mr Stanisavljevic and Mrs Repole, where the Tribunal found that the Solicitor had no authority to pay the client's money otherwise than into a general trust account, and then returning to the clients Mr Hes, Mrs Marino, Mrs Radonjic, Mrs Troha and Mrs Tuftevska, where the Tribunal found that the Solicitor had no "informed authority" to pay the client's money otherwise than into a general trust account. Of these eight clients only Mr Prelevic and Mr Stanisavljevic gave evidence to the Tribunal. Mr Oakes SC, who appeared with Mr Stone for the Solicitor on these appeals, accepted, I think correctly, that s61 was in terms which placed upon a solicitor, who paid money received on behalf of another person to the credit of a bank account other than a general trust account, the onus of establishing that that person had directed the solicitor to do so. The section prohibited such payment save on the direction of such person; see generally Dowling v Bowie (1952) 86 CLR 136 at 140 and 144-147 and Chugg v Pacific Dunlop Ltd (1990) 170 CLR 249 at 258. MR PRELEVIC The Solicitor gave evidence, supported by Ms Bunguric's evidence and his file note, about conversations with Mr Prelevic, apparently on 19 January 1990. The evidence was that the Solicitor informed Mr Prelevic that he would have to deposit the bank cheque received from the defendant into his general account in order to be able to pay him the balance after deduction of costs and 12 UNREPORTED JUDGMENTS disbursements. After this conversation the bank cheque was deposited in the Solicitor's general account. However, in fact the defendant's cheque had been deposited in the Solicitor's general account on 17 January 1990. Counsel for the Solicitor properly conceded that on 17 January 1990 the Solicitor had no direction from Mr Prelevic to pay the money otherwise than into a general trust account. The same concession was made to the Tribunal which said: "The factual situation is that this cheque was banked on 17 January 1990, that the client did not attend to receive his settlement moneys until 19 January 1990. The Tribunal finds that the Solicitor did not have authority to bank the cheque into his general account and finds a wilful breach of both s61 and s62 of the Act." The Tribunal did not accept that the Solicitor had a discussion with Mr Prelevic advising him that only one cheque had been received and it would have to be returned and two cheques drawn. The Solicitor conceded that the bank deposit slip of 17 January 1990 was in his own handwriting, although he said he did not know that the cheque had been banked when Mr Prelevic came into his office on 19 January 1990. The Tribunal said that Ms Bunguric's account of the matter was almost identical to that of the Solicitor. In cross-examination the Solicitor denied that he had discussed the detail of this evidence with Ms Bunguric before she prepared her statutory declaration. The Tribunal said that the accounts were so similar that it did not accept the Solicitor's evidence that the matter was not discussed with Ms Bunguric before she prepared her statutory declaration. Ms Bunguric was not available for cross-examination. The Tribunal did not accept the Solicitor's evidence that he had ever asked the insurance company for two cheques. On or about 10 May 1993 Mr Prelevic received from the Solicitor through the post a form of authority prepared by the Solicitor confirming that he did authorise the Solicitor to deposit the settlement moneys into his building account. Mr Prelevic refused to sign this authority. The Tribunal said Mr Prelevic was not shaken in his evidence that he did not authorise the Solicitor to deposit the settlement moneys into one of his building accounts. MR STANISAVLJEVIC The Solicitor acted for Mr Stanisavljevic in respect of a motor vehicle accident claim. On or about 14 March 1990 the Solicitor received from the GIO a cheque for $80,594.89 for damages in respect of that claim. The Council alleged that without the client's authority the Solicitor caused the cheque to be deposited in one of his general accounts on 20 March 1990. Mr Stanisavljevic filed two statutory declarations and gave oral evidence. He said that he was awarded approximately $112,000, and after deductions either for workers' compensation or social services he received a net sum of approximately $67,000. He said he did not receive any statement from the Solicitor giving details of what was deducted but received a cheque through the mail and some papers. The Solicitor annexed to his statutory declaration of 14 February 1994 what he said was a true copy of an interim settlement statement in the matter (annexure J1), at the bottom of which was what appeared to be Mr Stanisavljevic's signature. The client agreed that it was his signature but denied ever signing the document. Above the signature appeared the following: "T hereby confirm my instructions to my solicitor as follows: 1. to deposit the GIO cheque $80,594.11 into Mr Coshott's private account and to draw a bank cheque for me in the sum of $65,594.89. The receipt thereof is hereby acknowledged; WROBHOTT v THE COUNCIL OF THE LAW SOCIETY OF NEW SOUTH WALES (Shelle JA) 2. to negotiate the party and party costs and to apply those monies to payment of my indebtedness to the Mortgage Relief Fund ($4,500.00), my conveyancing costs ($2,000.00) and the unpaid balance of costs in my third party proceedings ($6,000.00)." The Solicitor asserted that the client authorised him to request two cheques from the GIO. In fact, he received a single cheque which he deposited. He said: "Mr Stanisavljevic suggested that I deposit the cheque into my own account and draw a cheque for what was due to him. I told him that I did not operate a trust account. He asked me to deposit it into my own private account and draw a cheque for him. I told him that I could do this, but that I could not draw his cheque until the GIO cheque had cleared. He agreed to this so long as I obtained for him a bank cheque so that he would not have to wait for my cheque to clear through his account. On 30 March 1990 Mr Stanisavljevic attended my office and confirmed his instructions in writing. He authorised me to pay part of the money due to him to the Mortgage Relief Fund and to retain my conveyancing costs out of this fund. I had told him that my costs and disbursements in this matter amounted to $21,000. We agreed that I would retain $15,000 from this fund and retain the party and party costs which I estimated to be $6,000." The Tribunal said that it was not able to determine whether annexure J1 was signed by Mr Stanisavljevic. The original of the document was not available and the copy had black surrounding the signature. The forensic document examiner, Mr Anderson, called by the Council, had left open the possibility that the signature may have been put on the document by superimposing it from another document. "However, the Tribunal accepts the evidence of Mr Stanisavljevic that he did not sign the document......" Mr Stanisavljevic said: "That is my signature but I didn't sign the document. The Tribunal said: "Furthermore, the version put forward by the Solicitor is improbable for the following reasons. The Solicitor has said that because he did not operate a trust account he asked the insurance company to provide two cheques, one for the damages content of the settlement and one for his costs. It is true that in some cases where the Solicitor acted in Common Law proceedings arising out of a Workers' Compensation claim that the settlement was completed by way of redemption in the Workers' Compensation Court and Common Law judgment entered for an amount to equal the Solicitor's costs. However, this was a third party claim and there would be no reason for, nor likelihood that the insurance company would draw two cheques for the judgment sum when the Solicitor's party-and-party costs had not yet been assessed or taxed. The Tribunal does not accept that there was any discussion with Mr Stanisavljevic about two cheques being drawn and the Tribunal prefers Mr Stanisavljevic's evidence to that of the Solicitor." The Tribunal also referred to the Solicitor's file annotations between 20 March and 8 July 1990, a copy of which he annexed. On 20 March there was reference to a telephone call to "Mr S" including the following statement: "GIO did not draw 2 cheqs as arranged must clear cheq. Mr S wants bk cheq asap for purchase of new home. RGC will dep into B No 2 (unused) account to clear as won't use trust account for one cheq. Will take 10 days to clear then bk cheq for $69594.59 (less $15,000 on account of CS & DS). RGC can't advance that amount as don't have it. He must wait for cheq to clear. Mr S OK with that - appointment on 30.3.12 noon." The Tribunal continued: 14 UNREPORTED JUDGMENTS "This matter was a motor vehicle accident claim which went to judgment in the District Court and accordingly the Plaintiff was entitled to costs in addition to the judgment sum. When the Solicitor received the net cheque for $80,594.89 which was the judgment sum less Workers' Compensation, it is clear that there was no agreement as to costs as according to the Solicitor's own file note this was not discussed with the GIO until 8 July 1990. In these circumstances the Tribunal does not accept that the Solicitor ever arranged with the GIO to draw two cheques for what was the net verdict moneys excluding the Plaintiff's costs and the reference in his file note to such a discussion must be false. Where the Solicitor's evidence differs from the evidence of Mr Stanisavljevic the Tribunal prefers the evidence of Mr Stanisavljevic. It is noted that in the extract from the file note referred to above which is dated 20 March (1990) there is reference to "RGC will dep into B No 2 (unused) a/c to clear as won't use trust a/c for one cheque'. According to the Solicitor's own Statutory Declaration he had ceased to operate a trust account in March of 1989 and accordingly the above reference to 'as won't use trust account for one cheque' must be false." MRS REPOLE The Solicitor acted for Mrs Repole in workers' compensation and common law proceedings arising out of an accident on 21 May 1986. On or about 5 April 1990 the Solicitor received from Messrs Dexter Healey & Co a cheque for $10,000 for damages and costs. This cheque the Solicitor deposited to one of his general accounts on 10 April 1990. As [have said, Mrs Repole did not give evidence but her son-in-law, Mr Roles, did. The Tribunal said it was clear that the matter was settled by way of a redemption in the Workers' Compensation Court for $15,000 and the balance of $10,000 was dealt with by way of common law judgment. The Tribunal referred to a conversation between the Solicitor and Mrs Repole in which the Solicitor sought "confirmation of her authority to pay $10,000 to my costs to complete my accounting records which were required by the Law Society." Mrs Repole did not sign the form of authority that was sent to her and involved Mr Roles in subsequent discussions with the Solicitor. According to the correspondence from Mr Roles to the Solicitor, he denied there had been a specific agreement as to costs and sought to have the bill taxed. The Tribunal said it was not clear precisely when exhibit O, the copy of the memorandum of account addressed to Mrs Repole dated 1 March 1990 with handwriting on the second page, received by Mr Roles, came into existence. "However this does not alter the situation that Mrs Repole did not sign the form of authority confirming her agreement to the amount of these costs which throws into doubt the validity of the Solicitor's file note on the bottom of Exhibit 'O' which is different to that on the bottom of Exhibit 'P' being annexure 'I1' to the Solicitor's Statutory Declaration dated 14 February 1994 the text of which is set out previously. This matter is dealt with in more detail in the Supplementary Complaint and for the purposes of this particular Complaint the Tribunal is not satisfied that Mrs Repole ever agreed to the amount of costs deducted by the solicitor and accordingly could not have authorised payment into his account. The Tribunal is satisfied that the Solicitor did not have Mrs Repole's authority to charge the amount that he did and deposit the settlement cheque into his personal account and therefore finds that the Solicitor was in breach of s61 and s62 of the Act and that these breaches were wilful." WROBHOTT v THE COUNCIL OF THE LAW SOCIETY OF NEW SOUTH WALES (Shells JA) In dealing with this matter in the supplementary complaint the Tribunal said that it was clear from the cross examination of Mr Roles that exhibit O had not been sent to him by the Solicitor and probably came into his possession from Mrs me « Repole's "present" solicitor. INFORMED SOLICITOR I turn now to the five clients, Mr Hes, Mrs Marino, Mrs Radonjic, Mrs Troha and Mrs Tuftevska who, the Tribunal found, had not given the Solicitor "informed authority" to pay moneys received on their behalf otherwise than into a general trust account. MR HES The Solicitor acted for Mr Hes in a motor vehicle claim. On or about 5 April 1990 the Solicitor received from the GIO a cheque for $8,500 for damages, out of pocket expenses, loss of wages and legal costs which, on 10 April 1990, the Solicitor caused to be deposited to the credit of one of his general accounts. The Council alleged that the Solicitor did this without Mr Hes's authority. The Solicitor denied that he did not have authority and alleged that he had a conversation with Mr Hes in which the client agreed that the Solicitor could deposit the cheque into his general account and then draw a cheque in favour of the client. On 7 March 1990 Mr Hes signed an authority and direction to GIO to pay $8,500 inclusive of costs to the Solicitor, but it was not suggested that this was a direction to the Solicitor enabling him to pay the cheque into his own general account. However, the Solicitor relied upon the document Mr Hes signed on 10 May 1993, a copy of which (B1) and a copy of a settlement statement, said to have been extracted from the payments file, were annexed to his statutory declaration. B1 was as follows: "T, Karoly Hes, hereby confirm that, at the time of settlement of the above proceedings, I did authorise my solicitor, Robert Coshott, to receive the settlement cheque and deposit same into Robert G Coshott & Associates General Account and to deduct out of pockets, costs and disbursements and pay the balance thereof to me." The Tribunal observed that similar authorities were obtained in the matters of Mrs Troha and Mrs Radonjic after the complaint was made and were put forward by the Solicitor as confirmation of a discussion he had with these clients at the time of settlement. The Solicitor submitted that B1 was evidence of his authority from Mr Hes. He obtained it from Mr Hes by telling him that he needed confirmation of his authority to pay the cheque into his general account to complete his accounting records, which were required by the Law Society. The Solicitor conceded in cross-examination that he had the authority signed for the purpose of assisting his case before the Tribunal and that he did not tell Mr Hes, Mrs Troha or Mrs Radonjic that he was being investigated by the Law Society. The Tribunal did not accept that "authority" obtained in this way after the event with a misleading explanation as to why it was required was adequate for the purposes of showing that the Solicitor had authority from the client to deal with the money in the way that he did. Accordingly, in the matters of Mr Hes, Mrs Radonjic and Mrs Troha, the Tribunal found that the Solicitor did not have the clients' "informed authority" and found that a wilful breach of s61 and s62 of the Act had been established. 16 UNREPORTED JUDGMENTS MRS RADONJIC Later in their reasons the Tribunal went back to the particulars about Mrs Radonjic and referred to that part of the Solicitor's statutory declaration of 14 February 1994 in which he gave evidence of a conversation with Mrs Radonjic following the settlement of the matter in the following terms: "T will get two cheques, one for $25,000 for you and the other for $12,500 for costs and disbursements payable to me which I will keep." The Solicitor stated that Mrs Radonjic agreed to this. On 24 August 1989 he wrote a letter to her, a copy of which he annexed, enclosing an authority for her to sign and return. Whatever may have been the nature of this proposed authority, the Tribunal said that no written authority had been produced although it was referred to as having been forwarded to the client in the letter of 24 August 1989. In these circumstances, the Tribunal was of the opinion that the Solicitor had not satisfied it that the authority was obtained when the client was fully informed of all the facts and circumstances and did not accept that such a document confirmed a previous authority which the Solicitor claimed he had. It repeated its conclusion that there had been a wilful breach of s61 and s62 of the Act. However the reasons continued: "One of the Tribunal members is of the opinion that as the Solicitor has given evidence of the authority which was subsequently confirmed in writing and where the witness has not been called then that member is not comfortably satisfied that the Solicitor has been in breach of the Act." It is not clear to me whether this minority view applied only to the case of Mrs Radonjic. Logically, no material distinction on this point is to be seen between the evidence in her case and in the cases relating to Mr Hes and Mrs Troha. MRS MARINO In the case of Mrs Marino, no document of subsequent confirmation was relied upon. Her proceedings were settled for $55,012.71, after deducting workers compensation payments of $14,987.29. The Solicitor said that the arrangement was that she would receive $45,000 and for this purpose he reduced his cost to $10,012.71. He said that the client agreed to this arrangement. He requested two cheques from the insurer but this was refused. He said that he had a conversation with Mrs Marino to the effect that the GIO would not give him two cheques and that as he did not operate a trust account, he asked permission to deposit the settlement cheque into his general account and draw the client a cheque for $45,000. According to the Solicitor, the client said: "I don't care so long as I don't get less than $45,000." The Tribunal said the statement attributed to Mrs Marino was, in its opinion, hardly an informed authority. It was doubtful whether the client would know the difference between a general account and a trust account. The Tribunal did not accept the Solicitor's assertion that the client gave an informed authority to pay the money into his trust account. Furthermore, the Tribunal did not believe that he had spoken to the insurer and requested two cheques in a matter that was settled inclusive of costs. The Solicitor conceded in cross-examination that there was no case where there was an inclusive-of-costs settlement and no workers' compensation redemption that the insurer provided two cheques on settlement. MRS TROHA The Tribunal returned again to the case of Mrs Troha. On or about 25 January 1990 the Solicitor received from the GIO a cheque for $10,000 with respect to a motor vehicle accident claim Mrs Troha had made. He deposited the cheque to WROBHOTT v THE COUNCIL OF THE LAW SOCIETY OF NEW SOUTH WALES (Shellié# JA) the credit of his general account at his bank. He asserted that when he received the cheque from the insurance company, he spoke to Mrs Troha on the telephone and she authorised him to pay the cheque into his office account and draw a cheque for $2,000 in her favour. Annexed "L2" was a copy of the confirmation Mrs Troha signed after the complaint was made. The Tribunal said: "The Tribunal makes the same findings in this matter as it has done in the matters of Hes and Radonjic where authorities were obtained from the clients after the Complaint had been filed. The Solicitor has stated that he told these clients that he needed confirmation of their authority to complete his accounting records which were required by the Law Society. There is no evidence that the Solicitor gave any other explanation to the clients, nor is there any evidence that this client understood the difference between the Solicitor's private account and a trust account and the Tribunal does not accept that the authority is a proper confirmation of instructions earlier given. It is noted that in the Solicitor's Declaration in the annexure to this matter there is a letter dated 23 November 1989 addressed to Mrs Troha enclosing "Settlement Statement/Memorandum of Costs" and there is no reference in this letter as to where the settlement moneys will be deposited." The Tribunal confirmed its findings of wilful breach. MRS TUFTEVSKA The Solicitor acted for Mrs Tuftevska in workers' compensation and common law proceedings arising out of an accident on 5 November 1984. On 31 May 1989 he received a cheque for $17,500 for the common law verdict inclusive of costs and clear of payments of compensation. This cheque he caused to be deposited in a general account with his bank. His explanation was that the insurer sent a single cheque, that he spoke to Mrs Tuftevska to the effect that the insurance company would only draw one cheque and that as he did not operate a trust account, this posed a problem. Mrs Tuftevska was alleged to have said: "Pay the $17,500 into your private account and draw me my cheque for $8,000." The Tribunal said that it was not satisfied there was any arrangement with insurers to draw two cheques other than in cases where there was a separation of the settlement moneys by way of redemption in the Workers' Compensation Court and common law judgment for the balance of the settlement moneys. "Furthermore, the Solicitor must have been well aware of the risk he ran in not operating a trust account and that in these circumstances it was incumbent on him to have specific instructions from his clients to pay cheques which included settlement moneys due to the client into his private account. Even if the Tribunal accepted the Solicitor's evidence of his conversation with Mrs Tuftevska, the Tribunal is not satisfied that this was a sufficient explanation to enable the client to give an informed authority which would enable the Solicitor to pay the insurance company cheque into his own account." Accordingly, the Tribunal found wilful breaches of s61 and s62. It seems plain that at least the majority of the Tribunal did not think that the Solicitor had discharged the onus of establishing that in each of these five cases the person, on whose behalf he received the money, had directed him to do otherwise than pay it to the credit of a general trust account. The majority were not persuaded that the contemporaneous statements which, according to the Solicitor, the clients made, or, in three cases, the confirmatory documents they 18 UNREPORTED JUDGMENTS later signed, in the circumstances in which they were obtained, amounted to, confirmed or evidenced any such direction. In each case they held there was no "informed authority". Of s62 the Tribunal said that the evidence relied upon by the Council was the same as that relied upon for the wilful breaches of s61 and it necessarily followed that if there was a breach of s61 there was a breach of s62. The Solicitor did not challenge this consequence. DETERMINATION OF THE SUPPLEMENTARY COMPLAINT Particular 1 On the supplementary complaint particular | para(i) and para(ii) the Tribunal found that the payments file at all times was under the Solicitor's control and that no conversation as suggested by Ms Bunguric and the Solicitor ever took place to the effect that Ms Bunguric had given the payments file to Mr Christensen. "The Tribunal finds, therefore, that the statements set out [in para(i)] are false and false to the knowledge of the Solicitor." The Tribunal was not prepared to make a finding that the Solicitor's account as to files being transported to Yugoslavia in April 1991 was false and dismissed that part of the supplementary complaint. With respect to para(iii) and para(iv) and the allegation that the file note dated 19 January 1990 was in fact made substantially later, in all probability, in 1994, and that the conversation with Mr Prelevic did not take place in the terms which the file note purported to record, the Tribunal was not prepared to find that the file note was made at a date later than it showed on its face but found that the Solicitor's reference to having a conversation with Mr Prelevic about "Wouldn't wait for cheq to be returned and two drawn as arranged" did not take place. The Tribunal found that the Solicitor received from Messrs Dexter Healey & Co, solicitors, a cheque for $45,000 payable to him being damages in the proceedings, which represented a settlement figure inclusive of costs. Without the client's authority, the Solicitor deposited this cheque to the credit of one of his general accounts on 17 January 1990, two days before the date of the file note. The Tribunal therefore found that the file note was false in that there was no conversation with Mr Prelevic concerning two cheques as arranged. With respect to para(v), para(vi) and para(vii) and the allegation that in his statutory declaration dated 14 February 1994, the Solicitor represented that the file notes appearing upon the memorandum of costs to Mrs Repole were true contemporaneous file notes when in fact they were fabrications, and had been produced by a process by which the Solicitor took a copy of the second page of the bill of costs, obliterated or masked the original file notes, photocopied the document so as to produce a copy without file notes and then wrote upon the document the file notes that now appear, the Tribunal did not accept that there was any discussion with Mrs Repole about separate cheques and to this extent the file note on p2 of the memorandum of costs was false. The Tribunal made no finding as to when the file notes were written on to the documents, found that part of the file note was false but dismissed the balance of this part of the supplementary complaint. Particular 2 As to the second particular of the supplementary complaint, propounding false documents, the Tribunal dismissed it in respect of the Repole file notes but found it made out in respect of the Prelevic file notes. WROBHOTT v THE COUNCIL OF THE LAW SOCIETY OF NEW SOUTH WALES (Shell JA) Particular 3 As to the third particular of endeavouring to mislead the Tribunal, the Tribunal said: "There is no direct evidence as to how Mr Christensen's business card came to be in the payments file and although the Law Society has invited the Tribunal to draw the inference that nobody but the solicitor had any interest in inserting the business card in the file, the Tribunal is not prepared to make such a finding and dismisses this aspect of supplementary complaint. However the Tribunal having found that the solicitor had possession of the payment file at all relevant times and that his evidence about discovering the payment file for the first time on the day before the first day of hearing was false makes the finding that in this regard the solicitor endeavoured to mislead the Tribunal." DETERMINATION OF THE 1996 INFORMATION The 1996 information was heard by the Tribunal differently constituted. Ground | concerned the signed confirmations by Mr Hes, Mrs Radonjic and Mrs Troha (annexures B1, H2 and L2). The Tribunal was not prepared to draw the inference that Mr Hes and Mrs Radonjic in signing the confirmations did so with an inaccurate understanding of their effect. About Mrs Troha, the Tribunal said that she had not been given the real reason or an accurate explanation why the Solicitor required the confirmation, namely to rebut the allegation that he had wilfully breached s61. The Tribunal determined that the Solicitor falsely represented to the former Tribunal that Mrs Troha signed the confirmation with an accurate understanding of its effect and by so doing endeavoured to mislead the Tribunal. The second ground of complaint related to the same three clients and Mrs Repole. The Tribunal was comfortably satisfied that the Solicitor gave Mrs Repole a false account of the purpose of the document he requested her to sign and in so doing he endeavoured to mislead her, and was comfortably satisfied that the Solicitor attempted to mislead Mrs Troha. The Tribunal was not comfortably satisfied that the Solicitor attempted to mislead Mrs Radonjic and Mr Hes about the substantive effect of the documents. TRIBUNAL ORDERS On the 1993 complaint and the supplementary complaint the Tribunal in March 1995 ordered that the name of the Solicitor be removed from the roll of solicitors and that he pay the Council's costs of the complaint and the supplementary complaint. That order was stayed by this Court on the filing of the appeal. On the 1996 information the Tribunal in June 1997 ordered that the name of the Solicitor be removed from the roll of legal practitioners and that he pay the Council's costs. APPEAL AND COST-APPEAL The Solicitor appealed from both determinations. In the first appeal the Council, by leave of the Court, cross-appealed out of time against that part of the determination by which the Tribunal said that it was not prepared to find that the file note dated 19 January 1990 was made at a later date than it showed on its face. The two appeals and the cross-appeal were heard together. When the first appeal was instituted on 13 April 1995, s171F(4) of the Act provided that an appeal was 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, might be 20 UNREPORTED JUDGMENTS given. The Courts Legislation Further Amendment Act 1995 repealed s171F(4). Accordingly, the second appeal, which was instituted on 30 June 1997, is governed by s75A of the Supreme Court Act. FIRST APPEAL - GROUND OF APPEAL This appeal did not proceed, as it might have done, by the recalling of evidence or the presentation of fresh evidence, but simply by reference to the evidence which was before the Tribunal. In Re Hodgekiss [1962] SR (NSW) 340, the Full Court heard an appeal under s78 of the Legal Practitioners Act 1898 from an order of the Statutory Committee. The section provided that such an appeal should be "in the nature of a rehearing". Owen J, with whose judgment Maguire J concurred, said, at 343: "Tn determining, however, what are the facts on which a finding of professional misconduct has been based, the findings of the Statutory Committee should be regarded by the Court in the same way as those made, for example, by a judge sitting without a jury. The Committee may, and frequently does, have the opportunity, which is denied to the Court, of seeing and hearing the witnesses, and when the Court comes to consider and decide, for itself, what are the facts established by the evidence, that is a consideration which must be borne in mind. But it is for the Court to make up its own mind what facts are proved by the evidence and what inferences should be drawn from those facts, and it would not, in my opinion, be proper for it merely to satisfy itself that there is evidence which could justify the findings against which the appeal is brought. It must make up its own mind what the facts are. To do otherwise would be to disregard the legislative direction that the appeal shall be in the nature of a rehearing." In a case such as the present where witnesses have not been recalled or called before the Court the approach stated by Owen J is the approach the Court should, in my opinion, take; see also Law Society of New South Wales v Foreman (1994) 34 NSWLR 408 at 410 and 440; Sedgwick v Law Society of New South Wales (1994) Disciplinary Reports No 3, 26 at 27. Before coming to the grounds in the notice of appeal filed on 13 April 1995, I make brief mention of a ground, first relied upon in the appellant's written submissions filed on 29 September 1997, objecting to the admission of the evidence of Mr Christensen in the investigator's report and in Mr Christensen's statutory declarations on the ground that these documents contained or referred to evidence obtained illegally or improperly, because the Council had not approved Mr Christensen's appointment until 25 February 1993. The Solicitor submitted that this material should be excluded "in the exercise of the Court's discretion". The point was not taken when the evidence was tendered in the Tribunal or at any other tune before the Tribunal and was not a ground in the notice of appeal. Mr Oakes declined to apply to amend his notice of appeal to include this ground. Accordingly, I do not think the Court should consider it further. GROUNDS 5, 6 AND 7 The Solicitor contended that the Tribunal erred in finding that any breaches of s61 and s62 of the Act by the appellant in respect of his clients were wilful. In In re City Equitable Fire Insurance Co Ltd [1925] 1 Ch 407 at 434, Romer J, in the context of a company's articles of association which excused company officers from liability for neglects or defaults unless by or through "their own wilful neglect or default", said: WROBHOTT v THE COUNCIL OF THE LAW SOCIETY OF NEW SOUTH WALES (Shelfst JA) "An act, or an omission to do an act, is wilful where the person of whom we are speaking knows what he is doing and intends to do what he is doing. But if that act or omission amounts to a breach of his duty, and therefore to negligence, is the person guilty of wilful negligence? In my opinion that question must be answered in the negative unless he knows that he is committing, and intends to commit, a breach of his duty, or is recklessly careless in the sense of not caring whether his act or omission is or is not a breach of duty." As his Lordship, said the difficulty is not so much in ascertaining the meaning of the adjective "wilful", as in ascertaining precisely what is the noun to which the adjective is to be applied. In the Court of Appeal, Warrington LJ, at 525 and Sargant LJ at 528-9 adopted what Romer J said. In Re Hodgekiss at 353, Hardie J applied the principle so stated in determining whether there had been a "wilful failure" on the part of a solicitor to comply with sections of the Legal Practitioners Act 1898. At 354 his Honour said: "Tt is thus essential in an inquiry as to whether or not there have been wilful breaches by a solicitor of the provisions of s41 and s42 to examine the facts and circumstances relevant to his state of mind, knowledge and intention at the material dates." In the context of contempt, four members of the High Court in AMIEU v Mudginberri Station Pty Ltd (1986) 161 CLR 98 at 113 said: "Tt follows that a deliberate commission or omission which is in breach of an injunctive order or an undertaking will constitute such wilful disobedience unless it be casual, accidental or unintentional." The Solicitor's case proceeded on the basis that at all material times he was aware of the relevant provisions of s61 of the Act. For this reason, no doubt, he said that in each case he sought his client's direction before paying moneys otherwise than into a general trust account. If the Tribunal was right in concluding that in the eight cases particularised the Solicitor never obtained such a direction, the finding that he paid the money into his own accounts in wilful contravention of s61(1) was inevitable. Counsel accepted that the wilfulness of a contravention of s62 stood or fell with the wilfulness of the contravention of s61(1). The question of wilfulness is subsumed in the question of whether the Tribunal's findings that the Solicitor had "no authority" or "no informed authority" to pay the client's money otherwise than into a general trust account were correct. GROUNDS 3 AND 4 The Solicitor contended that the Tribunal erred in finding that he did not have the informed authority of his clients to pay money into an account other than a general trust account, and erred in failing to find that each of the clients had directed the appellant to pay money other than to the credit of a general trust account. The Solicitor appealed against the Tribunal's conclusion about the want of "informed authority" by submitting that he did not mislead his clients by asking them to give him confirmatory authority in the way he did. However this may be, the question remained whether the Solicitor established to the satisfaction of the Tribunal that a direction had been given by each of the clients mentioned to him to pay the money otherwise than into a general trust account, namely into one of the Solicitor's general accounts. 22 UNREPORTED JUDGMENTS In my opinion, no reason has been advanced for interfering with the Tribunal's conclusion that the Solicitor did not have Mr Prelevic's authority on 17 January 1990 to deposit the cheque received on his behalf to the Solicitor's private account and that accordingly, there was a wilful breach of s61(1) and s62. The Tribunal, having heard Mr Stanisavljevic's evidence, found that he did not sign the document said to authorise the deposit made in that case. I agree with the Tribunal that it was improbable that the insurance company would agree to draw two cheques, one payable to the Solicitor, when his costs had not been assessed or taxed. The onus was on the Solicitor to show that the client had given him the necessary direction. I agree that he failed to do this and accordingly it follows, in the circumstances, that his contravention of s61 and s62 was wilful. Mrs Repole did not give evidence. However, she did refuse to sign the confirmation of authority belatedly sent to her. I am not satisfied, substantially for the reasons given by the Tribunal, that the Solicitor discharged the onus of showing that he had obtained the necessary direction from her before the cheque was deposited. Again, I agree with the conclusion that there was a wilful contravention of the sections. The other five cases I find more difficult. In each of them the Tribunal found there was no informed authority. In the cases where a written confirmation had been obtained this was because the majority, at least, found, as the Solicitor conceded, that he had told the client, when asking him or her to sign the form, not that a complaint had been lodged against him by the Law Society, but that he required the authority "to complete my accounting records because they are required by the Law Society". A direction induced by the Solicitor's fraud or misrepresentation or based on a mistake in the sense that the client did not understand what he or she was doing, would be no direction for the purpose of s61(2)(a). What the Solicitor was found to have misrepresented was the reason why he needed the confirmation. Undoubtedly, his fiduciary position imposed on him the duty of making a full and not a misleading disclosure of facts known to him when advising his client; Nocton v Ashburton [1914] AC 932 at 965. However, the confirmation itself was not a direction but merely some evidence that before the relevant cheque was deposited by the Solicitor to his own account, such a direction had been given. Had the client been told the real reason why the Solicitor wanted the confirmation document signed, the client may have been more circumspect before signing it and may have reflected upon the truth of what it said more thoroughly. But this does no more than detract from the weight of the document as evidence that a direction had been given. However, the Tribunal appeared to treat the circumstances in which the confirmation was signed as indicative of a want of "informed authority" at the time the deposit was made. In this, in my opinion, the Tribunal erred. There is no evidence that any of the three persons who signed the confirmation document did not understand what they were signing. More importantly, there is no evidence that at the time the authority or direction of which the confirmation speaks, the authority or direction was induced by the Solicitor's misrepresentation or made under a mistake of the sort I have described. The Solicitor gave evidence that in each case he had received such authority. About this he was not cross-examined. In none of the cases of Mr Hes, Mrs Radonjic and Mrs Troha did the Tribunal reject this evidence. The reasoning focused on the confirmation document and treated that itself as the direction or authority relied upon. This it was not. The only additional matter is that in the case of Mrs \WROBHOTT v THE COUNCIL OF THE LAW SOCIETY OF NEW SOUTH WALES (Shel2S JA) Radonjic the written authority referred to in the Solicitor's letter of 24 August 1989 had not been produced. One member of the Tribunal in her case, at least, was of opinion that as the Solicitor had given evidence of the authority which was subsequently confirmed in writing and the client not having been called the breach had not been proved to that member's comfortable satisfaction. In my opinion, the Tribunal or the majority members of it, misunderstood the nature and effect of the confirmation. The Solicitor gave evidence of a direction or of authority from the client and produced a document from the client which confirmed this. The client was not called to contradict this. No explanation was given for this and in this state of the evidence I am satisfied that the Solicitor's account must be accepted so that the exception in s61 (2) applied in each case. In the case of Mrs Marino, the Solicitor said that he had a conversation with his client wherein he asked permission to deposit the settlement cheque into his general account and draw the client a cheque for $45,000. Mrs Marino stated: "I don't care so long as I don't get less than $45,000." The Solicitor was not cross-examined about this conversation, nor was Mrs Marino called to deny it or to say that she did not understand that she was being asked to give or was giving permission for the Solicitor to deposit the cheque into his general account. The Tribunal said that this was "hardly an informed authority". It was of opinion that it was doubtful whether the client would know the difference between a general account and a trust account. But there was no evidence of this and no reason advanced why Mrs Marino would not have been called to say that she did not understand what she was being asked, if that were the fact. Although the Tribunal said that it did not believe the Solicitor's explanation that he had spoken to the insurer requesting two cheques in a matter that was settled inclusive of costs, it made no finding that the conversation with Mrs Marino concerning the deposit of the cheque did not take place, merely that the consent was not an informed authority. In my opinion, in this case also, the Solicitor's evidence must be accepted that a direction had been given and accordingly, that the exception in s61(2) (a) applied. The Solicitor's evidence was that Mrs Tuftevska told him to pay the cheque for $17,500 received from the defendant into his private account and draw her "my cheque for $8,000". About this the Solicitor was not cross-examined. Again, the Tribunal said it was not satisfied there was any arrangement with insurers to draw two cheques and that the Solicitor must have been well aware of the risk he ran in not operating a trust account. The Tribunal did not expressly reject his evidence of the direction Mrs Tuftevska was alleged to have given, but rather proceeded on the basis that the conversation was not a sufficient explanation to enable the client to give an informed authority. For these reasons, once again, in my opinion, in the absence of evidence from Mrs Tuftevska, the Solicitor's account must be accepted that a direction had been given by the client and accordingly, that the exception in s61(2)(a) applied. I emphasise that in the course of his cross-examination, there was no direct challenge to the Solicitor's account of the contemporaneous discussions with his clients. The cross-examination was directed to the circumstances in which the confirmations were obtained. In addition to grounds 3 and 4, what I have said covers ground | of the notice of appeal about informed authority. So far as ground 2 is concerned, the Tribunal rightly proceeded on the basis that the Solicitor bore the onus of establishing the exception. No other or different arguments were advanced than those I have dealt with. 24 UNREPORTED JUDGMENTS GROUND 8 The Solicitor advanced no argument in support of this ground of appeal. GROUNDS 9 AND 10 The Solicitor contended that the Tribunal erred in finding that the statements particularised in paral(i) of the supplementary complaint were false and false to his knowledge. The Solicitor submitted that no basis whatever could be found for the Tribunal's finding that the Solicitor's statement "I am informed by Ms Bunguric and verily believe that she gave the payments file to Mr Christensen and he did not return it to her' was false. The Tribunal, in my opinion correctly on the evidence, accepted Mr Christensen's evidence that Ms Bunguric never gave him the payments file. Accordingly, it rejected her evidence that she did. The Tribunal also found, again in my opinion correctly, that the payments file which the Solicitor produced or "discovered" on 13 February 1994 had at all times been under his control. The Tribunal reviewed the circumstances surrounding the production of the payments file to Mr Wales on 14 February 1994 and the Tribunal concluded by saying: "Tn view of the circumstances surrounding the investigation into the Solicitor's practice it was obvious to the Solicitor that the Investigator had raised the question as to whether he had clients authority to pay settlement moneys into his private accounts and the Tribunal does not know why the payment file or the documents in the payment file was not made available to Mr Christensen. However the Tribunal is of the opinion that the payment file at all times was under the Solicitor's control and that no conversation as suggested by Mrs Bunguric and the Solicitor ever took place to the effect that Ms Bunguric had given the payment file to Mr Christensen. The Tribunal finds, therefore, that the statements set out above are false and false to the knowledge of the Solicitor." The first of these quoted paragraphs, relevantly, was only a finding that the statement that Ms Bunguric informed the Solicitor that she gave the payments file to Mr Christensen and he did not return it to her was false (particular 1(i)(a)). The Tribunal did not expressly deal with the statement by the Solicitor that he was not aware that Ms Bunguric had given the payments file to Mr Christensen until she came to Australia in December 1993. Nor did it deal with the Solicitor's statements in para(c) and para(d) that searches failed to reveal the file and that the Solicitor discovered it on 13 February 1994 in the file of one of his client's, Mr Santucci, a file which had been delivered to Mr Christensen. As to the serious allegation that the statements were false to the knowledge of the Solicitor, the Tribunal did no more than find "therefore", that the statements were false to his knowledge. The cross-appeal was not directed to these findings. The Tribunal, in its reasons, recited material which leads me to suspect that the Solicitor's account about his knowledge of the whereabouts of the payments file should not be accepted. Mr Wales, in the course of his argument on the appeal, pointed to some significant matters. 1. On 14 May 1993 the Solicitor wrote to Mr Roles saying that if Mrs Repole made a written request for an itemised solicitor and client bill of cost to be prepared "I shall do so as quickly as possible". The letter contained no hint that her file was not available or that the Solicitor would have to retrieve it from Yugoslavia. WROBHOTT v THE COUNCIL OF THE LAW SOCIETY OF NEW SOUTH WALES (Shel2& JA) 2. In 1993 the Council required the Solicitor to attend before the Tribunal to produce his files and financial records in relation to each of the persons in respect of whom the 1993 complaint had been made. On 9 June 1993, when called upon, he produced no such documents and when questioned about them said "As far as I can determine they are still in Yugoslavia". He said he had sent all the documents and files to Yugoslavia and "then of course the holocaust broke out there and I can't get them back". He well knew that the files were required to be produced. In his statutory declaration of 22 January 1994 he made no reference to their whereabouts. On the evening of 14 February 1994 the Solicitor produced nine of the files to Mr Wales. In his statutory declaration of the same date the Solicitor said that these files had been brought back to Australia in December 1993. The Tribunal described the story as a most extraordinary one. It was extraordinary that files of this sort should have been sent to Yugoslavia in the first place and improper that the Council was not advised immediately if they were returned to Australia in December 1993. 3. The Solicitor said that his mother-in-law brought the files to Australia with her on 23 December 1993. She made a statutory declaration saying that her husband had given her two plastic bags of documents to bring with her and that she had given the two bags to the Solicitor on her arrival on 23 December 1993. The Tribunal said that it was extraordinary that on the second day of the hearing, 15 February 1994, the Solicitor's mother-in-law was in Australia and the Council sought to cross-examine her yet the Solicitor elected not to call her at that time or make her available for cross-examination despite the fact that he was put on notice by counsel for the Law Society that the whereabouts of the files would be very much a live issue. Nevertheless, on the evidence available the Tribunal was not prepared to make a finding that the Solicitor's account as to the files being transported to Yugoslavia in April 1991 was false and dismissed that part of the supplementary complaint. As I have said against this there was no cross-appeal. In O'Reilly v Law Society of New South Wales (1988) 24 NSWLR 204, Kirby P at 208 stated: "A high degree of satisfaction is required before the conclusion [of deliberate lying by a solicitor to the Committee] may finally be accepted. It is important to observe the distinction between preferring the evidence of another witness or doubting the evidence of the solicitor (on the one hand) and reaching the affirmative opinion that the solicitor has deliberately lied to the Committee (on the other)." At 230 Clarke JA said: "What was said was that the appellant had lied to, and deceived, the Law Society and the Statutory Committee. It should be said at once that a finding that a solicitor has deceived a court or Tribunal provides compelling evidence of his unfitness to practise....... But care must be taken in reaching a conclusion that the solicitor has lied or deceived the tribunal. In particular there is a need to distinguish carefully between cases in which the evidence of a solicitor is not accepted and those in which there is an affirmative finding that he has deliberately lied or sought to mislead the tribunal. It goes without saying that a tribunal needs to be satisfied to that degree of persuasion which is necessary to satisfy the Briginshaw test before it can properly make a finding that a solicitor has lied or deliberately deceived the tribunal." In Smith v New South Wales Bar Association (1992) 176 CLR 256 at 268, four members of the High Court remarked: 26 UNREPORTED JUDGMENTS "But, as a matter of logic and common sense, something more than mere rejection of a person's evidence is necessary before there can be a positive finding that he or she deliberately lied in the giving of that evidence." In its reasons for determination, the Tribunal did not refer to this note of caution. Nothing in these reasons persuades me that a finding that the Solicitor deliberately lied when making each of the four statements was justified. I do not think this finding can be reached applying the standards set out in O'Reilly simply because, as it was put in particular (1) (i) of the supplementary complaint, between April 1991 and 13 February 1993 the Solicitor had possession, custody and control of the payments file or because the Tribunal did not accept his evidence that Ms Bunguric told him that she gave the payments file to Mr Christensen. In my opinion, the appeal against the findings on this particular of the supplementary complaint should be upheld. GROUNDS 11, 12 AND 13 Under these grounds the Solicitor challenged the Tribunal's findings against him about the file note dated 19 January 1990 taken from the Solicitor's file of Mr Prelevic. The Council cross-appealed against the Tribunal's failure to find that the file note purportedly dated 19 January 1990 was made on a date later than appeared on its face. The Tribunal pointed out that it was significant that the cheque from the insurance company had already been banked on 17 January. While not prepared to find that the file note was made at a date later than it showed-on its face, the Tribunal found that the conversation with Mr Prelevic the Solicitor referred to, "wouldn't wait for chq to be returned and two drawn as arranged", did not take place. The Tribunal "therefore" found that the file note was false in that there was no conversation with Mr Prelevic concerning two cheques "as arranged". This finding related only to that part of the particulars about this file note contained in para(iv) of particular 1 ''the conversation with Mr Prelevic did not take place in the terms which the file note purports to record". The Tribunal made no finding that it was "wilfully false". The finding that the entry was false was, in my opinion, on the evidence before the Tribunal correct. This is a limited finding dealing with part only of the complaint unfavourably to the Solicitor. Mr Oakes argued with force that if the file note was written on 19 January 1990 there was no reason for the Solicitor to falsify its contents. Mr Wales, on the other hand, pointed to the fact that in his statutory declaration of 22 January 1994 the Solicitor, in dealing with the matter of Mr Prelevic and describing the occasion when Mr Prelevic attended at his office, did not stipulate the date when that occurred and made no reference to the file note. Mr Prelevic's earlier statutory declaration of 27 May 1993 did not refer to this attendance on the Solicitor but in his second statutory declaration of 11 February 1994, in answer to the Solicitor's statutory declaration of 22 January 1994, Mr Prelevic said that on 19 January 1990 he had attended at his office when asked to do so by the Solicitor's secretary and upon his arrival found a cheque in his favour waiting for him. The Solicitor, in his statutory declaration of 14 February 1990, did not refer to Mr Prelevic's statutory declaration but annexed the file note of 19 January 1990. Iam comfortably satisfied that the entry in the file note purporting to be of 19 January 1994 was false. The Solicitor but two days before had, as he agreed, prepared the deposit slip for a single cheque from the insurer. Mr Prelevic swore that he attended the Solicitor's office at the Solicitor's request and received a WROBHOTT v THE COUNCIL OF THE LAW SOCIETY OF NEW SOUTH WALES (ShelB# JA) cheque for the amount due to him. Mr Prelevic wrongly thought the cheque was a bank cheque. Otherwise, and despite the concession that he suffered from some form of mental illness in 1990, I am satisfied, particularly in light of the falsity of the file note, that his evidence should be accepted. This being so there can be no explanation for the Solicitor to make a false file note on 19 January 1990, the day he saw Mr Prelevic, and every reason to do so later in an attempt to contradict Mr Prelevic's evidence as it emerged on 11 February 1994. Unfortunately for him, the Solicitor, having already prepared a false account of what occurred on that day in his office, forgot that the insurer's cheque had been deposited at the bank on 17 January 1990. This conclusion raises great suspicion about Ms Bunguric's statutory declaration and the circumstances in which it was prepared. The Solicitor was cross-examined about the visit of Mr Prelevic. Having carefully read that cross examination and paying due regard to the seriousness of the allegation, I am comfortably satisfied that in paral2(g) of his statutory declaration of 14 February 1994, the Solicitor represented that the annexed file notes for 19 January 1990 were a contemporaneous or relatively contemporaneous record of a conversation with Mr Prelevic, when he knew that the file notes were made substantially later, probably in 1994, and knew that the conversation with Mr Prelevic did not take place in the terms which the file notes purported to record. I am comfortably satisfied, accordingly, that the Solicitor wilfully made a false statement in his statutory declaration, propounded a false document and endeavoured to mislead the Tribunal. I would reject grounds 11, 12 and 13 of the appeal and allow the cross-appeal. No specific ground of appeal or argument was addressed to the Tribunal's finding against the Solicitor that because the Tribunal did not accept that there was any discussion with Mrs Repole about separate cheques, to that extent the file note on exhibit P was false; para(vii) of particular 1. In any event, this limited finding on this part of the supplementary complaint was, in my opinion, correct. GROUND 14 This ground was that the Tribunal erred in finding that the Solicitor endeavoured to mislead the Tribunal by giving false evidence about discovering the payments file on the day before the first day of the hearing. I have set out the paragraph in which the Tribunal dealt with this allegation after referring to the Solicitor's evidence and setting out part of his cross-examination. I have already dealt with the allegation that the Solicitor's evidence about discovering the payments file for the first time on the day before the first day of hearing was false. I am not satisfied that the Tribunal had earlier made such a finding or, if it did, justified such a finding in its reasoning process. Applying the appropriate test I do not think it was open to the Tribunal to find that the statement was false to the knowledge of the Solicitor at the time that he made it and, accordingly, I do not think it was open to find that the Solicitor endeavoured to mislead the Tribunal. I would uphold this ground of appeal. GROUNDS 15, 16, 17 AND 18 Ground 15 that the Tribunal erred in refusing to dismiss the supplementary complaint and the original complaint other than in respect of particulars 1(g) and (i) on the submission that there was no case to answer, was not the subject of any 28 UNREPORTED JUDGMENTS submissions to the Court and I do not think the Court should consider it further. Grounds 16, 17 and 18 related to the Tribunal's orders, including the costs order, which must necessarily be reviewed. PENALTY AND COSTS In the light of my conclusion that in large measure the appeal should be upheld and that the cross-appeal should be upheld, it is necessary to deal with penalty and costs on the basis of those conclusions. In my opinion, the Tribunal was right to find that the Solicitor wilfully contravened s61 and s62 of the Act as particularised in the cases of the clients, Mr Prelevic, Mr Stanisavljevic and Mrs Repole. These are serious charges. However, as Mr Oakes pointed out, this was not a case in which it was alleged that the Solicitor had been guilty of misappropriation or had personally profited from his contraventions. In my opinion, the Tribunal was right to find that the statement that Ms Bunguric informed the Solicitor that she gave the payments file to Mr Christensen and he did not return it to her was false and that the 19 January 1990 file note and the file note on exhibit P were false. In respect of all other matters the Tribunal found adversely to the Solicitor, he succeeded on this appeal. However, in my opinion, the Council's complaint that the Solicitor by claiming the file notes purporting to be of 19 January 1990 were a contemporaneous note of a conversation which took place was guilty of wilfully making a false statement in a statutory declaration, propounding a false document and endeavouring to mislead the Tribunal. The seriousness of the charge is not enhanced by the fact that it can be particularised in three different ways. However, it is a very serious charge indeed. In the Law Society of New South Wales v Foreman, Giles AJA at 471-2, spoke of the great importance in the conduct of the profession of a solicitor, particularly in relation to litigation, that other legal practitioners should be able to accept without question the honesty of their colleagues and that the Court should be able to accept without question the honesty of its officers. In the matter of the file note the Solicitor here demonstrated dishonesty of a grave land. Not only did the Solicitor falsely describe what had occurred between him and his client but sought, when confronted by the client's evidence, to bolster his position by producing a document which falsely stated what had happened and by manufacturing the document so as to give the impression of authenticity derived from its appearing to be contemporaneous. In Foreman's case at 412, Kirby P, as his Honour then was, referred to the judgment of Isaacs J in Incorporated Law Institute of New South Wales v Meagher (1909) 9 CLR 655 at 681 and said: "Tt is still true today, as it was in 1909, that high standards are expected of legal practitioners, particularly in their dealings with clients and the courts. This is so that members of the public, litigants, other practitioners and the courts themselves can have confidence in the integrity of those who enjoy special privileges as legal practitioners." After careful consideration and bearing in mind the Solicitor's good record and the fact that he no longer practises, I have come to the conclusion that the charges found against him mean that he is no longer fit to continue in practice and his name was rightly ordered to be removed from the roll of solicitors. Accordingly, I would not disturb the Tribunal's order to that effect. Before the Tribunal the Council succeeded on some only of the grounds of complaint it particularised. However the Solicitor defended all grounds and an order was made that his name be removed from the roll of solicitors. Nothing was WROBHOTT v THE COUNCIL OF THE LAW SOCIETY OF NEW SOUTH WALES (Shel29 JA) put to the Court to suggest that the Tribunal in ordering the Solicitor to pay the Council's costs of both the complaint and the supplementary complaint involved any error in the exercise of its discretion. The result of this appeal is that a significant number of grounds that the Tribunal found proved, it should not have found proved but that in respect of the file notes of 19 January 1990 the Tribunal should have found that the Solicitor wilfully made a false statement in his statutory declaration, propounded a false document and endeavoured to mislead the Tribunal. - In the result the order that his name be removed from the roll of Solicitors was appropriate. In these circumstances I would not interfere with the order for costs that the Tribunal made. Moreover, in my opinion, the Solicitor should pay the Council's costs of the appeal and of the cross-appeal. SECOND APPEAL - GROUNDS OF APPEAL Two things should be observed at the outset in this matter. First, the Council abandoned that part of ground 1 of the information which alleged that the Solicitor in fact misled the previous Tribunal. Secondly, the Solicitor was not called to give evidence in response to the Council's case. By consent the Council tendered parts of the Solicitor's statutory declaration of 14 February 1994 containing the written confirmations of earlier instructions the subject of the complaints of professional misconduct. Neither Mr Hes nor Mrs Radonjic was called to give evidence. The Tribunal was not prepared, having referred to O'Reilly and Smith v New South Wales Bar Association, to draw the inference that Mr Hes and Mrs Radonjic, in signing the confirmations, did so with an inaccurate understanding of their effect. The Council tendered an affidavit sworn by Mrs Troha and dated 17 November 1995 in which, in para4, she said she had no recollection of the Solicitor seeking instructions to bank any cheques from the GIO into his office account. In para5 and para6 of her affidavit, she related a telephone conversation she had with the Solicitor, to the best of her recollection, in about mid-1993. During her cross examination she stated her recollection thus: "Q. And what is that recollection? A. That he said, 'Hello, this is' - that he is Robert, and he started to talk about how he was and how his family were and his interest in horse racing, and then he asked me did I recall the letter I had signed stating that I would not make another claim against the GIO and I said, "Yes, I do', because that was sent to me with the cheque after the case had been completed, and I said, "Yes, I do', and he said, "Would you mind signing another one?' So I said, 'I don't mind', and he sent me a copy and I signed it." The Tribunal found that Mrs Troha was not given the real reason or an accurate explanation why the Solicitor required the confirmations, namely, to rebut the allegation that he had wilfully breached s61. The Tribunal said: "Tn respect of Mrs Troha's evidence she did not recall if the confirmation was what she in fact authorised the Solicitor to do when her case had been settled. Mrs Troha did not recall if the Solicitor said words to the effect that he needed to complete his accounting records with the Law Society and that was why he was sending her the documents, although she conceded it was possible he had used those words. Mrs Troha was told by the solicitor that his reasons for requiring the confirmation was 'because I have left being a solicitor. Your paperwork will have to go to different solicitor. I have misplaced the document.' 30 UNREPORTED JUDGMENTS Mrs Troha was not given the real reason or an accurate explanation why the solicitor required the confirmations, namely, to rebut the allegation that he had wilfully breached s61. Nevertheless the solicitor proceeded to put Mrs Troha's confirmation before the former Tribunal in circumstances where the only inference, it seems to us, that could be drawn by the former Tribunal was that she had signed the confirmations with an accurate understanding of its effect. After considering all of the material including Mrs Troha's confirmation, the transcript before the former Tribunal, the evidence before the former Tribunal and the evidence before this Tribunal, this Tribunal determines that the Solicitor when putting this signed confirmation before the former Tribunal, represented to the former Tribunal, that the person signing it did so with an accurate understanding of its effect. Such representation was false. The Tribunal finds that the solicitor misled Mrs Troha when signing the confirmation as to its purpose and effect. The Tribunal is comfortably satisfied in respect of Mrs Troha's confirmation that the Solicitor endeavoured to mislead the Legal Profession Disciplinary Tribunal." Grounds 2 to 5 and 8 of the notice of appeal challenged this conclusion in various ways. The substance of the Solicitor's submission was that, in putting the signed confirmation of instructions to the former Tribunal, the Solicitor was doing no more than give evidence of those instructions. The confirmation was not suggested to be contemporaneous with the instructions. The document was unambiguous. There was no suggestion that Mrs Troha did not read and understand it. The Solicitor submitted that on the evidence it was not open to the Tribunal to find that she was misled as to its effect. A further particular of this ground of complaint was that in putting the documents before the Tribunal, the Solicitor was representing to the Tribunal that the person signing it did so with an accurate understanding of its effect and that this representation was false in that the Solicitor misled the person signing the document as to its purpose and effect. With the greatest respect, there seems some confusion in this particular. The effect of the document can be gleaned from its terms. It was a confirmation of an earlier authority to the Solicitor to receive the settlement cheque and deposit it into his general account for the purposes described. No suggestion was made that Mrs Troha was misled about that. In her affidavit Mrs Troha deposed that the Solicitor had said: "Do you remember the piece of paper I got you to sign when the case was finished which said that you would not come back and make a further claim against the GIO for the same accident?" She replied "Yes" and the Solicitor said: "Because I have left being a solicitor your paperwork will have to go to a different solicitor. I have misplaced that document. Would you mind signing another one?" Mrs Troha said "I don't mind" or words to that effect. A short time thereafter she received, without a covering letter but with a "with compliments" slip, a document which she and her husband signed and returned to the Solicitor. This document she identified as annexure "L2". During her cross examination, which I have quoted, she said that the Solicitor, after referring to "the letter I had signed stating that I would not make another claim against the GIO", asked her would she mind signing another one. She had the confirmation document put to her and agreed she had read it. She was then asked: WROBHOTT v THE COUNCIL OF THE LAW SOCIETY OF NEW SOUTH WALES (Shelf JA) "Q. And that is in fact confirmation of what you in fact authorised him to do when your case had been settled, is it not? A. I don't recall. Q. That certainly is the document that you signed, you have stated before that that is your signature and it is witnessed by your husband? A. That is the document he sent me the second time, yes. Q. And you recall that the conversation that you had or part of the conversation you had when he telephoned you in mid 1993 was to the effect that he needed you to sign another document? A. That is right, yes. Q. Mrs Troha, I put to you that in the course of that conversation Mr Coshott said to you words to the effect that he needed to complete his records with the Law Society, his accounting records with the Law Society and that is why he was sending that document. Do you recall that conversation? A. No, I don't recall it. Q. Is it possible that he said that or and you just don't recall it? A. It is possible." Undoubtedly, Mrs Troha's evidence is confused. But her evidence was that the Solicitor misrepresented to her the purpose for which he required the confirmation. The Solicitor never came forward to contradict this evidence. In my opinion, no ground is shown for interfering with the Tribunal's conclusion. I am satisfied it was correct. Ground 2 of the information was that the Solicitor endeavoured to mislead certain former clients, which included Mrs Troha and Mrs Repole. The Tribunal dismissed this complaint in respect of Mrs Radonjic and Mr Hes. The Tribunal accepted Mrs Troha's evidence that the Solicitor told her that the purposes for which he wanted the document was "because I have left being a solicitor. Your paperwork will have to go to a different solicitor. ' ve misplaced that document." The Tribunal said it was comfortably satisfied that the Solicitor attempted to mislead Mrs Troha. "Although Mrs Troha conceded the Solicitor may have said he needed to complete his records with the Law Society and that was why he was sending the document, such explanation, was not an accurate reason for the obtaining of the confirmation. This being so, the Tribunal finds that the Solicitor endeavoured to mislead Mrs Troha." Mrs Repole also gave evidence of an occasion in April or May 1993 when Mr Coshott telephoned her and said: "I am ringing you because I have to ask you to sign a letter so that the insurance company will pay me." She said: "Yes." She gave a not inconsistent account when cross-examined about the conversation. She insisted that no reference was made to confirmation of an authority to pay $10,000 for his costs to complete his accounting records which were required by the Law Society. She was adamant that he said "just sign the letter for paying the insurance company." The Tribunal said: "As the Tribunal had the opportunity of observing Mrs Repole giving evidence in the proceedings and notwithstanding some confusion in Mrs Repole's cross examination (English is not her first language) the Tribunal is satisfied that the evidence of Mrs Repole is to be accepted. It is noted that the solicitor did not give evidence. The Tribunal is therefore comfortably satisfied that the Solicitor gave Mrs Repole a false account of the purpose of the document he requested her to sign and in so doing he endeavoured to mislead her." Grounds of appeal 6, 7 and 8 particularly are directed to the determinations that the Solicitor endeavoured to mislead Mrs Troha and Mrs Repole. However, I see no basis upon which this Court can interfere with the findings of fact that 32 UNREPORTED JUDGMENTS the Tribunal made and those findings, in my opinion, justify their conclusion. I am satisfied they were correct. Accordingly, I would reject these grounds of appeal. Grounds 9 to 13 are directed to penalty and costs. In particular the Solicitor in grounds 9 and 10 contended that the Tribunal erred in finding that he had not co-operated with it and in taking into account in making its orders its opinion that it had been deprived of the Solicitor's explanation as to his conduct through his election not to give evidence. In my opinion, the Tribunal was entitled to point to the fact that it would have been assisted by any explanation the Solicitor offered for his conduct. The Tribunal said: "Tf the Solicitor had co-operated with the Tribunal, the Tribunal may have been disposed to impose a suspension or fine upon the Solicitor. It is a fine line between the imposition of a substantial fine in circumstances like this and a strike off order. It is also a fine line between a substantial fine, a lengthy suspension and a strike off order." However, I read this as no more than pointing out that the Solicitor advanced no mitigating considerations such as an explanation may have indicated. I do not think that the Tribunal fell into the error of increasing the penalty to punish the Solicitor for not giving an explanation. Clearly the Solicitor's conduct was a serious breach of the standards expected of his profession and, in my opinion, justified the order made. I would not interfere with it. In my opinion, the appeal should be dismissed. No ground was advanced for interfering with the order for costs that the Tribunal made and I would not interfere with it. CONCLUSION I would propose the following orders: First Appeal 1. Appeal allowed in part. 2. Cross-appeal allowed. 3. Confirm the orders of the Legal Profession Disciplinary Tribunal. 4. Appellant to pay the respondent's costs of the appeal and cross-appeal. Second Appeal Appeal dismissed with costs. Stein JA I have had the benefit of reading the draft judgment of Sheller JA with which I agree. In particular, I agree that the conduct of the solicitor constituted serious breaches of the expected standards of the profession and justified the order for removal of his name from the roll of solicitors (and legal practitioners). The orders which should be made are as proposed by Sheller JA. First Appeal 1. Appeal allowed in part. 2. Cross-appeal allowed. 3. Confirm the orders of the Legal Profession Disciplinary Tribunal. 4. Appellant to pay the respondent's costs of the appeal and cross-appeal. Second Appeal Appeal dismissed with costs. Counsel for the appellant: M B Oakes SC/P Stone \WROSHOTT v THE COUNCIL OF THE LAW SOCIETY OF NEW SOUTH WALES (Stein JAB Solicitors for the appellant: Gunn Hamilton & Blay Counsel for the respondent: I M Wales Solicitors for the respondent: Cutler Hughes & Harris