New South Wales Bar Association -v- Abdul-Karim [2003] NSWADT 60

CITATION: New South Wales Bar Association -v- Abdul-Karim [2003] NSWADT 60 DIVISION: Legal Services Division APPLICANT PARTIES: Council of the New South Wales Bar Association RESPONDENT Michael Saadey ABDUL-KARIM FILE NUMBER: 012029 HEARING DATES: 04/11/2003 - 6/11/2003 SUBMISSIONS CLOSED: 11/06/2002 DATE OF DECISION: 03/27/2003

BEFORE: West J QC - Judicial Member; Mattila J - Judicial Member; Brehe D - Member APPLICATION: Professional Misconduct - incorrect advice - Professional Misconduct - insert false or misleading information in a document MATTER FOR DECISION: Principal matter Evidence Act 1995 LEGISLATION CITED : Legal Profession Act 1987 Real Property Act 1900 CASES CITED: Briginshaw v. Briginshaw (1938) 60 CLR 336 National Mutual Life Association of Australia Ltd & Ors v. Grosvenor Hill (QLD) 183 ALR 700 APPLICANT REPRESENTATION: P Mahony, barrister RESPONDENT In person ORDERS: 1. Matter to relisted at a time to be fixed for further submissions regarding penalty.

1 Michael Saadey Abdul-Karim (the Barrister) was admitted to practice in the Supreme Court of NSW on 2nd August 1991. At the time of the alleged conduct the subject of these proceedings, his name was on the roll of legal practitioners. 2 The Council of the New South Wales Bar Association (the Association) claims that the barrister is guilty of professional misconduct, and brings these proceedings seeking a finding to that effect together with consequential orders. At the conclusion of the hearing of the proceedings, the Association through its Counsel submitted that we should make our findings upon whether or not the charge of professional misconduct has been made out and, if it had, then hear further submissions on penalty. We acceded to that submission. 3 The grounds upon which the Association moved for its findings are four. They are related by subject matter but are propounded as free standing grounds namely: "1. On or about 28 May 1998, the barrister advised Pinebelt Pty Limited ("Pinebelt") and/or its solicitor Mr Fallins that Pinebelt had an undoubted caveatable interest in the nature of a trust arising from an option it held to purchase the factory premises of Mr Bagley in Wagga Wagga, when he knew that the Supreme Court of New South Wales had determined that any such interest was unenforceable and not properly the subject of a caveat in respect of the subject land. 2. On or about 29 May 1998, the barrister advised and encouraged Pinebelt and Mr Rukavina, a director of Pinebelt, to lodge Caveat No 5019019V, when he knew or ought to have known that such caveat contravened s74 O of the Real Property Act 1900. 3. The barrister inserted into the caveat a description of the alleged interest of Pinebelt in the subject land which he then knew to be false or misleading, by reason that the Supreme Court had already determined that such interest was unenforceable and not properly the subject of a caveat in respect of the land. 4. The barrister inserted into the caveat the expression "Appeal against judgment of Justice Hamilton", when he had no knowledge that any such appeal had been brought." 4 It can be seen at once that the events relied upon by the Association occurred in late May 1998. These proceedings came on before as for hearing on 4th November 2002 and occupied some two and one half days of hearing time – some four and one half years after the occurrence of the events the subject of the information. 5 In view of the seriousness of the proceedings from the point of view of Mr Abdul-Karim, who appeared in person in his own defence, we requested a transcript be made available for our use in considering our decision. That transcript became available on 8 December 2002. We have endeavoured to prepare these reasons for decision at our earliest opportunity given intervening commitments and the law vacation. 6 By his formal Reply, the barrister says that: "1. As to ground 1 of the Legal Practitioner says that the thrust of the advise (sic) on the question of caveatable interest referred to and dated 28th May 1998, related to a lease ordered by the Supreme Court in favour of Pinebelt to take effect from 21 August 1997. Further as at 28th May 1998 the lessor had either surrendered or was in the process of surrendering possession of the demised property subject to lease to the mortgagee who wished to take vacant possession. 2. As to ground 2 the Legal Practitioner unreservedly denies that on 29th May 1998, he advised and encouraged Pinebelt or anyone of its directors to lodge a caveat. The Legal Practitioner says that at all times when he was briefed to act for Pinebelt he acted under instructions and in accordance with his brief. 3. As to ground 3 the Legal Practitioner unreservedly denies that he inserted interest of Pinebelt which he knew to be false and misleading. 4. As to ground 4 the Legal Practitioner says that as at 28th May 1998, he had prepared all the documents necessary to lodge an appeal against Justice Hamilton's judgment and had forwarded these documents to his instructing solicitor. At the time the expression was inserted in the caveat the Legal Practitioner did not know, neither did Ivan Rukavina know as to whether John Fallins solicitors had or had not filed the appeal. In the circumstances the Legal Practitioner says that abundant caution dictates that such an expression be inserted. The Legal Practitioner was under obligations to protect his position and that of his instructing solicitor. 5. In answer to the whole Information filed on 8th November 2001, the Legal Practitioner says that the Applicant's information deliberately misrepresents and/or misunderstood the Pinebelt brief or was recklessly indifferent to understanding the brief with which the Legal Practitioner was concerned: (i) Failed to obtain any statement or seek any explanation from John Fallins solicitor, who at all relevant times was the Legal Practitioner's instructing solicitor. (ii) Failed to obtain any statement of (sic) seek any explanation from any of the directors of Pinebelt. (iii) Failed to obtain any statement of Ivan Rukavina, Pinebelt director, as to event of 28th May 1998. (iv) Failed to inquire as to advices on evidence given by the Legal Practitioner to Pinebelt prior to 28th May 1998. (v) Failed to appreciate the significance of proceedings commenced by National Mutual Trustee against John Bagley in March 1998 for possession of premises leased by Pinbelt by order of the Supreme Court. (vi) Failed to take into consideration Pinbelt's instructions in relation to proceedings commenced by National Mutual Trustee and how those instructions reflected on the conduct of proceeding number 3422 of 1997. 6. In further answer to the whole Information the Legal Practitioner says that the matter having being dealt with to finality in the Supreme Court the Information represents an attack on the hearing in the Supreme Court and is estopped on the grounds of res judicata and double jeopardy." 7 It is apparent that the barrister in the written Reply which he filed, took serious issue with the allegations made by the Association and went so far as to allege misguided yet deliberate behaviour on the part of the Association. Paragraph 6 seems to us to be based on a misunderstanding of the nature of the present proceedings. 8 The barrister opened his defence and then read an affidavit sworn by him. He was cross examined at some little length by counsel for the Association. However after a number of exchanges between the Tribunal and the barrister during the course of the opening statements and what appeared to be a foreshadowing by the barrister of a somewhat wider evidentiary defence than had been filed pursuant to the Tribunal's pre-hearing directions, the point was reached where the barrister accepted that the essential factual issues upon which he, the Association and the Tribunal were required to focus, were those of and surrounding the 28th May 1998 concerning: 1. his accompanying a representative of Pinebelt Pty Limited ("Pinebelt") to the Land Titles Office (LTO) at Sydney; 2. the events which happened involving the barrister at the LTO that day when a caveat was drafted and lodged in respect of certain lands at Wagga Wagga; 3. advice the barrister gave in connection with the preparation and lodgement of that caveat and in connection with any proposed appeal against a decision of Hamilton J of 14 May 1998; 4. the barrister's knowledge about and appreciation of his role in the events identified in 1, 2 and 3 above. 9 Before proceeding to trace the events which lie at the heart of these proceedings, and to explore the positions of the Association and the barrister in respect to them, we wish to record that we have not found this matter free of difficulty. 10 The barrister represented himself. We recognise that in so doing his evidence may well be influenced by his emotional involvement in seeking to defend himself against serious allegations and at the same time seeking to explain clearly and truthfully why he did what he did. Indeed, on the second day of the hearing before us, the Chairman had the following exchange with the barrister: West: Let me just finish. I understand you are appearing for yourself. That is a decision which you have made. The Witness: Yes. West: And in those circumstances, you ought to be aware that you do need to do yourself justice and I understand that you are emotionally involved in this. It would be odd if you were otherwise. I just think that you are letting your emotion cloud your intellectual judgment and I would wish that you do not do that. The Witness: Thank you for that. West: So just take it easy. Okay? The Witness: Sometime I just – thank you for that. I cant – you should remember I come from Middle East. I was born in the Middle East. West: Well, I'm … Mattila: Yes, but you are a barrister and have been for some time. West: But you have yourself for a client. The Witness: Yes, thank you. West: That is the difficulty. Yes, Mr Mahony. Mahony: Excuse me, members of the Tribunal. Perhaps if I could deal with it after the morning tea adjournment. I've lost the exact wording of the … West: I'm sorry to … Mahony: No, not … West: My remarks have done that. But it just seemed to me that it was important that we just call a halt. All right. Very well, we will adjourn until 10 to 12. T40 line 4 to line 46. It will be obvious to anyone who reads the transcript, as it was to us at the hearing, that the barrister's method in answering questions when under oath was often circuitous, imprecise and sometimes bordered on the illogical. We formed the view that in many ways he became his own "worst enemy" when answering questions. 11 We have considered carefully his answers, bearing in mind his demonstrated tendency to give unresponsive answers to questions – even where he could have had no serious interest in being unresponsive. We have approached our task mindful of the decision of the High Court of Australia in Briginshaw v. Briginshaw (1938) 60 CLR 336 at 362 to 368 (per Dixon J). 12 We have been most concerned that we do not allow his manner of response to deflect us from seeking to understand what he was seeking to convey nor to let this tendency deflect us from our duty. To take but one example, at the very conclusion of the proceedings before us, we invited the barrister to reply to a submission made by Counsel for the Association as to how we should treat a claim made by the barrister that in proceedings before Hamilton J he had not been permitted by the judge to properly or fully respond to a specific question and, thus, to allow the judge to labour under an enduring misapprehension as to what the barrister's instructions had relevantly been on the vexed question of the existence of a trust which would impress itself on the subject property at Wagga Wagga: T38 line 45 to T39 line 30 of 6 November 2002. The barrister's response was: "[Counsel], I just wish to say that I paid for out of my own pocket and he was the counsel that was available on – he knew in relation to anything that transpired subsequent to that. Because in this light Mr Chairman, I sort of say it and I think because I was asked questions I think in the witness box as to why I didn't appeal decisions. So in relation to that's – that was the situation, I was not invited to do so." 13 What we take the barrister to have meant by his answer was that he was not invited by Hamilton J to explain his instructions – as distinct from answering the direct question which Hamilton J had asked him: T36 line 40 to T37 line 5 of proceedings before Hamilton J 02/08/99 (Reference – Affidavit of Rosemary MacDougal sworn 4 January 2002 Page 84 – 85). 14 Much of the material which the barrister cites as supportive of his position is reliant for its acceptability upon his say so alone. Especially is this so as to: (a) what he claims was known to him from his instructions from the Rukavinas and which he asserts caused him to form and continue to hold the opinion that there existed a trust in respect of the interest in the Wagga Wagga property; (b) his claims that he was asked by Mr Ivan Rukavina to draft the form of caveat lodged at the LTO on 28.5.98; (c) his claim that Rukavinas were in effect being harassed by National Mutual in their occupation of the Wagga Wagga property – contrary to their right to quiet enjoyment ordered by Hamilton J; (d) his claim first made before Hamilton J that he was merely acting as a tour guide in accompanying Mr Ivan Rukavina to the LTO on 28.5.98; (e) his claim that in drafting the caveat he was under a duty to protect himself and his instructing solicitor (Mr Fallins); (f) that he was entirely unaware of the executed Withdrawal of Caveat form which Mr Ivan Rukavina had in his possession at the Land Titles Office on 28.5.98 and that same was lodged that day by Mr Rukavina; and (g) that he in fact filled out an Application to Withdraw Caveat form at the Land Titles Office that day as part of his "assistance" to Mr Rukavina. 15 No serious attempt has been made by the barrister to call either Mr Peter or Mr Ivan Rukavina or Mr Fallins in relation to any of the matters before us. However there are numerous documents in evidence which bear to a greater or lesser extent upon the resolution of the matters thrown up by the testimony of the barrister, and we shall deal with these in due course. We should say at the outset that a claim by the barrister that the Association should have called or attempted to call the Rukavina's or Mr Fallins is entirely without merit. We reject it. The Facts 16 In about August 1994, one Mr John Bagley ("Bagley") granted to Pinebelt, a company owned or controlled by the Rukavina family, an option to purchase factory premises in Wagga Wagga ("the Land"). 17 On or about 28 August 1997, Pinebelt lodged a caveat over the land in respect of its option based interest. 18 On 19 December 1997 Hamilton J sitting in Equity in the Supreme Court of NSW gave judgment in an action brought by Pinebelt against Bagley in which Pinebelt sought specific performance of a contract to purchase the land. The contract was alleged to arise from the said option. The barrister appeared in that action for Pinebelt. The suit failed – his Honour holding that Pinebelt was not ready, willing and able to complete the contract alleged. Judgment was entered for Bagley. 19 No appeal was brought from this judgment of Hamilton J. However, in 1998, an application was made to Hamilton J by Pinebelt for the amendment of Points of Claim in the specific performance suit so is to allege that in the light of the failure of the claim for specific performance, nevertheless the Court should make a declaration that Bagley held the land in trust, upon a constructive trust, for Pinebelt or, alternatively, that the land was charged in favour of Pinebelt in respect of amounts of money which Pinebelt had expended upon it. 20 On 14 May 1998, Hamilton J found that: "The case for a constructive trust as formulated for the plaintiff is quite inchoate. So far as it can be understood, it seems to be said to arise from a common intention the parties formed that the property should be transferred to the plaintiff and from the fact that the plaintiff made certain payments in respect of the property on the basis of that intention. The difficulty is that the evidence in the case, and even the proposed points of claim now propounded, … proceed on the basis that that intention culminated or was encompassed in the contractual arrangement whereby the plaintiff was granted an option to purchase the property, the payments providing the consideration for that grant; that option was exercised; and thereafter the parties proceeded on the basis that a contract for sale was on foot. The defendant maintained that he had validly terminated that contract: the plaintiff claimed to enforce it specifically; it was upon that claim that I entered judgment for the defendant on the basis that the plaintiff had lacked readiness and ability to perform. There seems to me to be no room in these circumstances to allege that by reason of the earlier common intention of the parties that the property should be transferred to the plaintiff and its making at that time of the payments alleged, that a constructive trust should be held to arise. The plaintiff got what it bargained for in entering into the contractual arrangement for the option, but lost its right to specific performance of the contract arising from exercise of the option because it was unable to establish its readiness, willingness and ability to perform. The same difficulty arises in relation to the submission that the payments made in the negotiations, and for the purpose of procuring the option, or in pursuit of the contractual arrangements between the parties, ought be regarded as creating a charge over the property in favour of the plaintiff. So far as the rent is concerned, the non-payment, payment or over-payment of those moneys are matters regulated and to be adjudicated on by reference to the terms of the contract embodied in the lease between the parties. If moneys have through mistake been overpaid, that fact may give rise to a right to recover them in an action for restitution, but cannot by reason of the mistake created a proprietary right in the plaintiff in the circumstances revealed in this case" 21 The barrister appeared for Pinebelt in those proceedings. No appeal was entered in respect of this decision, although the barrister advised in respect of such an appeal and prepared draft documents for the prosecution of such an appeal. We have in evidence before us a draft, but incomplete, Summons for Leave for Appeal against the decision of Hamilton J on 14 May 1998. (Annexure D to the Affidavit of the Barrister of 4.2.2002). 22 The draft Summons is incomplete in that it refers to, but does not satisfy the requirement of, Part 51 Rule 3(7) SCR, however it seems that the barrister did complete the missing material and dispatched it under cover of a letter from him to Mr Fallins on 26th May 1998. In that letter, the barrister acknowledges the possibility that another firm of solicitors might be taking over conduct of the matter and, in that event, he requested Mr Fallins forward the draft documents to those solicitors. 23 Following the decision of Hamilton J of 14 May 1998, the barrister received a lengthy letter from Mr Fallins, in which his instructing solicitor reviewed the position in the litigation and relevantly: o Enclosed signed Notices of Intention to Cease Acting as Solicitor dated 19.5.98 and fixing the time after which a notice of ceasing to act for Pinebelt as "seven days from 20 May 1998". o Raised matters for consideration at a hearing before Hamilton J which was due to occur on Friday 22 May 1998. o Pointed out that he (Mr Fallins) had told the client that he was relying upon the barrister's advice as to what "further steps if any can or should be taken on or before Friday". o Recorded that, inter alia, there were on going practical problems with respect to the occupation of the land by Pinebelt seemingly because of failure to pay rental or rates as and when they fell due. o Made it crystal clear that there was a chronic problem in that not only was Pinebelt not paying rent etc, it was not paying the fees of either Mr Fallins or the barrister. (Indeed, it appears obvious that the chronic problem was the principal reason for the Notice of Intention to Cease to Act being served upon Pinebelt.) o Recorded that Pinebelt might wish to appeal against the decision of Hamilton J of 14.5.98 (refusing the application by Pinebelt to amend its Points of Claim, so as to add the allegation that the circumstances gave rise to a trust in favour of Pinebelt) although the client had given instructions not to appeal against the earlier decision of Hamilton J dismissing Pinebelt's application for specific performance. o Recorded that, apart from the earlier mentioned problem with Pinebelt not paying rent and legal fees, there was probably a real question as to its solvency and a liability for Group Tax. The solicitor recorded that he had earlier advised that a conference with the client be convened to sort out the company's affairs. o Recorded that: "I believe you have my files containing all pleadings and affidavits in the matters. I will assume you will consider which application/motions, if any, are still 'alive' and will need to be progressed or disposed of on Friday". (emphasis added). o Pointed out that Pinebelt had instructed that Mr Peter Rukavina was to be authorised to instruct on behalf of Pinebelt however so far as Mr Fallins was concerned he would not be satisfied unless directors of Pinebelt gave such instructions. (Seemingly, Mr Peter Rukavina was not such a director). o Sought an appointment to discuss what assistance could be given to Pinebelt up till and including Friday 22.5.98. o Recorded his extreme reluctance to undertake any further work for the client in light of broken promises and undertaking to pay fees – including the considerable fees outstanding to the barrister. 24 On the morning of 22 May 1998, Mr Ivan Rukavina, a director of Pinebelt, sent a lengthy fax to the barrister (although we have seen in evidence only its title page and one other page) from which it is clear that an unsuccessful attempt had been made to communicate with the solicitor and, so, "everything" was being sent to the barrister. On the one substantive page we have in evidence, it is clear that the Rukavinas took serious issue with the claim being made by Bagley for rental, and they purported to provide instructions – presumably for the upcoming hearing before Hamilton J on 22.5.98. 25 At the hearing before Hamilton J on 22.5.98, the barrister appeared. He was instructed by Mr Fallins. We pause to note our emphasis in the 4th last subparagraph of paragraph 23 above. Quite why the barrister was possessed of the solicitor's files, seemingly to the point of denuding the solicitor of copies of the pleading and affidavits, was not explored before us. The clearest account of what happened on 22.5.98 is contained in a letter from Mr Fallins to his client of that day: see Annexure 9 to Ex "G". It is not necessary to do other than highlight the following matters set out in that letter: (i) Pinebelt was ordered to withdraw the existing caveat on the title to the land by Friday 29 May 1998; (ii) directions were given for the preparation for hearing of the claims and counter claims about outstanding rental. (iii) Hamilton J was informed: