CITATION: The Council of the Law Society of New South Wales v Muir [2008] NSWADT 286 DIVISION: Legal Services Division APPLICANT The Council of the Law Society of New South Wales PARTIES: RESPONDENT Brian Thomas Muir FILE NUMBER: 082008 HEARING DATES: 7 October 2008 SUBMISSIONS CLOSED: 7 October 2008 DATE OF DECISION: 22 October 2008 BEFORE: Haylen W - J (Deputy President); Riordan M - Judicial Member; Fitzgerald R - Non-Judicial Member CATCHWORDS: Professional misconduct - misappropriation - breach sections 61 and 62 Legal Profession Act 1987 - breach section 117 Legal Profession Act 1987 - breach clauses 88-91 Legal Profession Regulation 2002 - breach sections 255, 256, 259 Legal Profession Act 2004 - removal from Roll - costs MATTER FOR DECISION: Original decision Legal Profession Act 1987 LEGISLATION CITED : Legal Profession Act 2004 Legal Profession Regulation 2002 Briginshaw v Briginshaw (1938) 60 CLR 336 at 361-362 Incorporated Law Institute of New South Wales v Meagher (1909) 9 CLR 655 at 681 CASES CITED: The Council of the Law Society of New South Wales v Brian Thomas Muir [2008] NSWADT 237 Law Society of New South Wales v Bannister (1993) 4 LPDR 24 at 28 Law Society of New South Wales v Foreman (1994) 34 NSWLR 408 The Law Society of New South Wales v Jones (unreported, 27 July 1978, CA NSW) APPLICANT P Boyd, solicitor REPRESENTATION: RESPONDENT No appearance ORDERS: 1. That the name of the respondent practitioner, Brian Thomas Muir, be removed from the Roll of Local Lawyers 2. That the respondent practitioner, Brian Thomas Muir, pay the costs of the Council of the Law Society in a sum as agreed or, in the absence of agreement, as assessed. REASONS FOR DECISION 1 By decision dated 25 August 2008, the Tribunal found Brian Thomas Muir guilty of professional misconduct (The Council of the Law Society of New South Wales v Brian Thomas Muir [2008] NSWADT 237). In April 2008, the Council of the Law Society filed an application for Original Decision in the Tribunal setting out 14 allegations of professional misconduct. In that application, the Council sought orders that the name of the respondent practitioner be removed from the Roll of Local Lawyers and that the respondent practitioner pay the applicant's costs of the proceedings. 2 The grounds for the application initially pressed before the Tribunal were as follows: Brian Thomas Muir, while practising as a Solicitor, was guilty of professional misconduct as set out in the following allegation: Professional Misconduct (1) The solicitor breached section 61 of the Legal Profession Act 1987 (2) The solicitor breached section 62 of the Legal Profession Act 1987 (3) The solicitor breached section 117 of the Legal Profession Act 1994 in that he negotiated a mortgage advance to Mxchange Pty Ltd. (4) The solicitor breached clauses 88-91 of the Legal Profession Regulation, 2002 dealing with controlled money. (5) The solicitor failed to properly secure his client's trust funds. (6) The solicitor misappropriated trust funds. (7) The solicitor failed to respond to correspondence. (8) The solicitor delayed in the administration of the Estate of the late Harold Gee. (9) The solicitor breached section 255 of the Legal Profession Act 2004. (10) The solicitor breached section 256 of the Legal Profession Act 2004. (11) The solicitor breached section 259 of the Legal Profession Act 2004. (12) The solicitor breached section 264 of the Legal Profession Act 2004. (13) The solicitor failed to account. (14) The solicitor failed to pay Counsel's fees. 3 As will be seen from the detail contained in the August decision of the Tribunal, these particulars related to the following matters: (a) in relation to Radcape Pty Ltd, breaches of section 61 and section 62 of the Legal Profession Act 1987, breach of section 117 of the Legal Profession Act 1897 and breaches of clauses 88-91 (incl) of the Legal Profession Regulation 2002 dealing with controlled money; (b) in relation to the Estate of the Late Harold Joseph Gee and the Estate of the Late Alfred Thomas Gee and Marie Gee the allegations were that the respondent solicitor misappropriated trust funds, breached section 256 and section 259 of the Legal Profession Act 2004 and breached clauses 88-91 (incl) of the Legal Profession Regulation 2002 dealing with controlled money; (c) in relation to Eureka Opals Pty Ltd and Mrs L Loizoiu the allegations were that the respondent solicitor failed to pay Counsel's fees, failed to account, misappropriated the sum of $7,524.00, breached section 255 of the Legal Profession Act 2004 and delayed in progressing the matter; (d) in relation to Justin Leef the respondent solicitor failed to account, misappropriated the sum of $933.25 and breached section 255 of the Legal Profession Act 2004. Allegations concerning John and Mary Bays were withdrawn at the hearing. 4 The respondent practitioner did not appear at the August hearing and had not filed a Reply as required by section 167 of the Legal Profession Act 1987 and Rule 27 of the Administrative Decisions Tribunal Rules. All of the allegations as pressed were found to have been established against the respondent practitioner and it was found in relation to the Gee Estate matters that the respondent practitioner had misappropriated in excess of $196,000, while in the Redcape Pty Ltd matter had misappropriated $51,000. As already indicated, the matter of Eureka Opals and Justin Leef involved misappropriation of smaller sums. In relation to all of the matters pressed at hearing by the Council of the Law Society, the Tribunal made the following finding: [28] The particulars relating to each matter have been established. The breaches of section 61 and 62 of the Legal Profession Act 1987 being wilful, dictate a finding of professional misconduct. The remaining matters involving misappropriation also establish professional misconduct. The remaining statutory breaches establish professional misconduct as does the overall conduct of the respondent practitioner as demonstrated by the evidence before the Tribunal. 5 In the August proceedings, there was evidence before the Tribunal that the respondent practitioner had his practising certificate suspended on 18 January 2007 by the Council of the Law Society. That remained the position at the time of hearing submissions on penalty. It is also to be noted that in the August hearing, the Tribunal had affidavit evidence and two reports prepared by Ms Sayer who had been appointed as receiver for the law practice conducted by the respondent practitioner. 6 As earlier noted, the respondent practitioner did not appear on the hearing listed to deal with any evidence and submissions on penalty. Following the August decision by the Tribunal, the respondent practitioner had been informed that a Directions hearing in the matter would be held in September and in accordance with the terms of the August decision, a time would be set for the hearing of any evidence and submissions in relation to penalty. The Registry of the Tribunal and the Council of the Law Society both advised the respondent practitioner of the September Directions hearing and of the October substantive hearing. The Council of the Law Society, in addition, served on the respondent practitioner a copy of its written submissions on penalty and confirmed that it continued to seek an order that his name be removed from the Roll of Local Lawyers. None of those notifications were returned to the sender. In the August hearing, the Tribunal was faced with a similar situation: in paragraphs [7] to [9] the Tribunal dealt with notifications given to the respondent practitioner and together with the terms of an affidavit of service, was satisfied that he had been appropriately notified of the nature of the hearing as well as the time and place of the hearing. The Tribunal has been similarly satisfied in relation to the present proceedings dealing with the issue of penalty. 7 The Tribunal is satisfied that, pursuant to the provisions of section 138(1)(a) of the Administrative Decisions Tribunal Act, notice of this hearing and its purpose has been given to the respondent practitioner by sending to him such notice by pre-paid post to his last know address. Accordingly, and pursuant to Rule 29(d) of the Administrative Decisions Tribunal Rules, the Tribunal was able to list this matter for hearing and conduct the hearing regarding penalty despite the respondent practitioner's failure to appear. 8 While the Council for the Law Society relied on all the findings made by the Tribunal in its August decision, it particularly focused upon the significant amounts of money found to be misappropriated being in excess of $196,000 in relation to the Gee Estate matters and $51,000 in relation to Radcape Pty Ltd. It was noted that there were two other findings of misappropriation of smaller amounts. Having regard to what the Council of the Law Society submitted to be "very large sums misappropriated" by the respondent practitioner, it was further submitted that "nothing short of removal from the Roll is warranted". 9 In its submissions, the Law Society drew attention to a number of authorities indicating the serious view taken over the years by the Tribunal and the Court of Appeal where findings of professional misconduct have been made in circumstances where there has been a misappropriation of clients' funds. The Tribunal accepts the thrust of those authorities and the fact that the issue is to be determined on the present fitness of the respondent practitioner to practice rather than his fitness at the time of the misconduct. Particular reference was made to the judgment of Shellar JA in Law Society of New South Wales v Bannister (1993) 4 LPDR 24 at 28: When the jurisdiction of the Tribunal is invoked under Part 10 ... of the Act [referring to the Legal Profession Act 1987] to conduct a hearing into a complaint of professional misconduct by a legal practitioner, the primary consideration 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. The Tribunal must also act so as to deter the offender in the future and any other practitioner minded to behave in a like manner. In the case of a solicitor these elements together or separately may call for the removal of the solicitor's name from the Roll or the imposition of a substantial fine. Further attention was drawn to the statement of Street CJ (at page 10) in The Law Society of New South Wales v Jones (unreported, 27 July 1978, CA NSW), namely: Reliability and integrity in the handling of trust funds are fundamental pre-requisites in determining whether an individual is a fit and proper person to be entrusted with the responsibilities belonging to a solicitor. 10 The Tribunal accepts that its role in dealing with a finding of professional misconduct is essentially protective rather than punitive and that the role is also educative and must have regard to the issue of deterrence. In handling clients' money, solicitors are in a fiduciary relationship: in addressing an appropriate penalty the Tribunal should have regard to not only the protection of the public against similar conduct, but also to the standard of behaviour required of solicitors. In the Law Society of New South Wales v Foreman (1994) 34 NSWLR 408, Kirby P, after referring to the powerful passage from the judgment of Isaacs J in Incorporated Law Institute of New South Wales v Meagher (1909) 9 CLR 655 at 681, stated (at 142): It is still true today, as it was in 1909, that high standards are expected of legal practitioners, particularly in their dealings with clients and the courts. This is so that members of the public, litigants, other practitioners and the courts themselves can have confidence in the integrity of those who enjoy special privileges as legal practitioners. 11 Having regard to these well known principles and accepting that the onus to be satisfied is that laid down by Dixon J in Briginshaw v Briginshaw (1938) 60 CLR 336 at 361-362, the Tribunal has been able to come to the conclusion that the conduct of the respondent practitioner is so serious that he is a person who cannot be regarded as a fit and proper person to remain a solicitor. It may be readily accepted that removal from the Roll of Local Lawyers is a most serious step and one likely to have profound implications for a solicitor's professional life and beyond. It is a step that is not lightly taken but the evidence before the Tribunal compels a finding that the conduct of the respondent solicitor warrants the serious step of removal from the Roll of Local Lawyers. He has been found guilty of misappropriation of very significant amounts of his clients' funds in at least two cases (and smaller amounts from other clients) and that dealing appears to have arisen out of a deliberate course of conduct adopted by the respondent practitioner. There are ample grounds and reasons, therefore, for granting the orders sought by the Council of the Law Society. With a slight adjustment, the Tribunal proposes to make those orders. ORDERS 12 Having regard to the above matters, the Tribunal makes the following orders: 1. That the name of the respondent practitioner, Brian Thomas Muir, be removed from the Roll of Local Lawyers. 2. That the respondent practitioner, Brian Thomas Muir, pay the costs of the Council of the Law Society in a sum as agreed or, in the absence of agreement, as assessed. 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.