The Law Society of New South Wales v Muir [2008] NSWADT 237

CITATION: The Law Society of New South Wales v Muir [2008] NSWADT 237

DIVISION: Legal Services Division

APPLICANT The Council of the Law Society of New South Wales PARTIES: RESPONDENT Brian Thomas Muir

FILE NUMBER: 082008

HEARING DATES: 14 July 2008

SUBMISSIONS CLOSED: 4 August 2008

DATE OF DECISION: 25 August 2008

BEFORE: Haylen W - J (Deputy President); Riordan M - Judicial Member;

MATTER FOR DECISION: Original Decision

Legal Profession Act 1987 Legal Profession Act 1994 LEGISLATION CITED : Legal Profession Act 2004 Legal Profession Regulation 1994 Legal Profession Regulation 2002 Legal Profession Regulation 2005

CASES CITED: Gladstone City Council v Local Government Superannuation Board [1980] Qld R 48 44 LGRA 175

APPLICANT P Boyd, solicitor REPRESENTATION: RESPONDENT No appearance

ORDERS: The matter will be listed for directions on 8 September 2008 at 10 am in order to set a timetable for submissions and evidence (if any) in relation to penalty and the terms of orders to be made.

REASONS FOR DECISION 1 The Respondent practitioner Brian Thomas Muir was admitted to practice as a solicitor in February 1988. He was subsequently employed by three firms and in 1992 commenced practice as a sole practitioner under the firm name of Brian T G Muir and then from 1 July 1997 as Brian Muir. The Respondent practitioner did not practice between 1 July 2001 and 10 September 2002. As a sole practitioner, Mr Muir practiced out of Suite 205, "Cliveden", 4 Bridge Street Sydney. 2 On 19 January 2007, following Orders made in the Supreme Court pursuant to provisions of the Legal Profession Act 2004, Ms Jean Sayer was appointed Receiver for the law practice known as Brian Muir conducted by Brian Thomas Muir as principal. As a result of that appointment, Ms Sayer produced two reports, the first dated 24 April 2007 and the second dated 25 June 2007. On 2 November 2007, the Law Society of New South Wales forwarded copies of Ms Sayer's two reports to Mr Muir and requested any response he wished to make to the reports to be sent to the Law Society by Wednesday, 21 November 2007. This letter followed complaints made by the Law Society against Mr Muir on 19 January 2007 that, in turn, led to the appointment of Ms Sayer as the Receiver for Mr Muir's practice. On 6 December 2007 the Law Society again wrote to Mr Muir, referring to its earlier letter of 2 November 2007, advising that following the receipt of Ms Sayer's reports additional complaints had been made, namely: failure to account; misappropriation; failure to provide detailed accounts; failure to pay counsel's fees; delay; breach of section 256, section 259 and section 262 of the Legal Profession Act 2004. Mr Muir was requested to make available by Friday, 21 December 2007 any submissions he wished to make in relation to those matters. 3 By letter dated 24 January 2008, the Law Society advised Mr Muir that complaints against him had been considered by the Society's Professional Conduct Committee where it was resolved that issues of professional misconduct and unsatisfactory professional conduct, in the opinion of the Committee, were involved in the complaint and he was again invited to make submissions within 14 days of receiving the letter advising of the resolutions. The resolutions also expressed the opinion that, subject to any submissions from Mr Muir, it was satisfied that there was a reasonable likelihood that he would be found guilty by the Tribunal and that proceedings be instituted in the Tribunal in relation to the complaints pursuant to s 155(2) of the Legal Profession Act 2004. The letter identified breaches of several sections of the Legal Profession Act 1987, 1994, 2004, the Legal Profession Regulation 2002 and the Legal Profession Regulation 2005. Mr Muir was again advised at the conclusion of the letter that any submissions of fact and law or as to the orders sought before the Tribunal should reach the Society within 14 days of the date of the letter. The letter also stated that if no submissions were received within that time, the Committee would consider the complaint on the information presently available. 4 On 7 April 2008, the Council of the Law Society filed an Application for Original Decision in the Tribunal pursuant to the provisions of the Legal Profession Act 2004. The Orders sought were as follows: that the name of the solicitor be removed from the Role of Local Lawyers; that the solicitor pay the Applicant's costs of the proceedings; and, such further and other Orders as the Tribunal deems appropriate. 5 The grounds for the Application as initially pressed before the Tribunal set out 14 allegations of professional misconduct. The Grounds of the Application were as follows: Brian Thomas Muir, while practising as a Solicitor, was guilty of professional misconduct as set out in the following allegation: Professional Misconduct (1) The solicitor breached Section 61 of the Legal Profession Act, 1987 (2) The solicitor breached Section 62 of the Legal Profession Act, 1987 (3) The solicitor breached Section 117 of the Legal Profession Act, 1994 in that he negotiated a mortgage advance to Mxchange Pty Ltd. (4) The solicitor breached Clauses 88-91 of the Legal Profession Regulation, 2002 dealing with controlled money. (5) The solicitor failed to properly secure his client's trust funds. (6) The solicitor misappropriated trust funds. (7) The solicitor failed to respond to correspondence. (8) The solicitor delayed in the administration of the Estate of the late Harold Gee. (9) The solicitor breached Section 255 of the Legal Profession Act, 2004. (10) The solicitor breached Section 256 of the Legal Profession Act, 2004. (11) The solicitor breached Section 259 of the Legal Profession Act, 2004. (12) The solicitor breached Section 264 of the Legal Profession Act, 2004. (13) The solicitor failed to account. (14) The solicitor failed to pay Counsel's fees. 6 The particulars provided with the Application were as follows: In these particulars, noting that the Legal Profession Act, 2004 commenced on 1 October 2005: The Solicitor means Brian Thomas Muir. "The Receiver" means Jean Sayer. ... A. Radcape Pty Limited The solicitor breached Section 61 of the Legal Profession Act 1987. The solicitor breached Section 62 of the Legal Profession Act 1987. The solicitor breached Section 117 of the Legal Profession Act 1994 in that he negotiated a mortgage advance to Mxchange Pty Ltd. The solicitor breached Clauses 88-91 of the Legal Profession Regulation 2002 dealing with controlled money. The solicitor failed to properly secure his client's trust funds. The solicitor misappropriated the sum of $51,000. (1) The solicitor acted for Radcape Pty Limited on the sale of a property at Robertson which settled on or about 25 October 2004. The sole directors of the company are Colin and Norma Hart. (2) The net proceeds of sale of $336,016.21 were received by the solicitor and deposited to his trust account on 26 October 2004. (3) After payment of vendor duty in the sum of $18,681.50, the balance remaining in the trust account of $317,334.71 was deposited by the solicitor into a controlled money account with St George Bank. (4) Mrs Hart advised the Receiver that in November 2004 she was contacted by the solicitor with respect to making an advance from the Controlled Money Account of $80,000.00 for a period of three months at 8% per annum. (5) Mrs Hart was unable to obtain details of the advance made by the solicitor until he sent her an email on 18 April 2006. That email indicated that in November 2004 a secured advance had been made to Robert Brockman Enterprises Pty Limited and that "There was a subsequent drawdown of $37,200.00 on 24 December 2004 in relation to that loan". (6) Enquiries by the Receiver indicated that only $37,200.00 and not $88,200.00 had been advanced from the controlled money account to Robert Brockman Enterprises Pty Limited secured on property owned by Mxchange Pty Ltd. Further, the solicitor did not appear to take any steps to obtain the consent of the first mortgagee to enable the registration of a second mortgage over the property owned by Mxchange Pty Ltd in favour of Radcape Pty Limited. (7) Enquiries by the Receiver indicated that $51,000 was withdrawn from the controlled money account on 24 November 2004 and paid by the solicitor to David Rogers ("Mr Rogers"). (8) The solicitor, Mr Rogers and another party were directors and shareholders in a company called Aussie Blooms Pty Ltd. Mr Rogers contributed $60,000.00 to the venture and he says that his interest in the company was to be acquired by the solicitor on or about 6 March 2001. (9) Mr Rogers believed the amount due to him by the solicitor after allowing for expenses was $56,000.00. On 24 November 2004 he received a payment of $51,000 when that sum was paid into his bank account following the purchase by the solicitor of a bank cheque for that amount using the funds of Radcape Pty Ltd. B. Estate Late Harold Joseph Gee and Estate Late Alfred Thomas Gee and Marie Gee The solicitor misappropriated trust funds. The solicitor breached 256 of the Legal Profession Act 2004. The solicitor breached 259 of the Legal Profession Act 2004. The solicitor breached Clauses 88-91 of the Legal Profession Regulation 2002 dealing with controlled money. The solicitor failed to respond to correspondence. The solicitor delayed in the administration of the Estate of the late Harold Gee. (1) The solicitor acted for the late Harold Joseph Gee who appointed his brother Alfred Thomas Gee and his wife as executors of his estate. (2) The only asset of the Estate other than real property was a bank account kept with the Commonwealth Bank. The balance in the account was realised on 26 March 2004 when the account was closed and the balance therein of $395,689.07 was deposited to a controlled money account kept by the solicitor for the Executors with St George Bank. (3) The following amounts totalling $196,675.34 were withdrawn on the dates shown: 16.5.05 $50,000.00 1.6. 05 $20,000.00 16.6.05 $65,000.00 25.7.05 $30,000.00 3.9.05 $20,000.00 7.10.05 $11,675.34