CITATION: Law Society of New South Wales -v- Bryson -Taylor [1999] NSWADT 41 DIVISION: Legal Services APPLICANT: The Council of the Law Society of New South Wales RESPONDENT: Donal Bryson -Taylor FILE NUMBER: 982000 HEARING DATES: 02/24/1999 SUBMISSIONS CLOSED: 02/24/1999 DATE OF DECISION: 10 June 1999 J S Currie Presiding Judicial Member BEFORE: G F Foster - Judicial Member G Sartore - Member PRIMARY LEGISLATION: Legal Profession Act 1987 APPLICATION: Professional misconduct - solicitor ; Wrongful application of trust/controlled money or other valuable property - MATTER FOR DECISION: Principle matter Applicant: D Hipsley of counsel instructed by R J Collins REPRESENTATION: Respondent: In person ORDERS: 1. The name of Donald Brson -Taylor be and is removed from the Roll of Legal Practitioners in New South Wales as at 24 February 1999. 2. The costs of the Applicant be paid by the Respondent, such costs to be agreed or as assessed. 1 On 8th October, 1998, the Council of the Law Society of New South Wales ("the Law Society") filed information with the Tribunal pursuant to Section 155 of the Legal Profession Act 1987 ("the Act"). 2 The Legal Services Division of the Administrative Decisions Tribunal ("the Tribunal") heard and determined the information. 3 The grounds of the information are: (1) The Solicitor wilfully breached Section 61 of the Act. (2) The Solicitor wilfully breached Section 62 of the Act. (3) The Solicitor acted in breach of Regulation 30 of the Legal Profession Regulations 1994. (4) The Solicitor acted in breach of Regulation 32 of the Legal Profession Regulations 1994. 4 The evidence in support of the information comprised the Affidavit of Richard Brian filed with the Tribunal on 8th October, 1998, the further Affidavit of Richard Brian filed with the Tribunal on 9th October, 1998, and the Affidavit of Raymond John Collins filed with the Tribunal on 8th October, 1998. WILFUL BREACHES OF SECTION 61 5 Section 61 provides that, if a Solicitor, in the course of practising as a Solicitor, receives money on behalf of another person, the Solicitor shall hold the money exclusively for the other person, that the money so received shall be paid 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. This money shall be paid or disbursed as directed by the person on whose behalf the money is held. 6 This Section does not operate to prevent a Solicitor from withdrawing or receiving, from trust money or controlled money: (a) Reimbursement for disbursements paid by the Solicitor; or (b) Money for disbursements to be paid by the Solicitor; or (c) Money due or to accrue due to the Solicitor for costs, if the prescribed procedure is followed. 7 The Legal Profession Regulation 1994 replaced the former Legal Profession (Trust Account and Controlled Money) Regulation 1988, with effect from 1st September, 1995. The new Legal Profession Regulation largely reproduces the provisions of the 1988 Regulation. Clause 32(2) of the Legal Profession Regulation 1994 provides that a Solicitor who has disclosed information about the costs of legal services in accordance with Section 175 of the Act to a person from whom the Solicitor has received trust money or controlled money or who can reasonably claim in terms of Section 180 of the Act that the disclosure was not required because in the circumstances it was not reasonably practicable, may withdraw or receive from that money, money for reimbursement for disbursements, money for disbursements to be paid or money due or accrued due to the Solicitor for costs in any of the following circumstances: (a) The Solicitor has delivered to the person a bill of costs in accordance with Part 11 of the Act and the person has authorised the withdrawal or receipt; or (b) The Solicitor has delivered to the person such a bill of costs together with a written Notice that, unless the person objects, the Solicitor intends to withdraw the money and to apply it towards the payment of the bill at the expiration of thirty (30) days after the delivery and that period has expired without objection. 8 The wilful contravention of these provisions of Section 61 is professional misconduct. In this context, the statement by Maughan J. (as he then was) in Re Vickery (1931)1 Ch. 572 at 583 is relevant. "A person is not guilty of wilful neglect or default unless he is conscious that, in doing the act which is complained of or in omitting to do the act which it is said he ought to have done, he is committing a breach of his duty or is recklessly careless whether it is a breach of his duty or not." 9 The Tribunal will now deal with each of the matters referred to in the information: PAPPAS 10 In about February, 1997, the Solicitor was instructed by Mr Pappas in relation to the purchase of a property at Randwick. On 27th February, 1997, the Solicitor requested a cheque from Mr. Pappas in the sum of $7,069.00 to pay stamp duty in relation to the purchase of the subject property. On 28th February, 1997, the Solicitor received a cheque from Mr Pappas in the sum of $7,069.00 payable to the Office of State Revenue and crossed "Not negotiable". 0n 5th March, 1997, the Solicitor banked the cheque into the Solicitor's Trust Account, together with other monies totalling $23,601.00. Mr Pappas did not give to the Solicitor authority to deposit this cheque into the Trust Account. The Solicitor in relation to the deposit to the Trust Account created no Trust Account records or Controlled Monies Account records. The client has since paid the stamp duty direct to the Office of State Revenue. 11 The Tribunal finds the Solicitor guilty of a breach of Section 61 and Section 62 of the Act and that the said breaches were wilful. Further, the Tribunal finds that the Solicitor acted in breach of Regulation 30. CLIFFORD: 12 In about December, 1996, the Solicitor was instructed by Mrs Clifford in relation to the purchase of a property in Pitt Street, Sydney. On 4th February, 1997, the Solicitor forwarded to Mr Mark Clifford, a letter requesting that Mrs Clifford forward the sum of $16,532.00 in payment of stamp duty in relation to purchase of the said property. In March, 1997, the Solicitor received a cheque from Mrs Clifford in the sum of $16,532.00 payable to the Office of State Revenue. On 5th March, 1997, the Solicitor banked the cheque into the Solicitor's Trust Account, together with other monies totalling $23,601.00. On 6th March, 1997, the Solicitor withdrew an amount of $16,532.00 from his Trust Account by direct transfer to his General Account. Mrs Clifford did not give the Solicitor authority to deposit this money into the Trust Account. The Solicitor created no Trust Account records or Controlled Monies Account Records in relation to either the deposit of those funds, or the subsequent payment of those funds. 13 The Tribunal finds the Solicitor guilty of breaches of Section 61 and Section 62 of the Act and that the said breaches were wilful. The Tribunal further finds that the Solicitor acted in breach of Regulation 30. WONG 14 In about July, 1995, the Solicitor was instructed by Mr & Mrs Wong in relation to the sale of certain property and the purchase of certain property. On 3rd August, 1995, the Solicitor opened a Controlled Money Account by way of a deposit of $10,515.00. On the following dates, the Solicitor withdrew the following amounts from the Controlled Money Account: 18th August, 1995 $10,515.00 30th August, 1995 $ 950.00 19th October, 1995 $ 600.00 27th November, 1995 $ 6,084.05 TOTAL: $18,149.05 15 On the days referred to above, the monies referred to above were deposited into the Solicitor's General Account by way of deposits with other monies. No memorandum or bill of costs was issued to Mr & Mrs Wong in relation to any of the drawings or deposits referred to above. Mr & Mrs Wong did not give the Solicitor authority to deposit these monies into his General Account. 16 The Tribunal finds the Solicitor guilty of breaches of Section 61 and Section 62 of the Act. BYARD 17 From about October, 1996, the Solicitor was instructed by Mr Byard in relation to two conveyancing matters and one relating to the preparation of a Will. On 17th January, 1997, the sum of $60,375.00 was deposited into the Solicitor's Trust Account in relation to the sale of a property at Bondi. On 14th February, 1997, a payment of $18,000.00 was made from the Trust Account for a deposit in relation to the purchase of a property at Bateau Bay. On the following dates, the following amounts were drawn against the Trust Ledger for costs: 4th February, 1997 BTA costs $ 712.50 7th February, 1997 BTA costs $ 9,774.00 13th February, 1997 BTA costs - re purchase $ 1,634.00 18th February, 1997 BTA costs - re estate planning $10,993.00 28th February, 1997 BTA costs - re mortgage $ 2,675.00 TOTAL: $25,788.50 18 No memorandum or bill of costs was issued to Mr Byard in relation to any of the drawings referred to above. Mr Byard did not give the Solicitor authority to deposit these monies into his General Account. 19 The Tribunal finds the Solicitor guilty of breaches of Section 61 and 62 of the Act and that such breaches were wilful. The Tribunal finds that the Solicitor acted in breach of Regulation 32. ACE (NOBLE & BATES) 20 In about July, 1995, the Solicitor was instructed by Noble & Bates in relation to sale of shares in ACE (Australian College of English). In the course of so acting, on the following dates, the Solicitor received into his Trust Account the following amounts on behalf of Noble and Bates: 7th July, 1995 $29,272.00 1st August, 1995 $14,456.00 8th August, 1995 $18,800.00 TOTAL: $62,528.00 21 On the following dates, the Solicitor withdrew the following amounts from the Trust Account from the ACE ledger on behalf of Noble and Bates: 7th July, 1995 - costs $ 2,270.00 10th July, 1995 - costs $ 2,240.00 11th July, 1995 - stamp duty (unrelated matter) $ 9,504.50 24th July, 1995 - costs $ 704.00 1st August, 1995 - costs $ 2,240.00 1st September,1995 - costs $ 3,500.00 TOTAL: $20,458.50 22 The money withdrawn from the Trust Account was used for purposes unrelated to ACE. On 27th November, 1995, the Solicitor deposited the sum of $18,800.00 back into the Trust Account to the credit of ACE on behalf of Noble and Bates. 23 The Tribunal finds the Solicitor guilty of breaches of Section 61 and Section 62 of the Act and that such breaches were wilful. The Tribunal finds that the Solicitor acted in breach of Regulation 32. DURRANS & RUSSELL 24 In about January, 1997, the Solicitor was instructed by Durrans & Russell in relation to the purchase and sale of a property at Bondi Junction. On 8th January, 1997, the Solicitor received a cheque payable to the Office of State Revenue in the sum of $4,314.50. On 10th January, 1997, the Solicitor banked the cheque into his Trust Account, on account of "costs and stamp duty". On 10th January, 1997, the Solicitor withdrew from his Trust Account a cheque for $4,314.50 on account of costs and stamp duty and deposited into his General Account. On 22nd January, 1997, the Solicitor withdrew from his General Account a cheque in the sum of $4,312.50 payable to the Office of State Revenue on behalf of Durrans & Russell. 25 The Tribunal finds the Solicitor guilty of breaches of Section 61 and Section 62 of the Act and that such breaches were wilful. he Tribunal also finds that the Solicitor acted in breach of Regulation 30. TELESPHERE PTY LTD 26 In or about December, 1995, the Solicitor received instructions in relation to Telesphere and received a cheque in the sum of $24,872.79 on behalf of Telesphere. On 28th December, 1995, the Solicitor banked the cheque referred to above into his Trust Account on behalf of Telesphere. On the following dates, the Solicitor withdrew the following amounts from the Trust Account: 28th January, 1995 - Directorship - fees & charges $ 5,600.00 8th January, 1996 - Office of State Revenue (paid on behalf of an unrelated matter $10,569.00 16th January, 1996 - Directorship - fees holding co. $ 8,703.79 TOTAL: $ 24,872.79 27 The Solicitor did not issue a memorandum or bill of costs to Telesphere Pty. Ltd. in relation to these withdrawals. Telesphere did not give authority to the Solicitor to withdraw these monies. 28 The Tribunal finds the Solicitor guilty of breaches of Section 61 and Section 62 of the Act and that those breaches were wilful. The Tribunal also finds the Solicitor acted in breach of Regulation 32. PEDERSEN 29 In about February, 1995, the Solicitor was instructed by Mr Pedersen in relation to the purchase of a property at Russell Lea. On 15th May, 1995, in the course of so acting, the Solicitor received the sum of $18,136.54 which he paid into his Trust Account on behalf of Pedersen. On the following dates, the Solicitor withdrew and deposited the following amounts from and to his Trust Ledger: 15th May, 1995 - costs Pederson (withdrawal) $ 1,963.00 22nd May, 1995 - stamp duty Pederson (withdrawal) $ 7,541.50 11th July, 1995 - journal entry (deposit) $ 9,505.50 11th July, 1995 - Pedersen (withdrawal) $18,136.54 TOTAL: $37,146.54 30 No memorandum or bill of costs were issued in relation to the costs withdrawn. The stamp duty was paid in relation to an unrelated matter. The journal entry was from an unrelated matter. The final cheque on 11th July, 1995, was drawn in favour of Pedersen to repay the original deposit. 31 The Tribunal finds the Solicitor guilty of breaches of Section 61 and Section 62 of the Act and that such breaches were wilful. The Tribunal finds the Solicitor acted in breach of Regulation 32. WONG & NG 32 In December, 1994, the Solicitor was instructed by Wong and Ng in relation to a dispute regarding the subdivision of property. On the following dates, the Solicitor issued Memoranda of Costs in the following amounts in relation to work done: 19th January, 1995 $ 616.15 28th January, 1995 $ 348.25 3rd March, 1995 $ 300.00 28th July, 1995 $2,055.00 TOTAL: $3,319.40 33 Except for the sum of $415.10, the client paid the costs. On 5th October, 1995, the Solicitor wrote to Wong & Ng in the following terms: "I could deduct from the settlement proceeds my costs, the final bill for which I would forward to you between now and settlement for your approval." 34 On 8th October, 1995, Wong and Ng sent a facsimile to the Solicitor in the following terms: "Please deduct from the settlement proceeds your costs and deposit the balance to our bank account." 35 On 9th October, 1995, the matter was settled and the sum of $11,360.56 was deposited to the Solicitor's Trust Account on behalf of Wong and Ng. On the following dates, the Solicitor withdrew the following amounts from the Trust Account on account of costs: 9th October, 1995 $ 1,556.80 11th October, 1995 $ 3,100.00 16th October, 1995 $ 1,100.00 17th October, 1995 $ 1,200.00 7th November, 1995 $ 3,900.00 TOTAL: $10,856.80 36 The Solicitor did not issue any memorandum or bill of costs for costs and disbursements in relation to these amounts. 37 The Tribunal finds the Solicitor guilty of Section 61 and Section 62 of the Act and that such breaches were wilful. The Tribunal further finds the Solicitor acted in breach of Regulation 32. SHARMA 38 In January, 1996, the Solicitor was instructed by Mr. Sharma in relation to a Lease Agreement. In the course of so acting, the Solicitor received the sum of $1,307.00 on behalf of Mr. Sharma. On 22nd January, 1996, the Solicitor banked the $1,307.00 into his Trust Account on behalf of Mr. Sharma. On the same day, the Solicitor withdrew the said sum and deposited it into his General Account. On the 2nd February, 1996, the Solicitor made the following payments out of his General Account: Warren & Warren Law Agency (Lessor's Solicitor) $1,295.00 Office of State Revenue - stamp duty $ 12.00 TOTAL: $1,307.00 39 On 31st January, 1997, the Solicitor received the sum of $3,000.00 on behalf of Mr. Sharma which he banked into his Trust Account. On 31st January, 1997, the Solicitor withdrew $924.67 for costs from his Trust Account on account of Mr. Sharma. On 11th March, 1997, the Solicitor forwarded to Mr. Sharma two memoranda of costs and disbursements for $619.28 and $548.45 (total $1,167.73). On 12th March, 1997, the Solicitor withdrew a cheque in favour of Mr. Sharma in the sum of $1,822.27. That withdrawal is not noted in the client's Trust Ledger. 40 The Tribunal is satisfied that the Solicitor is guilty of breaches of Section 61 and Section 62 of the Act and that such breaches were wilful. The Tribunal is also satisfied that the Solicitor acted in breach of Regulation 32. PORTER 41 In about May, 1995, the Solicitor was instructed in relation to the Estate of Porter. On 15th May, 1995, and 27th September, 1995, the Solicitor received amounts of $364.10 and $1,711.13 which he banked into his Trust Account. On the following dates, the Solicitor withdrew the following amounts on account of costs: 16th May, 1995 $ 300.00 27th September, 1995 $1,100.00 27th May, 1996 $ 26.00 14th January, 1997 $ 598.00 TOTAL: $2,024.00 42 The Solicitor did not issue any memoranda or bill of costs in relation to these withdrawals. 43 The Tribunal finds that the Solicitor guilty of breaches of Section 61 and Section 62 of the Act and that such breaches were wilful. The Tribunal also finds that the Solicitor acted in breach of Regulation 32. MATTHEWS 44 In about 1994, the Solicitor was instructed in relation to the Estate of Matthews. In the course of so acting, the Solicitor received the following amounts and deposited those amounts to his Trust Account: 20th June, 1994 $17,700.00 22nd April, 1996 $ 1,477.19 23rd October, 1996 $13,303.65 TOTAL: $32,480.84 45 On the following dates, the Solicitor withdrew the amounts on account of costs: 28th April, 1994 $ 1,328.00 10th August, 1994 $ 4,697.00 17th August, 1994 $ 1,200.00 23rd August, 1994 $ 1,370.00 4th January, 1995 $ 4,038.00 8th May, 1995 $ 2,175.00 6th July, 1995 $ 720.00 27th September, 1995 $ 515.00 12th December, 1995 $ 1,130.00 22nd April, 1996 $ 1,460.00 23rd October, 1996 $ 1,255.00 25th October, 1996 $ 300.00 1st November, 1996 $ 4,936.75 29th November, 1996 $ 2,800.00 4th December, 1996 $ 2,887.45 3rd January, 1997 $ 690.00 17th January, 1996 $ 836.40 TOTAL: $32,339.00 46 In relation to withdrawals between August, 1994 and January, 1995, the Solicitor issued a bill of costs on each of the days on which he drew the costs, totalling $11,305.40. In relation to withdrawals rom February, 1995 onwards, the Solicitor did not issue any bills of costs (totalling $21,033.60). 47 The Tribunal is satisfied that the Solicitor is guilty of Section 61 and Section 62 of the Act and that such breaches were wilful. The Tribunal is further satisfied that the Solicitor acted in breach of Regulation 32. ERDMAN 48 In January, 1996, the Solicitor issued an invoice to Erdman in the sum of $5,279.60 which included a fee of $750.00 in relation to Counsel's fees. On 16th February, 1996, the Solicitor issued a third invoice to Erdman in the sum of $3,141.10. The invoice included a further fee of $250.00 in respect of Counsel's fees. 49 On 4th March, 1996, the Erdman matter settled and monies were received for the full amount outstanding. That payment included a sum of $1,000.00 for Counsel's fees. The Solicitor failed to pay Counsel's fees. 50 The Tribunal finds the Solicitor guilty of the breach of Section 61 of the Act and that such breach was wilful. THE SOLICITOR 51 The Solicitor was admitted on 18th March, 1996, following Articles of Clerkship with Hunt & Hunt, Solicitors. The Solicitor at first was employed for one (1) year with Sly & Russell (as it then was) and thereafter, studied and worked in Europe between 1967 and 1971. The Solicitor resumed practice as an employed Corporate Solicitor in 1971 and thereafter, in private practice. 52 The Solicitor did not contest any of the particulars comprising the information before the Tribunal. In his Affidavit filed with the Tribunal on 17th February, 1999, the Solicitor expressed "the deepest remorse and sorrow for the inconvenience and loss to clients and others who were affected by my actions and to the Law Society and its associated organisations for the inconvenience, costs and losses which they have suffered." 53 The Solicitor continued to say: "I sincerely regret that in the last two years of that period I was unable to deal with my professional and fiduciary duties in compliance with the Legal Profession Act. I ascribe this inability to the pressure of maintaining a sole practice in the face of increased practice competition, loss of Legal Aid work and ensuing sudden reduction in my fee income and my failure in these circumstances to reduce practice expenses quickly enough to allow my practice to remain both viable and comply with my fiduciary duties." 54 It is regrettable that economic financial circumstances can be such that a Solicitor could consider it appropriate to entertain a course of lengthy and calculated misappropriation to fund practice overheads. The Tribunal has found the Solicitor guilty of professional misconduct in a large number of matters. The primary consideration of the Tribunal in a case such as this is to protect the public by preventing a person unfit to practice from holding himself or herself out to the public as a legal practitioner in whom members of the public might repose confidence. In this regard, see the general comments of the New South Wales Court of Appeal in Law Society of New South Wales -v- Walsh (CA 40589/96 15th December, 1997). 55 The Tribunal's duty to protect the public is not confined to the protection of the public against further misconduct by the particular practitioner who is the subject of the disciplinary proceedings. It extends to protecting the public from similar defaults by other practitioners. Thus, it is relevant to take into account the effect the Order will have upon the understanding in the profession and amongst the public of the standard of behaviour required of Solicitors. In this sense, any penalty imposed should contain an element of general deterrence. (See Law Society of New South Wales -v- Foreman (1994 34 NSWLR 408 @ 441). 56 In the presence case, the evidence clearly discloses that the Solicitor is unfit to practice and that he should be prevented from doing so. The appropriate Order is therefore that his name be removed from the Roll. ORDERS 57 The Tribunal orders that: 1. The name of Donald Bryson -Taylor be and the same is removed from the Roll of Legal Practitioners in New South Wales as at 24 February 1999. 2. The costs of the Applicant be paid by the Respondent, such costs to be agreed or as assessed. Last Updated: 06/10/1999 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.