Law Society of New South Wales -v- Krikunov [2002] NSWADT 39

CITATION: Law Society of New South Wales -v- Krikunov [2002] NSWADT 39 DIVISION: Legal Services Division APPLICANT PARTIES: Council of the Law Society of New South Wales RESPONDENT Victor Krikunov FILE NUMBER: 002025 HEARING DATES: 06/08/2001 SUBMISSIONS CLOSED: 08/06/2001 DATE OF DECISION: 03/28/2002

BEFORE: Officer D QC - Judicial Member; Fox R - Judicial Member; Mara A - Member APPLICATION: Professional Misconduct - act contrary to conditions of Practicising Certificate - Professional Misconduct - act contrary to instructions - Professional Misconduct - fail to account - Professional Misconduct - misappropriate trust moneys/moneys - Professional Misconduct - practice as a Solicitor/Barrister without a practising certificate MATTER FOR DECISION: Principal matter LEGISLATION CITED : Legal Profession Act 1987 CASES CITED: APPLICANT REPRESENTATION: D Barton, solicitor RESPONDENT No appearance ORDERS: 1. The name of the Practitioner be struck from the Roll of Legal Practitioners; 2. The Application by Marresso be adjourned, to be re-listed by the Registrar when there is evidence to establish the actual value of the work done by the Practitioner; 3. The papers in relation to Aranagio, Bissett, Wise, West, Humphreys, McCormick, Rosevear & Golabian be referred to the Attorney General.; 4. The Practitioner pay the costs of the Law Society – if not agreed then as assessed pursuant to the Legal Profession Act.

1 The Law Society on Information dated 20 December 2000, raised 12 matters against the Legal Practitioner. Some of the issues were of some age, arising out of events which took place, and came under notice, as long ago as 1992. Indeed, two of the complaints, (Stoyenko and Ivanof) could only proceed because the Legal Services Commissioner accepted them pursuant to section 138(2) of the Legal Profession Act , 1987 ("LPA"). 2 There were subsequent amendments to the Information and the Particulars; the full text of the amended Information and Particulars are annexed hereto. 3 Mr Barton, solicitor appeared for the Society, but the Practitioner did not appear. 4 The matters may be summarised as follows:-- (i) Stoyenko : Failure to account (ii) Kartavenko : Act contrary to Conditions of Practising Certificate, Withdraw funds contrary to instructions (iii) Ivanoff : Misrepresent Effect of Loan Agreement and Act without or contrary to Conditions of Practising Certificate (iv) Arangiego, Bissett, Wise, West, Humphreys, McCormick, Rosevear and Golabian : Act without Practising Certificate in relation to Mortgage Certification (v) Maresso : Act without or contrary to Conditions of Practising Certificate, Overcharging, Failure to account, and misappropriation 5 We were, of course not assisted by the Practitioner's absence from the hearing, and were by that absence prevented from exploring, possibly to the Practitioner's benefit, some of the matters which he sought to raise in his defence, either in the pleadings, or in correspondence with the Law Society which was in evidence before us. 6 We observe that the matter proven in relation to the funds paid to the Practitioner by the Maressos, and admitted by the Practitioner in correspondence, satisfies us to the appropriate level of satisfaction, that he appropriated them to his own use, and that, had he held any Practising Certificate at the time, he would have been in breach of section 61 of the LPA. 7 It is clear in our view that the matters alleged in Araniego and the seven other instances of execution of Solicitor's certificates and other documents in support of such Mortgages, all of which are proven, and all of which were done at a time when the Practitioner held no Practising Certificate at all, are so serious that they alone justify the Society's application for a striking off. 8 More difficult is the application made on behalf of the Maressos for Orders of, in effect, compensation pursuant to section 171D. It is alleged, and it is clearly so, that the Practitioner, either at a time when he held a restricted Practising Certificate, or when he held no Certificate at all, acted for these people in their attempt at re-financing the debt secured over their two adjacent residential properties in Campsie, and when that failed, the two residential real estate sale matters forced by the Mortgagee of the properties, (involving the discharge of mortgages apparently for debts greater than the eventual proceeds of sale), as well as a subsequent endeavour by them to purchase a residence in the Woy Woy area, which ultimately failed because finance could not be obtained. The Practitioner claimed, and apparently was paid, professional costs of $10,500.00 for this work. 9 Mr Hicks, Solicitor of Clayton Utz who act pro bono for the Maressos in these proceedings, seeks an order for the repayment by the Practitioner of the sum of $9,000.00, averring that the work done by the Practitioner had a value of no more than $1,500.00. Regrettably, we cannot agree, simply because we have before us insufficient evidence of the value of the Practitioner's work, and are in no position to make the assessment which is sought. It is fortunate that this Tribunal has wide powers of enquiry and direction of the evidence which it requires. We adjourn the application by the Maressos, and direct them to place before us evidence by a suitably qualified Solicitor, or other costing expert, of the actual value of the work done by the Practitioner as disclosed in Mrs Maresso's statement filed in these proceedings and the four Memoranda rendered by the Practitioner and also filed herein, in respect of the two sales, the aborted purchase and finance application for that, as well as the initial attempt at re-financing, all having regard to the status of the Practitioner's right to practise at the relevant times. Turning to the individual matters, and adopting the same order as the amended Information and Particulars: - Kartavenko: 10 The Practitioner had initially, properly practising as a sole Practitioner, taken instructions from Mr Kartavenko in a matrimonial matter. The Practitioner then in February 1994 commenced employment with Carroll & Knudsen, but for almost a year and half continued to act for Mr Kartavenko as a sole Practitioner. When, in mid 1995, the Practitioner ceased employment with Carroll & Knudsen, he continued to act for Mr Kartavenko, and holding only his previous restricted Certificate, received funds for Mr Kartavenko. At much the same time in 1995, Mr Kartavenko had instructed another Solicitor, and had given that Solicitor a power of attorney, pursuant to which the Practitioner was directed not to disburse the funds. Despite this the Practitioner paid Counsel $8,540.00 and appears to have paid himself approximately $4,500.00 towards his costs and disbursements. The Law Society seems to concede that the Practitioner was owed these amounts in costs and disbursements, and there may have been some explanation for what was done, but the Practitioner chose not to take the opportunity to appear before this Tribunal. These are both (the failure to follow instructions and not comply with Practising Certificate restrictions) very serious matters. Stoyenko: 11 This matter involved a dispute between the Practitioner and Mr Stoyenko about the Practitioner's fees whilst he was an employee of Aubrey Brown Partners. The matter was resolved in the Consumer Claims Tribunal (by terms of settlement) on a basis which obliged Mr Stoyenko to make payments to the Practitioner, which the Practitioner was then to on-forward to the firm. The first payment was forwarded, but the second, made by Mr Stoyenko late in July of 1992, was held by the Practitioner and the payment to Aubrey Brown Partners was not made until 10 December 1993. The material before us certainly raises the prospect that the Practitioner may have had some proper reason for part, if not all of, the delay, but without his sworn evidence, we have no alternative but to note this allegation as proven, and because of the length of time the Practitioner held the funds, note it to be serious Ivanoff: 12 The Practitioner's conduct in relation to the documentation for a borrowing by the Practitioner from a person for whom he was acting leaves much to be desired, but we are not satisfied that the Society has proven the failure set forth in the particulars. 13 In relation to the use of a letterhead, it is clear that the Practitioner was in breach of section 48C (2) in 1997 when he wrote to a medical practitioner using the words "I act for the abovenamed" using a letterhead "J Krikunov Solicitor " followed by his residential address. The Practitioner held no Practising Certificate at the time, and although in purported defence he wrote to the Society to suggest that he was merely helping a long time acquaintance, and although there is no evidence of any fee claimed by the Practitioner in relation to that matter, and so may not have been in breach of section 48 E, the fact of the matter remains that the Act very clearly proscribes any conduct by a person who does not hold a current Practising Certificate which in any way implies that such person is qualified to act as a barrister or solicitor. If the Practitioner wished to publish his professional status ("Legal Practitioner"), as he was clearly entitled to, then to stay within the law, it was necessary that he use words like " Although I do not act for him in any legal capacity, I am assisting Mr Ivanov in making a claim". 14 It is pertinent to observe that the modern legislation requires that the profession description of "solicitor" or "barrister" only be used by the holder of a current Practising Certificate. Even those who have honourably and diligently served the profession for the whole of their lives, and in their retirement are still an ornament to the Roll of Legal Practitioners, but choose not to hold a Certificate, may not describe themselves as "solicitor" or "barrister" without calling in aid (we suppose) the armed service device: -"(Ret)". 15 We note that old habits die hard, even the Society in its particulars describes Mr Krikunov as "solicitor" when from July of 1996 onward that epithet is, by statute, made inappropriate. The Practitioner, as a person who did not hold a practising certificate, clearly was not (and is not) "a solicitor" in the terms of the LPA. 16 A handwritten document prepared by the Practitioner in November 1994, on the same letterhead, and addressed to Mr Ivanov, headed " Memorandum of Costs and Disbursements re: you and Benthe" admits of no interpretation other than that the Practitioner was in breach of the restricted Practising Certificate which he held at that time. 17 Whilst a comparison of sections 48B, C & E (2) each of which impose a criminal sanction, and section 32 (5) which is a prohibition without penalty, might give credence to the suggestion that to act in breach of a restriction may not be all that serious, the fact remains that in the present instance such work would not have been covered by any professional indemnity insurance, and as such is a very serious breach indeed. 18 We are also satisfied that the letter to the medical practitioner establishes item (iv) of this particular part of the Amended Information. Aranagio, Bissett, Wise, West, Humphreys, McCormick, Rosevear and Golabian: 19 In each of these matters the Practitioner very clearly held himself out as entitled to practice by certifying "I Victor Krikunov of …….Solicitor acting for the borrower in relation to the above matter". The certifications date from 10 November 1998 to 1 December 1998. It is difficult to conceive of any basis upon which it could be denied that the Practitioner was "practising", and consequently was clearly in breach of section 25 (1) and the breach of sub-section 3 is just as obvious. The Practitioner had not held any Practising Certificate for some years. 20 We also note that the Practitioner (apparently quite improperly) purported to effect Statutory Declarations in each of these matters, and so we direct that the papers be referred to the Attorney General for such action as may be appropriate. 21 We observe that, apart from failure to account for funds entrusted to a Solicitor, we cannot conceive of a more serious affront to the very fabric of our legal profession, and the trust that the public is entitled to place in that profession, than engaging in legal work without a Practising Certificate. In this matter, we say that eight separate incidents cannot speak of anything other than a concerted course of action, and we are satisfied that these eight matters fully establish the Practitioner's unfitness to be on the Roll. Marresso: 22 As we have already indicated in these reasons, the Practitioner's conduct in acting for these people covers the whole range of contraventions of the Act of which he stands accused, and adds misappropriation to the list. Whilst it seems to us that it is not proven that the Practitioner was in breach of section 61 at the particular time of the acceptance of the Woy Woy deposit, because he did not hold a Certificate, and so was not at the critical time "a Solicitor", it is clear that the funds were entrusted to him, and he has not yet returned them. Again, because at the critical time he was not "a Solicitor", we think it is inappropriate to find particular (vii) proven. Be that as it may, the Practitioner's actions in relation to the funds, and the failure to this day to return them, do establish, beyond any doubt, that he is not a fit and proper person. Our orders are that: 1. The name of the Practitioner be struck from the Roll of Legal Practitioners. 2. The Application by Marresso be adjourned, to be re-listed by the Registrar when there is evidence to establish the actual value of the work done by the Practitioner. 3. The papers in relation to Aranagio, Bissett, Wise, West, Humphreys, McCormick, Rosevear & Golabian be referred to the Attorney General. 4. The Practitioner pay the costs of the Law Society - if not agreed then as assessed pursuant to the Legal Profession Act.