CITATION: Law Society of New South Wales v Krayem [2004] NSWADT 240 DIVISION: Legal Services Division APPLICANT PARTIES: Law Society of New South Wales RESPONDENT Ghaith Krayem FILE NUMBER: 042018 HEARING DATES: 07/09/2004 SUBMISSIONS CLOSED: 09/07/2004 DATE OF DECISION: 10/19/2004 BEFORE: Nader J QC - ADCJ (Deputy President); Durbach A - Judicial Member; Mahon D - Non Judicial Member APPLICATION: Professional Misconduct - alter date of document - Professional Misconduct - breach of s. 61 of the Legal Profession Act - Professional Misconduct - fail to provide accounts - Professional Misconduct - mislead client - Professional Misconduct - prepare false documents - Unsatisfactory Professional Conduct - delay MATTER FOR DECISION: Principal matter LEGISLATION CITED : Legal Profession Act 1987 Legal Profession Regulation 2002 CASES CITED: Mayes and the Legal Practitioners Act [1974] 1 NSWLR 19 APPLICANT REPRESENTATION: D Barton, solicitor RESPONDENT No Appearance ORDERS: 1. The legal practitioner's name be removed from the Roll of Legal Practitioners; 2. The legal practitioner pay the Law Society's costs of and incidental to the proceedings, as agreed or as assessed under Division 6, Part 11 of the Legal Profession Act 1987; 3. A copy of these reasons should be supplied to the Solicitor forthwith; 4. The matter also be re-listed in order to hear Mr Firth's claim. 1 These are proceedings on an Information laid on 23 April 2004 by the Council of the Law Society of New South Wales (the Council) against Ghaith Krayem (the Solicitor). The Council seeks findings of both professional misconduct and unsatisfactory professional conduct. 2 The Information also includes a claim for compensation by Mr Stephen Paul Firth, a Solicitor. That claim will be dealt with after this decision has been published. 3 The Council seeks orders: (i) that the Solicitor's name be removed from the Roll of Legal Practitioners. (ii) that the Solicitor pay the Council's costs of and incidental to the proceedings, as agreed or as assessed under Division 6, party 11 of the Legal Profession Act 1987 (the Act) or on such other basis as the Tribunal may determine. 4 Proceedings on the Information were heard on 7 September 2004. The Solicitor did not appear; he was not represented, nor did he file a pleading admitting facts. As a result, the material allegations in the Information had to be strictly proved. 5 The facts alleged to support the findings sought by the Council are dealt with below in the order in which they occur in the Information. 1 The Solicitor contravened clause 36 of the Legal Profession Regulation (the Regulation) 6 It is alleged that the Solicitor contravened clause 36 of the Legal Profession Regulation 1994 (the Regulation). Clause 36 provides amongst other things: "(5) The solicitor must, at the end of each named month, prepare a statement reconciling the balance of his or her trust bank account with the balance of the related cash-book." 7 In the course of his practice, the Solicitor operated a trust account. On 21 July 1998 he received into his trust account the sum of $2,340, being trust moneys within the meaning of the Act. 8 Between 1 July 1998 and 28 February 1999, the Solicitor prepared bank reconciliations and trial balances for the Trust Account as at: 17 September 1998, 30 September 1998, 30 November 1998 and 28 February 1999. 9 The Solicitor failed to prepare bank reconciliations and trial balances for the Trust Account for the months of July 1998, August 1998, October 1998, December 1998, January 1999, March 1999, April 1999, May 1999, June 1999, and July 1999, in contravention of clause 36 of the Regulation. 10 These failures considered together were a serious departure from the requirements of clause 36 of the Regulation. We regard them as unsatisfactory professional conduct involving a substantial and consistent failure to reach reasonable standards of competence and diligence within the meaning of section 127 of the Act and, therefore, as constituting professional misconduct. If ignorance of the requirement to prepare bank reconciliations and trial balances were a factor in determining whether such failures amounted to professional misconduct, and not mere unsatisfactory professional conduct, the fact that during the period of defaults the Solicitor did what was required on some occasions precludes the possibility of ignorance as a factor. 2.The Solicitor contravened clause 39 of the Regulation 11 It is alleged that the Solicitor contravened clause 39 of the Regulation. Clause 39(1) of the Regulation provided that a solicitor must, within 21 days after the end of each named month, prepare a trial balance statement disclosing each account in his or her trust ledger (including an account for any trust money deposited by the solicitor with the Law Society in compliance with section 64 of the Act), effective as at the end of that month. 12 Between 1 July 1998 and 28 May 1999, the Solicitor prepared monthly ledger trial balance statements for the Trust Account as at: 17 September 1998, 30 September 1998, 30 November 1998 and 28 February 1999. 13 We find that, as alleged, the Solicitor failed to prepare monthly ledger trial balance statements for the Trust Account, within 21 days of the end of each month, or at all, for the months: July 1998, August 1998, October 1998, December 1998, January 1999, March 1999, April 1999, and May 1999, in contravention of clause 39(1) of the Regulation. 14 For the reasons expressed in par 10, above, we find that the failures to comply with clause 39 of the Regulation constituted professional misconduct. 3.The Solicitor wilfully contravened subsection 62(1) of the Act 15 The Council alleges that the Solicitor wilfully contravened section 62(1) of the Act. That subsection is in the following terms: "62 Keeping of accounts (1) A solicitor shall keep: (a) in the case of trust money (within the meaning of section 61) - accounting records, or (b) that disclose at all times the true position in relation to money received by the solicitor on behalf of another person." (Note: the quoted sections of the Act and Regulation in these reasons are as they were at the material times) 16 The wilfulness of the contravention is significant because, by subsection 62(4), a wilful contravention of subsection (1), (2) or (3) is professional misconduct. 17 In Re Mayes and the Legal Practitioners Act [1974] 1 NSWLR 19, at p.21, Hardie JA said: "It is well settled law that there can be wilful failure within the meaning of the section without any positive intention to break the law; breaches committed over a period of time can, in the light of the relevant circumstances, be so substantial and reckless and show such complete indifference on the part of the solicitor to his important obligations to his clients and to the public, as to amount to wilful failure". At p.26, Reynolds and Hutley JJA said: "Wilful misconduct can be established by evidence that a person acts with reckless carelessness, not caring what the results of his carelessness may be. "We understand the cases to say that recklessness to such an extent is, as it were, constructively wilful, and of a level of culpability comparable with actual wilfulness. 18 We are satisfied on the evidence that the Solicitor failed to keep accounting records, as alleged, and that the failure was wilful within the meaning of subsection 62(4). The evidence demonstrates complete indifference on the part of the Solicitor of his relevant obligations. He may not have had a "positive intention" to use the words of Hardie JA but his complete indifference to his obligations is "wilful contravention" by virtue of judicial authority. Therefore, we find that the failure amounted to professional misconduct. 4.The Solicitor wilfully contravened subsection 61(2)(a) of the Act 19 This is by implication an allegation of a wilful contravention of subsection 61(1) of the Act which, if established, amounts to professional misconduct by virtue of subsection 61(7). 20 The relevant parts of section 61 are as follows: "61 Money received by solicitor on behalf of another (1) If a solicitor, in the course of practising as a solicitor, receives money on behalf of another person, the solicitor shall: (a) ... (b) ensure that subsection (2) and the regulations are complied with in relation to the money. [Our emphasis] (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, ...." 21 The evidence supports the allegation of the Council that the Solicitor received trust moneys, within the meaning of the Act, on the dates and for the persons named hereunder: 20 Oct 1998 - $200 cash - for Sidaoui 20 Oct 1998 - $2900 cash - for Yalda 2 Feb 1999 - $200 cash - for Halabi 2 Feb 1999 - $902.15 cash - for Merhi 2 Feb 1999 - $200 cash - for Halabi 22 None of these amounts were paid into the Solicitor's Trust Account. The failure to comply with subsection 61(2)(a) involved contravention of subsection 61(1)(b). Being either actually wilful or, at least, wilful as demonstrating a reckless disregard by the Solicitor of his relevant obligations, it was professional misconduct by virtue of subsection 61(7) if for no other reason. 5.The Solicitor wilfully breached section 61(1)(a) of the Act 23 This is an allegation of contravention of section 61(1)(a) of the Act which if proved, by virtue of subsection (7), referred to above, is professional misconduct. The relevant parts of subsection (1) are in the following terms: "61 Money received by solicitor on behalf of another (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 ..." 24 On 3 December 1998, the solicitor withdrew from his trust account an amount of $1,920.00 leaving a deficiency in the trust account of $1,920.00. The money was used to pay the Solicitor's office rent. The Solicitor explained the transaction in a letter dated 31 March 1999 to 'Chief Trust Account Inspector of the NSW Law Society' in these words: "The amount of $1,920 is very close to the rental for the office, which at that time was $1926. I recall that about that time I did not have my chequebook on one occasion and needed to withdraw money to pay the rent. I attended the bank and ask them to organise a counter cheque. Because I did not have the chequebook with me the teller looked up the account number on the computer. I suspect that she has placed the wrong account number and rather than withdrawing money from the office account it was withdrawn from the trust account. I have asked the bank to provide a copy of the Withdrawal slip so that I can check the signature and see if the handwriting is recognizable, because on the occasion that I am recollecting the teller filled out the details and I signed the authority. There was approximately $2,300 in the office account at that time." 25 This was a failure to hold trust money in accordance with section 61(1)(a) of the Act. Knowing that he had a trust account as well as a general account in his bank when he asked for a counter cheque, we think it showed negligence with respect to his duty under subsection 61(1)(a) not to have ensured that the cheque was not drawn against his trust account. However, we do not think that it has been established that the failure amounted to a wilful contravention of the subsection in the actual or constructive sense. We would not categorize the failure as necessarily showing a reckless disregard. The evidence does not satisfy us to the Briginshaw standard of reckless disregard as distinct from mere carelessness. There was a quite serious infringement of subsection 61(1)(a), but on the evidence we are unable to say that it amounted to professional misconduct. It was of course unsatisfactory professional conduct as defined by section 127 of the Act which includes conduct (whether consisting of an act or omission) occurring in connection with the practice of law that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent legal practitioner. 6.The Solicitor wilfully contravened section 61(2) of the Act in failing to comply with clause 33 of the Regulation 26 The following table shows amounts of money received on behalf of the clients specified, the date on which the money was received and the date on which it was paid into the Solicitor's trust account. Date Received Amount Received On behalf of Date deposited 20/10/1998 $200.00 Fadi Sidaoui 09/03/1999 20/10/1998 $2,900.00 Ihsan Zuher Yalda 09/03/1999 18/01/1999 $765.00 Joseph Nheme 09/03/1999 18/01/1999 $600.00 Osama Abdulqader 09/03/1999 02/02/1999 $400.00 Maha Halabi 09/03/1999 02/02/1999 $902.15 Hatem Merhi 09/03/1999 03/02/1999 $400.00 F & N Dasouqi 09/03/1999 22/02/1999 $400.00 M & M Chuna 09/03/1999 23/02/1999 $400.00 Elias Nakhle 09/03/1999 25/02/1999 $730.00 Charif Chafei 09/03/1999 26/03/19999 $350.00 Ghassan Aboud 06/04/1999 26/03/1999 $1,000.00 Nabil Milaki 06/04/1999 29/03/1999 $400.00 H & N Ibrahim 06/04/1999 30/03/1999 $400.00 M, W & M Dadoun 06/04/1999 30/03/1999 $350.00 H & N Ibrahim 06/04/1999 30/04/1999 $13,700.00 A K Moralli 10/05/1999 27 Evidence for the foregoing table is found in the affidavits of Mr Gillett and Mr Watson, exhibits C and D respectively. 28 Clause 33 of the Regulation (applicable at the material times) is in the terms following: "33(1) A solicitor who receives trust money must pay it into his or her trust bank account: (a) before the end of the next banking day after the day of its receipt, if that is practicable; or (b) if that is not practicable, as soon as practicable after that day. (2) A solicitor who makes a deposit to his or her trust bank account must ensure that: (a) a bank deposit record is produced to the bank at the time of the deposit is made; and (b) the particulars referred to in sub clause (3) are then entered in the record. (3) A bank deposit record must include provision for the entry of particulars of the following: (a) the date of the deposit; (b) the amount of the deposit; (c) whether the deposit consists of cheques, notes or coins; and (d) in the case of cheques, the name of the drawer, bank and branch and the amount of each cheque. (4) A bank deposit record is not required in the case of money credited directly to a bank account electronically or otherwise." 29 The obligation to comply with clause 33 of the Regulation is created by subsection 61(1) of the Act, set forth earlier in these reasons. 30 The failures to comply with clause 33(1) of the Regulation demonstrated by the table, above, manifests a high degree of recklessness on the part of the Solicitor with respect to his duties under subsection 61(1) and, as such, they were wilful breaches of those duties. Accordingly they constitute professional misconduct by virtue of subsection 61(7). 7.George and Laura Farah (Mr and Mrs Farah). (A) The Solicitor grossly delayed in paying Warren McKeon Dickson and the barrister Lesley with regard to Mr & Mrs Farah's matter. 31 On 10 February 1997, the Solicitor took over an action by George and Laura Farah against their insurers regarding property damage caused by fire (Mr & Mrs Farah's matter) from Messrs Warren McKeon Dickson. 32 On 13 November 1997, the Solicitor wrote to Messrs Warren McKeon Dickson in relation to Mr & Mrs Farah's matter, requesting them to transfer the file to the Solicitor. 33 By letter dated 13 November 1997, the Solicitor undertook to pay outstanding fees to Messrs Warren McKeon Dickson upon the successful conclusion of the matter. 34 Mr & Mrs Farah's matter was settled, and on 30 December 1999, the Solicitor received into his trust account, the sum of $25,000 on behalf of Mr & Mrs Farah. 35 On the following dates, according to the Solicitor's Trust Ledger card, the following amounts were paid out of the trust account for the following purposes: 08/01/1999 - $4,000 - Office costs 13/01/1999 - $14,000 - G & L Farah Settlement money 14/01/1999 - $780 - G & L Farah Settlement money 15/01/1999 - $3,500 - Office costs 05/02/1999 - $2,500 - G & L Farah $220 - Costs 36 On or about 26 August 1999, Messrs Warren McKeon Dickson and Ms Leslie Wong received fees owing to them. 37 The Solicitor, having received moneys which included fees for Messrs Warren McKeon Dickson and Ms Wong, failed to pay those fees for a period of about 8 months after settlement. 38 The facts found in the paragraph 7(A) are established by the affidavit evidence. We do not find that his conduct was the result of other than serious neglect of duty. There is nothing to suggest that the Solicitor sought any improper gain. By reason of these late payments we find the Solicitor guilty of unsatisfactory professional conduct involving such a substantial failure to reach reasonable standards of competence and diligence within the meaning of section 127 of the Act as to constitute professional misconduct. (B) The Solicitor prepared a trust ledger in Mr & Mrs Farah's matter in a manner which was misleading. 39 The trust ledger shows the following entries: 13/01/1999 - G & L Farah - $14,000 14/01/1999 - G & L Farah - $780 05/02/1999 - G & L Farah - $2,500 40 An inspection of the cheques (photocopies annexed to Mr Gillett's affidavit, exhibit "C" as C, D & E) show that cheque no. 475 in the sum of $780 (shown on the stub as "G & L Farah Settlement money re Farah") was drawn to "Bank Cheque" and cheque number 477 in the sum of $2,500 (showing no notation as to payee on the stub) was drawn to "Cash". (Note: the error appears to have no significance, but the Council's particulars seem to confuse cheques numbered 475 and 477) 41 On 11 January 1999, the Solicitor sent to Mr and Mrs Farah a memorandum of costs in the sum of $8,000 (nil disbursements) and a cheque in the sum of $14,000. 42 On 14 January 1999, the Solicitor wrote to Mr and Mrs Farah indicating that he was enclosing a cheque for $780 and on 4 February 1999, he wrote to them again indicating that he was enclosing a cheque for $2,500. 43 Mr Watson, by his affidavit - exhibit "D" - says that the Solicitor advised him that the $25,000 settlement received was applied as follows: Settlement Funds $25,000 Less Payments (I) Ghaith Krayem $3,000 (ii) Lesley Gay Wong (Barrister) $4,000 (iii)Warren McKeon Dickson $4,000 (iv) G & L Farah $14,000 ($25,000) Balance Nil 44 Mr and Mrs Farah confirmed that they received the sum of $14,000. 45 It appears from the foregoing that the trust ledger does not accord with how the cheques were in fact drawn. 46 We consider this to be a serious manifestation of unsatisfactory professional conduct but, in the absence of evidence going to the Solicitor's state of mind at the material times, we are not satisfied that it amounts to professional misconduct. 8A The Solicitor grossly delayed effecting a transfer from Mr & Mrs Syahbahar, and Mr & Mrs Nesirwan, into the names of Mr & Mrs Nesirwan, only, in relation to a Greenacre Property. 47 In about December 1996, Mr and Mrs Nesirwan negotiated to purchase a property at 130 Wilber Street, Greenacre, (the Greenacre property) for $236,000. 48 In accordance with Mr & Mrs Nesirwan's instructions the Solicitor prepared a transfer in the names of Mr & Mrs Syahbahar, and Mr & Mrs Nesirwan. 49 On 6 January 1997, Mr & Mrs Nesirwan paid a deposit of $1,000 to Century 21 Real Estate, Wiley Park. 50 On 9 January 1997, Mr & Mrs Nesirwan paid the balance of the deposit on the property to Century 21 Real Estate, Wiley Park, in the sum of $22,600. 51 On 10 January 1997, Mr & Mrs Nesirwan paid the sum of $250 to the Solicitor in account of costs. 52 On 24 January 1997, Mr & Mrs Nesirwan handed to the Solicitor a bank cheque in payment of stamp duty of $6,754. 53 On 31 January 1997, the Solicitor paid the sum of $6,754 to the Office of State Revenue on behalf of Mr & Mrs Nesirwan. 54 On 3 February 1997, Mr Nesirwan attended on the Solicitor and instructed him to amend of the transfer to delete the names of Mr & Mrs Syahbahar, leaving Mr & Mrs Nesirwan, only, as transferees. 55 On 5 February 1997, Mr & Mrs Nesirwan repeated the above instructions to the Solicitor and handed to the Solicitor three cheques in the amounts off $27,732, $35,005.65 and $150,935.35 (total $213,673). 56 On 20 February 1997, Mr Nesirwan received a letter from the Solicitor including a memorandum of costs addressed to Mr & Mrs Nesirwan and Mr & Mrs Syahbahar as purchasers. 57 On 22 February 1997, Mr Nesirwan attended the Solicitor's office and left a message again instructing the Solicitor that the transfer should be to Mr & Mrs Nesirwan, only. 58 On 20 March 1997, a Certificate of Title was issued in the names of Mr & Mrs Nesirwan and Mr & Mrs Syahbahar. 59 On 25 March 1997, the Solicitor sent a letter to Mr & Mrs Nesirwan and Mr & Mrs Syahbahar, indicating that the transfer had been completed and enclosing the Certificate of Title issued on 20 March 1997. 60 On 26 March 1997, Mr Nesirwan attended the Solicitor's office instructing the Solicitor to change the names of the transferees to Mr & Mrs Nesirwan. 61 Between 26 March 1997 and 3 April 1997, Mr Nesirwan either attended the Solicitor's office or telephoned him daily instructing him to amend the transfer as requested. 62 On 3 April 1997, the Solicitor requested Mr Nesirwan to supply the Solicitor with a cheque in the sum of $2,624 for the purpose of payment of stamp duty on the purchase of the Greenacre property. 63 On 10 April 1997, Mr Nesirwan attended the Solicitor's office and left a cheque in the sum of $2,624. 64 Between 10 April 1997 and 3 November 1997, Mr Nesirwan telephoned the Solicitor's office requesting him to amend the transfer. 65 During the period 3 November 1997 to 4 February 1998, the Solicitor moved his practice without informing Mr and Mrs Nesirwan. 66 On 1 April 1998, having located the Solicitor's new address, Mr Nesirwan attended the Solicitor's office in Sydney and asked him for the certificate of title amended as requested. 67 On 29 April 1998, Mr Nesirwan attended the Solicitor's office. The solicitor handed to him a photocopy of a Certificate of Title which bore the names of Mr and Mrs Nesirwan only, and which was dated the 20 March 1997. 68 On 19 October 1998, a Certificate of Title was issued for the Greenacre property which showed only the names of Mr and Mrs Nesirwan as registered proprietors. 69 In our opinion the gross delay proved to have occurred and the circumstances attending that transaction demonstrate unsatisfactory professional conduct involving a substantial failure to reach reasonable standards of competence and diligence amounting to professional misconduct: see subsection 127(1) of the Act. 8B The Solicitor provided a false photocopy Certificate of Title in respect of folio identifier 89/11603 to Mr Nesirwan, which purported to note that Mr & Mrs Nesirwan were the registered proprietors of the above-mentioned Greenacre property when this was not the case. 70 The Council relies on the facts already set forth in these reasons. 71 This was a serious and, for a time, successful attempt to deceive Mr & Mrs Nesirwan. As such, we consider it to be a manifest instance of serious professional misconduct. 8C The Solicitor falsely altered the date on the transfer from Mr & Mrs Syahbahar and Mr & Mrs Nesirwan to Mr & Mrs Nesirwan from 21 May 1998 to 21 August 1998 in order to avoid the payment of a penalty for late stamping of the transfer which would have been payable in the event that the Office of State Revenue had become aware of the true situation. 72 We refer to facts set forth above. 73 On or about 21 May 1998, the Solicitor prepared a transfer showing the names of Mr & Mrs Nesirwan and Mr & Mrs Syahbahar as transferor and Mr & Mrs Nesirwan's as transferees and which was signed by all parties. 74 On or about 21 August 1998, the Solicitor amended the transfer by changing its date from 21 May 1998 to 21 August 1998. 75 On 25 May 1999, Mr Gillett interviewed the Solicitor, in relation to a transfer stamped 19 October 1998 as to how the date of the transfer came to be altered from 21 May 1998 to 21 August 1998. The Solicitor acknowledged that he had altered the date. 76 This was a serious deception and clearly constituted professional misconduct. 8D The Solicitor failed to honour an obligation to make payments by office account cheque drawn in favour of the Office of State Revenue for payment of stamp duty on the transfer from Mr & Mrs Syahbahar and Mr & Mrs Nesirwan to Mr & Mrs Nesirwan, resulting in the Office of State Revenue issuing a Statement of Liquidated Claim against Mr Nesirwan for the reimbursement of this amount. 77 We refer to facts set forth above. 78 On 7 July 1999, the Chief Commissioner of State Revenue issued a Statement of Liquidated Claim against Mr & Mrs Nesirwan in the sum of $1,465 for "unpaid stamp duty" made up of Stamp Duty of $2,515 less $1,050 paid on 19 October 1998 plus interest. 79 On 26 July 1998, Mr Nesirwan received a letter from the Clerk of the Local Court at Parramatta warning that he had 28 days to pay a default judgment for $1,703.59. 80 On 16 August 1999, Mr Nesirwan paid the amount of $1,703.60 to the Office of State Revenue in payment of the judgment debt. 81 The failure to pay Stamp Duty was a serious and gross failure of duty amounting to professional misconduct within the meaning of section 127 of the Act. We are strongly influenced to that finding by the circumstance that it was not an isolated failure but that it formed but one serious failure of a long and consistent series of them. If the error had been exceptional or 'out of character', the mere oversight to pay the money may have been categorized merely as unsatisfactory professional conduct. 8E The Solicitor failed to ensure that the balance of Stamp Duty of $1,465 on a transfer dated 21 August 1998 in relation to Mr & Mrs Nesirwan's matter was effectively paid to the Office of State Revenue. 82 We refer to facts set forth above. 83 On 19 October 1998, the Solicitor drew a cheque (No.724) on his office account for $1,465 for payment to the Office of State Revenue in Mr & Mrs Nesirwan's matter which the bank did not honour. 84 To issue a cheque for payment of a client's debt without ensuring that it would be met on presentation was a serious failure of duty to the client. There can be no doubt that in the circumstances the failure amounted to professional misconduct. 9A The Solicitor misled Mr David Re, a barrister, (Mr Re) with regard to the receipt of fees for an appearance by Mr Re on behalf of Mr Samer Fakouri, a client (Mr Fakouri). 85 In or about March 1997, Mr Fakouri instructed the Solicitor in relation to a criminal matter in which Mr Fakouri had been charged with shoplifting and possession of cannabis. 86 On 24 March 1997, the Solicitor forwarded to Mr Fakouri a letter requesting the payment of $1,200 in order to represent him in Court on 19 May 1997. 87 On the morning of 19 May 1997, the Solicitor telephoned Mr Re of counsel in his chambers with a view to retaining him to appear at Bankstown Local Court on that morning. Mr Re informed of the Solicitor that his fee for appearing would be $700. Mr Re asked whether the Solicitor was then in possession of fees to cover his appearance. The Solicitor informed Mr Re that he was in possession of money from Mr Fakouri, sufficient to cover Mr Re's fees. 88 After appearing on behalf of Mr Cory, Mr Re telephoned the Solicitor to inform him of the results and thereafter sent to the Solicitor his memorandum of fees on the same day. The Solicitor informed Mr Re that he would forward Mr Re his fees. 89 On 23 June 1997, the Solicitor forwarded to Mr Fakouri a letter requesting the payment of $1,200 including Mr Re's fees of $700. 90 On 24 December 1997, Mr Re's fees not having been paid, forwarded the Solicitor a letter regarding the non-payment. Still unpaid, on 13 March 1998, Mr Re telephoned the Solicitor regarding his fees. The Solicitor said that he would "look into it". 91 On 2 April 1998, Mr Re again telephoned the Solicitor regarding his unpaid fees. The Solicitor informed Mr Re that Mr Fakouri had not paid him and that he, the Solicitor, would personally pay the fees, "within a couple of days". 92 On 14th June 1998, with the fees still not paid, Mr Re sent the Solicitor a letter of demand, to which he received no response. 93 On 24 November 1998, Mr Re commenced proceedings in the Local Court for the recovery of $700 for his fees, plus interest and costs. On 19 January and 26 February 1998, Mr Re wrote to the Solicitor in regard to his fees, without response. On the 5 March 1999, Mr Re filed an affidavit of debt and an application for a writ of execution in his action for the recovery of fees. On 4 May 1999, Mr Re received an amount of $857.79 in payment of his fees from the New South Wales Sheriff's Department. 94 For the Solicitor knowingly to inform counsel falsely that an amount of money sufficient to cover his fees was already in the Solicitor's possession, in order to induce counsel to accept a last minute retainer, was unsatisfactory professional conduct amounting, by virtue of section 127 of the Act, to professional misconduct in respect of the matter, and we so find. Knowing that the possession of funds sufficient to pay counsel may have been a condition of the acceptance of a retainer, the Solicitor was bound to hold those funds for the purpose of paying counsel and not to disburse it for any other purpose without counsel's consent. But, in fact, the Solicitor did not request his client for money which included counsel's fees until 23 June 1997, having given counsel the false assurance on 19 May 1997. 9B The Solicitor grossly delayed in paying fees to Mr Re. 95 On the foregoing facts this allegation is manifest. No other finding is possible. The grossly inordinate delay in payment was at the least unsatisfactory professional conduct. It is really an integral part of 9A and does not call for separate consideration. 9C The Solicitor failed to respond to letters from Mr Re dated 19 May 1997, 24 December 1997, 14 June 1997, 19 January 1999 and 26 February 1999. 96 This finding is not open on the facts referred to and relied upon. There is evidence that a number of letters, including some of those referred to in Particular 9C of the information, were sent to the Solicitor by Mr Re. Letters referred to in the particulars included those dated 23 June 1997, 24 December 1997, 14 June 1998, 19 January 1998, 26 February 1998. The particulars refer to the letters of 14 June 1998, 19 January 1998 and 16 February 1998 as those not having been responded to. However, Particular 9C, on the one hand, and the particulars referred to, on the other, are difficult to reconcile with any confidence. We make no finding on 9C. 10 The Solicitor misled Mrs Ghananim when he informed her that he had filed documents in the Family Court when the said documents had not been filed. 97 On 23 April 1998, the Solicitor was instructed by Mrs Ghananim in relation to a Family Law matter. In the course of conversation with Mrs Ghananim at a later date, the Solicitor informed her that he had filed certain unspecified documents, which was not true. 98 On 4 November 1998, the Legal Services Commissioner wrote to the Solicitor regarding the Ghananim matter. That letter included amongst other things paragraphs 6 and 7 as follows: "6. You agree that you said to Mrs Ghananim that the relevant documents had been filed with the Court when in fact they had not. 7. You agree that you should have told your client that you did not file the documents and that you could not do so." 99 These things had been said in the course of a conversation with Mr Jim Milne and Ms Sian Leathem of the office of the Legal Services Commissioner on 19 October 1998. 100 By letter dated 19 April 1990, the Solicitor expressed agreement with the contents of the letter of 4 November 1998 of the Legal Services Commissioner. 101 The false statement concerning the filing of documents in the circumstances was seriously unsatisfactory professional conduct amounting to professional misconduct, by virtue of section 127 of the Act involving a substantial failure to reach a reasonable standard of competence and diligence. 11 The Solicitor failed to comply with an undertaking to the Supreme Court 102 On 5 February 1996, "Firths the Compensation Lawyers" (Mr Firth) received instructions from a Mr Robinson to take over his District Court Common Law claim. 103 Between 5 February 1996 and 1 November 1996, Firths acted for Mr Robinson. 104 By 1 November 1996 Mr Firth had the proceedings set down for hearing by arbitration in the District Court on 25 November 1996. 105 On 1 November 1996, Mr Robinson withdrew instructions from Firths and again instructed his original solicitors, Messrs Caldecott & Williams: the Solicitor's firm at the time. 106 On 4 November 1996, Firths forwarded the majority of Mr Robinson's file to Messrs Caldecott & Williams together with an assessment of fees and disbursements. 107 On 2 April 1997, according to Mr Watson's affidavit, sworn 23 March 2004, the Solicitor was appointed in place of Messrs Caldecott & Williams as Mr Robinson's solicitor. 108 On 25 February 1998, Mr Robinson's case reached settlement each party to bear its own costs. An amount of $1,000 was requested to be paid to the Health Insurance Commission leaving a balance of $9,000 to be paid to Mr Robinson. 109 On 6 April 1998, Firths wrote to Messrs Caldecott & Williams enquiring as to the progress of Mr Robinson's matter. 110 On 14 April 1998, Messrs Caldecott & Williams wrote to Firths informing them that Mr Robinson had taken over the conduct of his matter himself and that that firm had not heard whether there had been an outcome of the matter. 111 On 18 May1998, Mr Firth ascertained from the District Court that the Court proceedings had been settled by terms of settlement dated 25 February 1998. 112 On 19 May 1998, Firths wrote a letter informing the Solicitor that it had come to their attention that Mr Robinson's case had been successfully completed and therefore that Firths costs and disbursements were due and payable. The letter enclosed an authority for the defendant for the payment of Firth's outstanding professional costs and disbursements in the sum of $3,063.00 from the proceeds of settlement. 113 On 21 May 1998, in a telephone conversation between Mr Firth and the Solicitor, Mr Firth informed the Solicitor that he had not been reimbursed for his costs and disbursements. The Solicitor said that he was not aware of that and he undertook to hold any funds that he had received in trust subject only to receiving direct instructions from the client to the contrary. On the same day Mr Firth sent a facsimile message to the Solicitor confirming the situation. 114 On 21 May 1998, Mr Firth sent a facsimile message to the Solicitor confirming the position. 115 On 10 June the 1998, Mr Firth had a further telephone conversation with the Solicitor. Mr Firth said, "Have you received any instructions from Mr Robinson?". The Solicitor said, "I have not received any instructions either way." Mr Firth said, "Are you able to operate on the basis that funds will be held until you have instructions to the contrary?" The Solicitor said, "I think I would be able to do that." The Solicitor said, "I will let you know when I receive the money and I will let you know then if I have received instructions or not." 116 On 16th of June 1998, Mr Firth had a further telephone conversation with the Solicitor. Mr Firth said, "Have you received the cheque?" The Solicitor said, "No." Mr Firth said, "Have you received instructions?" The Solicitor said, "No, I have not heard anything." Mr Firth said, "Well then I have to ask you straight out will you hold from the settlement proceeds a sum sufficient to protect me for my professional costs and disbursements pending either agreement or if necessary assessment?" The Solicitor said, "Yes, provided I am not in breach of any regulations." Mr Firth said, "On that basis I will not proceed with any application to the Supreme Court at this time." 117 On 19 June 1998, Messrs Corrs Chambers Westgarth, Solicitors wrote to the Solicitor enclosing settlement cheques in the sums of $1,000.00 and $8,000.00 in the matter of Robinson v Sydney Private Clinic. The Solicitor's trust account ledger does not record anything received. The ledger card for the Robinson matter was entirely devoid of entries when examined by Mr Watson: his affidavit p.13. 118 On 24 June 1998, Mr Firth received a letter from the Solicitor, dated the 22 June 1, 1998, which said, in part, "We advise that we have this day obtained instructions from Mr Robinson in relation to this matter and advise that we have been instructed NOT to pay any money to you when it is received from the defendant. Further Mr Robinson has instructed us to release the money to him as soon as we are able. We further advise that we have as yet not received the settlement monies from the defendant although they have advised that the cheque has been sent. We are sorry that we could not be of any further assistance in this matter." Annexure L to Mr. Watson's affidavit annexes a copy of the July page of the Solicitor's Cash Receipts Book. It shows an entry for an indecipherable date in July of receipt of a cheque for $8,000. The particulars describe it as "AMP - Settlement Money re: Robinson. 119 On 24 Jun 1998, Firths wrote to the Solicitor informing him that his letter left Firths with no alternative other than to approach the Supreme Court for the appropriate orders, and expressing regret that that course had been made necessary. The letter also said that Firths would have no alternative other than to seek an order that the Solicitor's client to pay the costs of the application on an indemnity basis. 120 On 25 June 1998, the Supreme Court made an interim order pending the hearing of the summons that Mr Robinson do all acts and things and execute all documents necessary to pay into court the verdict and judgment obtained in the District Court in proceedings between Mr Robinson as plaintiff and Sydney (Private) Clinic Pty Limited as defendant. In this connection it may be significant that the letter from Messrs Corrs Chambers Westgarth was dated 19 June 1988. 121 On 27 July 1998, the matter came back before the Supreme Court. The Court noted an undertaking from the Solicitor to retain the funds in his trust account. The material parts of the transcript of proceedings before Smart J was in the following terms: "HIS HONOUR: I note the undertaking of the defendant by his solicitor [the Solicitor] that the cheques representing the proceeds of the verdict will be paid into his solicitor's trust account and the sum of $3000 will be retained in this trust, that trust account pending the further order of the Court. I add to the undertaking the words, "or the written agreement of the parties." DALHUNTY: we were seeking to proceed on the solicitor's lien rather than a tax. HIS HONOUR: I will say the 4,000. If default of the agreement as to costs, there is to be a taxation of such costs in accordance with the rules of the District Court. Costs of this application to be paid by the defendant. I refuse costs on an indemnity basis with liberty to apply if need be." 122 That undertaking was noted in the Report of Appearance by Ms K.M. Dalhunty of Counsel for Mr Firth dated 27 July 1998. 123 The undertaking was given in the circumstance that cheques amounting to $9,000.00 had been sent to the Solicitor on 19 June 1998 by Messrs Corrs Chambers Westgarth: see above. Cheques which seem not to have found there way into the Solicitor's trust account. We were not informed whether or when those cheques were presented. Where was the money at the time the undertaking was given? Had it been disbursed? 124 On 15 February 1999, a certificate as to determination of party/party costs for $4,335.90 was issued, and on 9 September 1999, a certificate as to determination of solicitor/client bill of costs was issued for $4,478.00. 125 On 23 August 1999, Mr Firth received a letter enclosing the Solicitor's cheque in favour of Firths for $4,000.00. Omitting formal parts, the letter was in the following terms: "I refer to the above matter and advised that in late 1998 Mr Robinson passed away. Unfortunately this file has not been attended to since that time and I regret the delay in contacting you. I note that I was holding a sum of $4,000 until the costs matter was resolved. I now enclose a cheque for that sum and ask that you hold this in trust if the matter has not been finalised. If an assessment has been issued I would ask that you simply provide me a copy of the assessment. My understanding is that you (are) at liberty to put these funds towards your costs as soon as they have been assessed. If there is any surplus I advise that there is a debt of $875 owing to the Central Sydney Area Health Service for Mr Robinson. This is the only debt that I am aware of and any surplus should go to satisfy the debt." 126 The cheque for $4,000 dated the 23 Aug 1999 was drawn by the Solicitor against his office account. It was not a trust account cheque. 127 On 19 August 1999, Mr Andrew Brown, Solicitor and Notary, was appointed manager of the Solicitor's practice by the Council. In his letter to Mr Firth dated 7 April 2000, he noted that on 19 August 1999, the Solicitor's application to renew his practising certificate for the 1999-2000 year was formally refused by the Council. The Solicitor has not held a Practising Certificate (and, therefore, has not been a solicitor) since that date. Mr Brown said that as at the date of his appointment no moneys were held in the practice trust account on behalf of either Firths or Mr Robinson. He also noted that he had no evidence to suggest that any such money was ever held. There is no indication that the cheque for $4,000 that the Solicitor sent to Mr Firth was presented to, or dishonoured through, the practice's trust account. Accordingly, Mr Brown worked on the basis that the Solicitor sent Firths a cheque drawn on his office account or on another personal account. We have already observed that the cheque purports to have been drawn on the office account. 128 On 1 September 1999, Mr Firth received a letter from the solicitor dated 30 Aug 1999, in the following terms: " I refer to the above matter and note that are due to a bank error the cheque that I previously forwarded to you may have been returned to you by the bank unpaid. I sincerely apologize for this and ask that you represent that cheque for payment. I am closing my practice and the bank made an error as to which accounts had been stopped. Once again I apologize for this" 129 By letter dated 3 Apr 2000, Macquarie Bank Limited informed Mr Firth that the cheque for $4,000 had been dishonoured. 130 Some of the foregoing facts are included to provide a more complete picture but have only marginal relevance to the central issue whether the Solicitor breached an undertaking to the Court. 131 Failure by a legal practitioner to adhere to an undertaking given to a Court is seriously wrong and has been commented on by the Supreme Court and by this Tribunal. As an officer of the Supreme Court, the Solicitor was solemnly bound by his undertaking. His failure to honour the undertaking is unquestionably professional misconduct. Under no circumstances can an obligation to comply with an undertaking to the Court be avoided without the consent of the Court itself to which the duty is owed. 132 Several serious questions still remain unanswered in respect of the matter of the failure to comply with the undertaking. However, we draw no inference unfavourable to the Solicitor by reason of unanswered questions. 12 Failure of Solicitor to act on his client's instructions 133 In August 1997 Mr Salah Chami instructed the Solicitor to take proceedings are in relation to a claim against an insurance company. Mr Salah Chami, frustrated by what seemed to him to be a lack of action by the Solicitor, brought the matter to the attention of the Legal Services Commissioner in December 1998. Later, the Solicitor was presented with a Notice under section 152 of the Act dated 6 August 1999 by the Law Society of New South Wales. By letter verified by statutory declaration dated 23 Aug 1999 the Solicitor informed the Law Society of New South Wales in the following terms: "I refer to the above matter and I admit that there was an unacceptable delay in dealing with Mr Chami's matter. This related to a motor vehicle accident in which Mr Chami was claiming the cost of repairs to his car. He had provided me with a letter from the insurance company and a quote for the repairs. I misplaced those documents but was too embarrassed to advise him of this. I do not recall telling Mr Chami that his case was taken to court, however I did say to him that he would receive his money very soon. I said this because if I could not locate the documents then it was my intention to pay Mr Chami the money and then keep looking for the documents. I was unable to locate those documents, and I still have not located those documents. However on 3 March 1999 I paid to Mr Chami a sum of $1,670 being the amount he was claiming. I had not received any correspondence from you at that stage nor had he indicated to me that he had made a complaint." 134 This was clearly unsatisfactory professional conduct, and we so find. Conclusion 135 On any view of the offences that we have found to have been committed by the Solicitor, they are collectively, and in several cases individually, very serious, and in the absence of some powerfully countervailing matter there is only one possible consequence, namely, removal of the Solicitor from the Roll of Legal Practitioners, and an order for costs as sought. However, procedural fairness involves our giving the Solicitor the opportunity to present evidence and make submissions if he so desires. The matter will be listed for that purpose if the Solicitor requests us to do so. Otherwise we will make the orders requested by the Council, namely: (i) An order that the legal practitioner's name be removed from the Roll of Legal Practitioners. (ii) An order that the legal practitioner pay the Law Society's costs of and incidental to the proceedings, as agreed or as assessed under Division 6, Part 11 of the Legal Profession Act 1987. 136 Although served with all of the evidential material and on ample notice of these proceedings, the Solicitor elected to take no part in them. This has had two major effects. Firstly, although sufficient proof of all material allegations was required by the Tribunal, we more readily accepted the material allegations of the Council than we might have been able to do if the Solicitor had denied, or confessed and avoided any of them. The second major effect is that we were left without any explanation for the Solicitor's conduct, or any indication of recognition by him of the unacceptability of his conduct. 137 A copy of these reasons should be supplied to the Solicitor forthwith. 138 The matter will also be relisted in order to hear Mr Firth's claim. 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.