CITATION: Law Society of New South Wales v Fiddes [2002] NSWADT 187 DIVISION: Legal Services Division APPLICANT PARTIES: Council of the Law Society of New South Wales RESPONDENT Geoffrey David Fiddes FILE NUMBER: 022002 HEARING DATES: 16/08/02 SUBMISSIONS CLOSED: 08/16/2002 DATE OF DECISION: 09/30/2002 BEFORE: Macfarlan R QC - Judicial Member; Hale S - Judicial Member; Dyster B - Member APPLICATION: Professional Misconduct - fail to act honestly - Professional Misconduct - misappropriate trust moneys/moneys - Professional Misconduct - mislead client MATTER FOR DECISION: Principal matter LEGISLATION CITED : Legal Profession Act 1987 CASES CITED: Allinson v General Council of Medical Education and Registration [1840] 1 QB 750 APPLICANT REPRESENTATION: L Pierotti, solicitor RESPONDENT G Monteith, solicitor ORDERS: 1 That the name of Geoffrey David Fiddes be removed from the Roll of Legal Practitioners.; 2 That Geoffrey David Fiddes pay the costs of the Law Society of and incidental to these proceedings before the Administrative Decisions Tribunal. 1 By Information filed on 16 January 2002, the Council of the Law Society of New South Wales informed the Tribunal that as a result of an investigation of complaints made under Part 10 of the Legal Profession Act 1987, the Council claimed that Geoffrey David Fiddes ("the Solicitor"), while practising as a solicitor, was guilty of professional misconduct. The grounds given were that the Solicitor wilfully breached ss.61 and 62 of the Legal Profession Act, misappropriated monies, made false and misleading statements in documents which he provided to investor clients and prepared for swearing by executors a false affidavit and thereafter caused that false affidavit, when sworn, to be filed in the Supreme Court. 2 The Information provided detailed Particulars of alleged activities of the Solicitor dating back ten years or more. It was supported by very detailed reports of Ms Jean Sayer who was appointed Receiver of the trust property of the Solicitor and of his partner, Christopher John Mackay. Those persons practised together under the firm name of Fiddes Pogson Mackay at Manly. By an affidavit of 15 January 2002, Ms Sayer deposed to the accuracy of the matters contained in her reports. She was not cross examined on any part of her evidence. 3 The Solicitor filed a Reply dated 28 February 2002. The Reply raised some limited points about the Particulars. This led to the withdrawal of some parts of the Particulars. What remained of relevance in the Reply after withdrawal of these Particulars amounted to a dispute with the Particulars in only one limited respect. Information additional to what was in the Particulars was supplied as to one other matter. Subject to these matters, it can be concluded from the terms of the Reply that the allegations made in the Particulars are not in dispute. 4 The Solicitor swore an affidavit on 24 July 2002. The affidavit indicated that he was 64 years of age and was in practice from his admission on 29 April 1960 until his practising certificate was cancelled by the NSW Law Society on 23 November 2000. 5 In his affidavit, the Solicitor did not dispute any part of the allegations made against him in the Information or in Ms Sayer's affidavit. He referred to claims of approximately $1.5 million having been made against the Solicitors' Fidelity Fund "resulting from my actions". He asserted that he will be able to ensure that the Fund is reimbursed all that it is required to pay out. His reference to the claims and to his intention to reimburse the Fund, made by him without any attempt to justify his actions, is in our view to be taken as an implied acceptance by him of the allegations made by the Law Society (subject to the limited matters he mentions in his Reply filed in the proceedings). 6 In cross examination, the Solicitor said that subject to some minor matters (presumably the matters referred to in his Reply), he did not cavil with the allegations contained in the Information or in Ms Sayer's affidavit. 7 In these circumstances, we find that the subsisting Particulars contained in the Information have been established. The only qualification to this is the matter referred to above which is disputed in the Reply. This relates to an aspect of paragraph I(k) of the Particulars. We do not regard the point in dispute as of importance and do not consider it necessary to make a finding about it. 8 We summarise as follows the principal, but not all of, the matters alleged in the Particulars. As we have concluded that the allegations in the Particulars have been established, it follows that we find that the matters summarised below have been established. Lionel Rouse 9 In or about May 2000, the Solicitor gave to one of his clients, Mr Lionel Rouse, an Epitome of Mortgage asserting that $250,000 lent by Mr Rouse had been borrowed by Simonetta Holdings Pty Limited and secured on real property at Brookvale. 10 That company did not receive those funds from Mr Rouse. Instead, the funds were paid into accounts associated with the Solicitor. The assertion made by the Solicitor that there was a mortgage was false. 11 On 25 August 2000, a cheque for $100,000 was given to the Solicitor to be advanced to KF Apartments Limited. It was deposited into the bank account of that company but $77,904 was drawn by the Solicitor from that account and misapplied by him. An Epitome of Mortgage issued by the Solicitor to Mr Rouse asserting that there was security over a property at Manly was false. There was no such security. 12 In about March 2000, Mr Rouse gave to the Solicitor the sum of $300,000 for investment. An Epitome of Mortgage issued by the Solicitor showing a Mr Hawkins as mortgagor and asserting that there was security over a property at Wollstonecraft was false. There was no such security and Mr Hawkins did not receive the funds. The funds were paid into an account of KF Apartments Pty Limited as trustee for Koringa Unit Trust. Emma May Masters 13 On 1 October 1991, another client, Mrs Masters, paid $80,000 to the Solicitor to be invested by way of first mortgage on a property at Manly owned by Gavin Enterprises Pty Limited. The Solicitor issued an Epitome of Mortgage indicating that this had occurred. The information contained in the document was false. There was no security available to Mrs Masters and the funds were not paid to Gavin Enterprises Pty Limited. 14 Separately from this, the Solicitor misapplied trust monies totalling $22,500 held in relation to the Estate of the late CF Masters. Trevena Holdings Pty Limited 15 In December 1997, this company paid $300,000 to the Solicitor to be invested in a "bridging loan" to John Robert Bruce Hawkins and to be secured over a property at Wollstonecraft. The Solicitor issued an Epitome of Mortgage showing Mr Hawkins as mortgagor and stating in relation to the mortgage "to be advised following registration". The funds were paid to the Australian Taxation Office but on whose behalf it has not been able to be established. There does not appear to have been any mortgage as indicated by the Epitome. Violet Pearl Haines 16 In 1992, Mrs Haines and her husband, who were clients of the Solicitor, lent a total of $130,000 to Mr and Mrs Koutsos secured on a property at Fairlight. Upon discharge of the mortgage in 1997, the Solicitor gave to Mrs Haines (her husband had by then died) an Epitome of Mortgage indicating reinvestment of the funds on a mortgage loan to Mr Hawkins, secured on property at Wollstonecraft. The document was false as no advance of the funds was made to Mr Hawkins and there was no mortgage as described in the document. 17 In 1994, the Solicitor received $100,000 from Mrs Haines for investment. The Epitome of Mortgage issued by the Solicitor indicated that there was to be security over a property at Manly. There was never any registered mortgage and no unregistered mortgage has been able to be located. A subsequent Epitome of Mortgage issued by the Solicitor on 1 July 1999 in respect of the same sum was false in that there was no mortgage as indicated by the document. Thomas Stannard Hart 18 In 1988, the Solicitor received $75,000 from Mr and Mrs Hart for investment. Epitomes of Mortgage issued by the Solicitor in 1988, 1989 and 1992 all appear to have been false in that there were no mortgages as described in the documents. Delvine Trading Pty Limited 19 In respect of advances of $80,000 and $120,000 by Phyllis May Richmond to Mr and Mrs Koutsos, the Solicitor issued false Epitomes of Mortgage evidencing mortgages that did not exist. 20 An amount of $200,000 was received by the Solicitor from Delvine Trading Pty Limited for a mortgage advance to Mr JRB Hawkins. The Solicitor did not use the funds for this purpose but used them to repay the total sum of $200,000 owing to the Estate of the late Mrs Richmond. Estate late Laurel Merle Deane 21 By a number of payments made between 1990 and 1992, the Solicitor misappropriated funds from the Estate of the late LM Deane. The amounts misapplied totalled $57,923.62. Steps were taken by the Solicitor to attempt to conceal the misappropriations. Estate late Charles Frederick Masters 22 The Solicitor acted for the executor of the Estate of the late CF Masters who died on 19 September 1988. In the period that he acted on behalf of the executor, the Solicitor misappropriated money from the estate. The amount involved appears to have been in excess of $50,000. CONCLUSIONS 23 It will be apparent from this summary that on many occasions the Solicitor misappropriated monies entrusted to him and made false and misleading statements in documents which he provided to investor clients. These findings are in our view amply sufficient to warrant the conclusion to which we have come, without the need for us to examine whether, and to what extent, the evidence establishes breaches of ss.61 and 62 of the Legal Profession Act and the allegation concerning the preparation of a false affidavit. 24 As the Solicitor has been guilty of repeated acts of dishonesty in the course of his practice, he is in our view plainly unfit to practise. To apply the well known statement in Allinson v General Council of Medical Education and Registration [1840] 1 QB 750, his conduct "would be reasonably regarded as disgraceful and dishonourable by his professional brethren of good repute and competency". He has accordingly been guilty of professional misconduct. By reason of the circumstances we have described, his name should be removed from the Roll. 25 For these reasons, we make the following orders: 1. That the name of Geoffrey David Fiddes be removed from the Roll of Legal Practitioners. 2. That Geoffrey David Fiddes pay the costs of the Law Society of and incidental to these proceedings before the Administrative Decisions Tribunal. 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.