Law Society of New South Wales v Gavel [2007] NSWADT 38

CITATION: Law Society of New South Wales v Gavel [2007] NSWADT 38

DIVISION: Legal Services Division

APPLICANT PARTIES: Council of the Law Society of New South Wales RESPONDENT Nicola Sue Gavel

FILE NUMBER: 062027

HEARING DATES: 12/12/2006

SUBMISSIONS CLOSED: 12 December 2006

EXTEMPORE DECISION DATE: 12 December 2006

DATE OF DECISION: 16 February 2007

BEFORE: Karpin A - ADCJ (Deputy President); Hale S - Judicial Member; Bubniuk L - Non Judicial Member

CATCHWORDS: Solicitor – Disciplinary application

MATTER FOR DECISION: Principal matter

LEGISLATION CITED : Legal Profession Act 2004

CASES CITED: Allinson v General Council of Medical Education and Registration [1894] 1 QB 750

APPLICANT P Boyd, solicitor REPRESENTATION: RESPONDENT R Gulley, solicitor

ORDERS: 1. The name of Nicola Sue Gavel be removed from the Roll; 2. The respondent pay the applicant's costs of and incidental to these proceedings

REASONS FOR DECISION 1 On the 12 December 2006 the Tribunal ordered that the name of Nicola Sue Gavel be removed from the role of solicitors. The Tribunal further ordered that the respondent pay the costs of the applicant of and incidental to these proceedings. 2 The Tribunal indicated that written reasons would be provided. 3 The matter was listed at short notice in order to dispose of it prior to the respondent being dealt with in the District Court in respect of the criminal offences arising from her misappropriation of trust monies. 4 The background of the matter is that in February 2003 the respondent commenced employment in the practice of John Birmingham and Associates [Legal] ("the firm") at Victoria Road Drummoyne. She commenced employment as a solicitor on 1 January 2005 in that practice. 5 The respondent ceased employment with that firm on 15 November 2005 6 The allegations by the applicant are that over the period of her employment with the firm both as an employed clerk, and as an employed solicitor, the respondent misappropriated trust monies. 7 The respondent admits those allegations. PARTICULARS. 8 Estate J. Wignell: - The firm's trust account records show a cheque drawn on 19 November 2004 in the sum of $4000 payable to Tony Wignell. The presented cheque was payable to the respondent and was banked into a police credit union account in the respondent's name. Both the cheque and the cheque butt are in the handwriting of the respondent. A copy letter dated 24 November 2004 advising of a payment to Mr. Wignell of $4000 appears in the matter file. Mr Wignell did not receive that letter, nor the funds. The matter file contains an acknowledgment of receipt of funds by Mr Wignell dated 3 May 2005 and purportedly signed by him. The signature is not that of Mr Wignell. - On a 26 November 2004 a cheque in the sum of $6,000 payable to R.Wignell appears in the firm's trust account records. The presented cheque was paid to the respondent's account at the police credit union. - On 25 January 2005 the firm's trust account records show a cheque in the sum of $10,000 payable to P. Wignell. The presented cheque was payable to the respondent and paid into her police credit union account. Both the cheque butt and the cheque are in the handwriting of the respondent. - On 21 February 2005 a cheque in the sum of $5,300 appears in the firm's trust account records payable to Caring Funerals. On the same date the cheque was paid into the respondent's account with the police credit union. The cheque was made payable to the respondent, both the cheque butt and the cheque are in the handwriting of the respondent. Mr R. Wignell has advised that the funeral for his mother was conducted by White Lady Funerals and paid for by his brother, Peter. - On 4 May 2005 the firm's trust account records show a cheque in the sum of $8,915 payable to R. Wignell. That cheque was paid to the respondent's police credit union account. Both the cheque butt and the cheque are in the handwriting of the respondent. The matter file contains an unsigned acknowledgement from Mr Wignell in respect of this cheque. - On 29 July 2005, a cheque in the sum of $38,216 payable to R. Wignell appears in the firm's trust account records. On 1 August 2005 that cheque, made payable to the respondent, was paid into the respondent's account at the police credit union. Both the cheque and the cheque butt are in the handwriting of the respondent. - On 9 September 2005 the firm's trust account records show a cheque in the sum of $37,644.88 payable to R. Wignell. That cheque was made payable to the respondent and was paid into her police credit union account on 12 September 2005. Both the cheque butt and the cheque are in the handwriting of the respondent. 9 Estate R. Williams: - On 15 December 2004 the firm's trust account records show a cheque in the sum of $8,969, payable to C. Williams. The presented cheque was made payable to the respondent and paid into her account with the police credit union on the same date. A statement of account forwarded to a beneficiary on 25 July 2005 and signed by the respondent did not disclose this transaction. - On 23 December 2004, the firm's trust account records disclose a cheque in the sum of $10,000 payable to A. Williams. The presented cheque was payable to the respondent and paid into her account with the police credit union on 10 January 2005. Both the cheque butt and that of the presented cheque are in the handwriting of the respondent. - On 5 November 2004, Ms C. Williams gave the respondent $500 in cash on account of costs. She received a receipt numbered 4144, dated 5 November 2004. No such receipt appeared in the firm's trust account records, nor in the firm's office account records. There is no evidence that the monies were received by the firm. 10 Estate of E. Johnston - On 21 March 2005 the firm's trust account records disclose a cheque in the sum of $7,500 payable to J. Johnson. The cheque as presented was payable to the respondent and paid into her account with the police credit union. Both the cheque butt and the cheque are in the handwriting of the respondent. Inquiries with the beneficiaries of the estate reveal that no money was received in respect of this cheque. - On 28 April 2005 the firm's trust account records disclose a cheque in the sum of $9,850 payable to J. Johnson, in part distribution. That cheque as presented was payable to the respondent and paid into her account with the police credit union. Both the cheque butt and the cheque are in the handwriting of the respondent. - On 10 June 2005 the firm's trust account records disclose a cheque in the sum of $7,790, payable to B. Johnson. The cheque as presented was made payable to the respondent and paid into her account with the police credit union. - On the 11 July 2005 the firm's trust account records disclose a cheque drawn in the sum of $9,712.15 payable to B. Johnson. The presented cheque was payable to the respondent and paid into her account with the police credit union. 11 Estate of Coulter: The firm's trust account records disclose a cheque in the sum of $40,000 drawn on 22 July 2005 payable to D.Coulter. The cheque as presented was payable to John Johnson. Both the cheque butt and the cheque are in the handwriting of the respondent. Copies of correspondence in the file purporting to be correspondence to beneficiaries were not received by the beneficiaries. There is nothing in the administration of the estate that would account for a payment to John Johnson. The respondent admits the misappropriation of the sum of $40,000. 12 Estate Brotherson: On 28 August 2005 the firm's trust account records disclose a cheque in the sum of $72.00 payable to "fax. SMH." On 31 October 2005, that cheque was paid into the respondent's police credit union account, but was in the sum of $8,725 payable to the respondent. Both the cheque butt and the cheque are in the handwriting of the respondent. 13 Estate D. Butler: On 18 November 2004 the firm's trust account records disclose a cheque in the sum of $1031 payable to the Supreme Court of New South Wales. That cheque was presented payable to the Supreme Court of New South Wales, both the cheque butt, and the cheque are in the handwriting of the respondent. At the date of inquiry, no probate had been applied for in the estate of D. Butler 14 The respondent concedes that the total misappropriation from the firm's trust account was $171,759.87. 15 The respondent concedes that the only appropriate order to be made by the Tribunal is that her name be removed from the roll and that she be required to pay the applicant's costs of and incidental to the proceedings. 16 At the time of these matters coming to light, the respondent was the only employed solicitor of the firm. The principal of the practice became aware of problems on 3 November 2005 and took immediate steps to have the matter investigated. It is apparent from the material filed by the applicant that the principal took steps to promptly advise the Law Society of New South Wales of the problems and to assist in the investigation of the deficiency in his trust account resulting from the respondent's depredations. 17 The defalcations involved, the falsification, fabrication and forging of documents occurring over a period of a little less than a year. The nature of the steps taken to cover her tracks, indicate that the respondent gave considerable thought to the means by which she could misappropriate trust monies. Her conduct only came to light when her employer noticed irregularities in cheques she sought to have him sign. 18 Criminal proceedings were instituted against the respondent. The current proceedings were, by agreement, listed before the Tribunal on 12 December 2006 on an urgency basis in order to have them dealt with prior to the respondent being sentenced in the District Court. 19 On that day, Mr Gulley appearing for the respondent, filed in the hearing a medical report of Dr Andrew McPherson, consultant psychiatrist. After submissions from the legal representatives, the Tribunal delivered brief ex tempore reasons and made orders as set out in para 1. 20 The psychiatrist's report sets out the personal and professional history he obtained from the respondent. He noted that following the coming to light of these offences, the respondent attempted to commit suicide. He came to the view that she was clinically depressed and formed the opinion that she had been suffering from depression over the previous two years, which included the period of these defalcations. The doctor expressed the view that a number of factors had a contributed to her depression both at a personal and professional level. She had sought to avoid her problems by the use of both cannabis and alcohol. Her misappropriation of trust funds was an attempt to improve her financial position through gambling. 21 In the opinion of the psychiatrist, the cause of the respondent's depression is likely to be "multifactorial and include genetic predisposition, given the family history of severe depression, as well as multiple psychological stressors". At the time of the report he believed that she had good insight into her offending behaviour, but that she required continuing psychiatric treatment, including antidepressant medication and psychotherapy. There is nothing in the report, however, suggesting that at the time, of committing these misappropriations the respondent to did not know that what she was doing was wrong. In other words, there can be no suggestion that her conduct was not wilful, in the sense that is used in relation to a serious offence involving the finding of professional misconduct. 22 The Trust ledgers from which the respondent took monies were those relating to deceased estates, matters in which it was less likely that her defalcations would quickly come to light. She falsified documents and forged signatures, in order to make the files accord with the Trust ledgers, thus making detection more difficult. These are careful and calculating actions designed to delay the inevitable detection of her dishonesty. 23 The respondent's behaviour represents a grave breach of the trust reposed in her both by her employer and the firm's clients with whom she dealt. The fact that she was committing these offences both before and after she was admitted, must raise serious questions about her suitability to return to the profession, should she contemplate making such an application in the future. 24 The Tribunal is satisfied that the conduct of the respondent in relation to each of these misappropriations would reasonably be regarded as both disgraceful and dishonourable by her professional peers of good repute and competence. [See the test laid down by Lopes LJ in Allinson v. General Council of Medical Education and Registration [1894] 1 QB 750]. Thus it clearly constitutes professional misconduct warranting the removal of her name from the Roll. 25 The Orders of the Tribunal are: 1. That the name of the Nicola Sue Gavel be removed from the Roll. 2. That the respondent pay the costs of the applicant of and incidental to the proceedings before the Tribunal