The Legal Services Tribunal of New South Wales CITATION : Graeme Alan Smith and William Bruce Andrew Munro [1993] NSWLST 13 PARTIES : Graeme Alan Smith and William Bruce Andrew Munro FILE NUMBER(S) : of CORAM: Mr D E Hunt (Presiding Member) - Mr F Herron - Rear Admiral G. Griffiths CATCHWORDS: Professional Misconduct - mislead client - Professional Misconduct - gross negligence and delay/gross delay/delay - Professional Misconduct - breach of s. 61 of the Legal Profession Act - Professional Misconduct - fail to keep accounts - Professional Misconduct - misappropriate trust moneys/moneys - Professional Misconduct - prefer own interests to those of others :- Legal Profession Act 1987 Workers Compensation Act 1987 LEGISLATION CITED: Legal Practitioners' Act 1898 Bankruptcy Act 1966 Crimes Act 1914 CASES CITED: Fraser v The Law Society (1992) 5LPDR 12 DATES OF HEARING: 26/11/92 - 01/04/93 DATE OF JUDGMENT: 04/01/1993 Mr D. Robinson LEGAL REPRESENTATIVES: Mr F. Smith Mr C. Walker, instructed by Mr T. Glynn, appeared for Graeme Alan Smith. Mr J.A. Griffin, instructed by Mr T. Glynn, appeared for William Bruce Andrew Munro JUDGMENT: Legal Profession Disciplinary Tribunal In the matter of Graeme Alan Smith and William Bruce Andrew Munro Determination and Orders Before: Mr D. Hunt (Presiding Member), Mr F. Herron and Rear Admiral G. Griffiths. W.B.A Munro Legal Profession Act, 1987 - Section 61 - Wilful contravention - Legal Profession (Trust Accounts and Controlled Money) Regulation 1988 - paragraphs 7, 8, 13 and 14 - Wilful contravention - profession should ensure meticulous compliance with Act and Regulation - solicitor reckless and careless in following practices prohibited after 1 April, 1988 - solicitor fit to continue in practice - fined $4,000. G.A. Smith Legal Profession Act, 1987 - Section 61 - Wilful contravention - Legal Profession (Trust Accounts and Controlled Money) Regulation 1988 - paragraphs 7, 8, 13 and 14 - Wilful contravention - failure to account to client - Legal Practitioners Act, 1898 - Section 41 (1) wilful breach - gross negligence - preference for interests of one client over those of another - Bankruptcy Act, 1966 (Commonwealth) and Crimes Act, 1914 (Commonwealth) breach - documents altered with intent to defraud stamp duties office - letter written with intent to mislead stamp duties office - acting in conflict of interest - pattern of deception and dishonesty - strong message to profession that an abandonment of proper standards will not be tolerated - solicitor' s name to be removed from roll upon lapse of 28 days. Appearances: Mr D. Robinson, instructed by Mr F. Smith, appeared for the Law Society of New South Wales. Mr C. Walker, instructed by Mr T. Glynn, appeared for Graeme Alan Smith. Mr J.A. Griffin, instructed by Mr T. Glynn, appeared for William Bruce Andrew Munro. In this matter the Council of the Law Society of New South Wales (the Complainant) complained to the Legal Profession Disciplinary Tribunal (the Tribunal) against Graeme Alan Smith (Smith) and William Bruce Andrew Munro (Munro) under Section 135 of the Legal Profession Act 1987 (the Act). The complaint was dated 16 March 1992, and the particulars of the complaint were: "In relation to William Bruce Andrew Munro and Graeme Alan Smith: 1. The solicitors wilfully contravened Section 61 of the Legal Profession Act 1987. 2. The solicitors wilfully contravened Clause 7 of the Legal Profession (Trust Accounts and Controlled Money) Regulation 1988. 3. The solicitors wilfully contravened Clause 8 of the Legal Profession (Trust Accounts and Controlled Money) Regulation 1988. 4. The solicitors wilfully contravened Clause 13 of the Legal Profession (Trust Accounts and Controlled Money) Regulation 1988. 5. The solicitors wilfully contravened Clause 14 of the Legal Profession (Trust Account and Controlled Money) Regulation 1988. 6. The solicitors acted in contravention of section 122 of the Workers Compensation Act 1987. In relation to Graeme Alan Smith: 7. The solicitor failed to account to his clients. 8. The solicitor committed wilful breaches of Section 41(1) of the Legal Practitioners Act 1898 (the old Act). 9. The solicitor was guilty of gross negligence. 10. The solicitor misled his clients. 11. The solicitor preferred the interests of one client over the interests of other clients. 12. The solicitor acted for a client when he was aware, or ought to have been aware, that in so acting he was personally in breach of the Bankruptcy Act 1966 (Cth) and the Crimes Act 1914 (Cth)." Those particulars were expanded under the heading "FURTHER PARTICULARS" in the complaint. The Complainant sought the following orders against both solicitors: "1. Such orders as the Tribunal deems fit. 2. That Graeme Alan Smith and William Bruce Andrew Munro pay the costs of the complainant of these proceedings on a solicitor/client basis." David Charles Cuthbert and Robyn Ann Cuthbert sought the following order against Smith: "That the solicitor pay them compensation of $2,956.00." The Tribunal heard the matter on 26 November 1992, 11 December 1992, and 11 February 1993 and reserved its decision. The Complainant's case consisted of: 1. Report of Geoffrey Selwyn Lewis dated 18 December 1990, being annexure "A" to the declaration of Angela Wawn dated 22 May 1992 and being entitled "The Law Society of New South Wales - William Bruce Andrew Munro and Graeme Alan Smith (exhibit "A"). 2. Second report of Geoffrey Selwyn Lewis dated 18 December 1990, being annexure "B" to the declaration of Angela Wawn dated 22 May 1992 and being entitled "The Law Society of New South Wales - Graeme Alan Smith (exhibit "B"). 3. Transfer from Mr and Mrs Ogilvie to Mr and Mrs Formella not containing initials (exhibit "C1"). 4. Transfer from Mr and Mrs Ogilvie to Mr and Mrs Formella containing additional initials (exhibit "C2"). 5. Copy of file of the solicitors relating to Matheson purchase from Ogilvie (exhibit "D"). 6. Copy of letter dated 19 December 1990 from Lewis to Smith serving copies of exhibits "A" and "B" (exhibit "E"). 7. Oral evidence of Geoffrey Selwyn Lewis, investigator. 8. Oral evidence of Phyllis Bride Ogilvie, retired. Munro's case consisted of: 1. Statutory declaration of William Bruce Andrew Munro, Solicitor, dated 8 October 1992 (exhibit "M1"). 2. Copy of page 29 of the Law Society Journal of July 1991 (exhibit "M2"). 3. 12 statutory declarations as to Munro's fitness (exhibit "M3"). 4. Copies of two accounts on the letterhead of "Munro, Smith & Hon" dated 13 February 1991 and addressed to "Mr O.J. Rabjones" (exhibit "M4"). 5. Oral evidence of William Bruce Andrew Munro, Solicitor. Smith's case consisted of: 1. Statutory declaration of Graeme Alan Smith, Solicitor, dated 12 October 1992 (exhibit "S1"). 2. Copies of medical reports of Dr. Chris Danesi dated 10 December 1992 and 22 January 1993 (exhibit "S2"). 3. Copy of an undertaking by Smith to the Office of State Revenue dated 19 April 1985, and copy of a facsimile transmission dated 1 September 1992 from the Office of State Revenue relating to bans and delay in the stamping of documents (exhibit "S3"). 4. 10 statutory declarations as to Smith's fitness (exhibit "S4"). 5. Oral evidence of Graeme Alan Smith, Solicitor. The allegations against the Solicitors are set out in detail in the complaint under the heading "FURTHER PARTICULARS". The Tribunal does not consider it is necessary to repeat those detailed particulars here. However, for the purpose of clarification, that part of the complaint headed "FURTHER PARTICULARS" is annexed hereto and marked with the letter "A". The relevant matters referred to in those particulars will be dealt with in this determination. At the beginning of the hearing, Counsel for the Complainant sought leave to amend the complaint by adding two items of complaint in relation to Smith, those items to be numbered 13 and 14. Although at that point in the hearing leave to so amend was granted by consent, that was done on the basis that those two items had been considered by the Complainant and were to be added at the request of the Complainant. Later on the first day of the hearing it emerged that there was doubt as to whether or not the Complainant had in fact considered the two items or authorised the request. Consequently the question of whether or not the complaint should be so amended was reopened and deferred for further consideration until later in the hearing. At the continuation of the hearing on 11 February 1993, Counsel for the Complainant informed the Tribunal that he had been instructed to withdraw the application to so amend the complaint and to state that no particulars would be given in relation to the matters previously referred to. The application to withdraw the amendment was granted by consent. Counsel for the Complainant also stated that Smith had already paid compensation to David Charles Cuthbert and Robyn Ann Cuthbert, and that the order sought by them in the complaint was no longer sought. At the end of the first day of the hearing on 26 November 1992 the evidence relating to the complaint against Munro had been completed. On the application of Counsel for Munro, and by consent, it was then determined that Counsel for Munro should address on the evidence relating to his client, that Counsel for the Complainant should then have seven days to file written submissions on that evidence, and that Counsel for Munro should have a further seven days to file any written response deemed by him to be necessary. The hearing was then adjourned until 11 December 1992 for a continuation of the evidence in relation to the complaint against Smith. Munro and his legal representatives were excused from further attendance, with the right reserved to them to continue to attend if they so desired. The Tribunal noted that the same instructing Solicitor appeared for both Munro and Smith. Counsel for the Complainant subsequently filed written submissions relating to Munro. Counsel for Munro did not file any written response to those written submissions. When the hearing resumed on 11 December 1992, Smith's Solicitor informed the Tribunal that neither Smith nor his Counsel would be appearing, and that he had been instructed to apply for an adjournment on the ground that Smith was medically unfit to attend. In support of that application, Smith's Solicitor submitted a medical report by Dr Chris Danesi, Consultant Psychiatrist, dated 10 December 1992. That report later became part of exhibit "S 2" in Smith's case. Counsel for the Complainant consented to the submission of the report and informed the Tribunal that in the circumstances the Complainant did not oppose the application for adjournment. He also made an application that the costs of the day be reserved and be dealt with by the Tribunal at further hearing. The Tribunal noted that the application for adjournment had not been properly foreshadowed. However, on the basis of the stand taken by each party, the application for adjournment was granted, the question of the costs of the day was reserved until further hearing, and the hearing was adjourned until 11 February 1993. During the course of the resumed hearing on 11 February 1993, Counsel for the Complainant sought, and was granted leave by consent, to amend the complaint by adding two further particulars to those appearing on page 2 of the complaint under the heading "In relation to Graeme Alan Smith:". Those two further particulars were numbered 13 and 14 and were read into the record (T.119) by Counsel for the Complainant, as follows: "13.The solicitor altered documents, namely a contract for sale and a transfer document, in a material respect with intent to defraud the Queensland stamp duties office." "14.The solicitor wrote a letter, dated 31 May 1990, to his agents which was false in material respects with the intent of misleading the Queensland stamp duties office." To avoid any possible confusion with an earlier reference in this determination to an application (subsequently withdrawn) by Counsel for the Complainant to amend the complaint by adding two items to be numbered 13 and 14, the Tribunal notes that the earlier reference related to entirely difference subject matter and had no connection with the amendment ultimately made on 11 February 1993. Indeed, in seeking the amendment ultimately made, Counsel for the Complainant said: "...two further particulars which are, in fact, referred to under the heading of `Further particulars', should be added as main particulars and stand on their own. No new evidentiary material will be introduced and it is merely to give proper notice of the final submissions made by the Law Society...The purpose of that amendment is to reveal to Mr Smith, fully, the submissions to be made after the end of the evidence." At the end of the hearing, Counsel for the Complainant sought and was granted leave to file written submissions re Smith within 7 days. Counsel for Smith was granted leave to respond in writing within a further 7 days. Written submissions on the proceedings re Smith were subsequently filed on behalf of the Complainant and on behalf of Smith. Before dealing directly with the particulars of the complaint, it will be appropriate to provide a brief general background of the complaint and the Solicitors. The complaint against the Solicitors related to events which allegedly took place during the period from about March 1985 to about September 1990. The Solicitors practised in partnership from 2 February 1988 to 30 June 1992. The particulars of the complaint were set out in two sections. The first section contained Particulars 1 to 6 relating to allegations against both Munro and Smith. The second section contained Particulars 7 to 12 (later amended during the hearing by adding Particulars 13 and 14) relating to allegations against Smith only. Munro was born on 30 November 1949. He was admitted as a Solicitor of the Supreme Court of Queensland on 14 December 1978,and on 11 May 1979 he was admitted as a Solicitor of the Supreme Court of New South Wales. From 14 December 1978 to 30 June 1979 he practised as an employed Solicitor at Murwillumbah. From 1 July 1979 to 30 November 1983 he practised as a partner in a law firm at Murwillumbah with which Smith had no connection. From 1 December 1983 to 9 January 1988 he practised as a sole practitioner at Murwillumbah. From 2 February 1988 to 30 June 1992 he practised in partnership with Smith at Murwillumbah. Since 1 August 1992 he has practised as a partner in a law firm at Murwillumbah with which Smith has no connection. He is married and lives with his wife and one child at Murwillumbah. Smith was born on 21 September 1952. He was admitted as a Solicitor of the Supreme Court of New South Wales on 9 May 1980. From July 1980 to March 1981 he practised as an employed Solicitor at Murwillumbah. From April 1981 to December 1985 he practised as a sole practitioner at Mullumbimby. He left the profession from January 1986 to December 1987 to carry on business as a licensed hotel publican. From 2 February 1988 to 30 June 1992 he practised in partnership with Munro at Murwillumbah. Since September 1992 he has practised as a sole practitioner at Mullumbimby. He is married and lives with his wife and 4 children at Mullumbimby. The complaint against the Solicitors resulted from an investigation carried out by the witness Mr G.S. Lewis. That investigation commenced on 30 October 1990 and was carried out over a period of about one week. Because of the separation of the particulars of the complaint as between Munro and Smith, it is convenient to deal with each of the Solicitors separately. In doing so, the Tribunal will deal firstly with the particulars of the complaint relating to Munro. 1. The complaint against Munro The particulars of the complaint alleged against Munro were less complex than those alleged against Smith. It is also fair to say that all of the allegations against Munro involved breaches of the Act, and of the Legal Profession (Trust Account and Controlled Money) Regulation 1988 (the Regulation). Without in any way minimising the seriousness of those breaches, it can also be said that the evidence disclosed that they were breaches which by nature were technical and procedural. In dealing with each Particular of the complaint against Munro, the Tribunal will apply the same system of identification reference as appears in annexure "A" hereto. 1.1. Particular 1 re Munro It was alleged that Munro had wilfully contravened Section 61 of the Act. Section 61 deals with a solicitor's obligations in relation to money received by him on behalf of another. In particular, it prescribes the manner in which a solicitor should hold such money, and it stipulates procedures which he must follow in dispersing or transferring such money, or appropriating such money for the payment of costs or the reimbursement of disbursements. The section requires certain prescribed procedure to be followed, and in doing so it links up with the Regulation. Clause 8 of the Regulation is particularly appropriate to the allegations against Munro, dealing, as it does, with the receipt and withdrawal of money for costs and disbursements. Clause 8 requires a solicitor to deliver an `outline bill' to a client on receipt, or as soon as practicable after receipt of money from which the solicitor is authorised to receive costs or disbursements. The clause provides further that a solicitor shall not withdraw trust money in satisfaction of any costs or disbursements unless the person for whom the money is held has authorised the withdrawal and the solicitor has delivered to the person an outline bill. An outline bill is defined as a statement in writing sufficient to identify the general nature of the work and the amount and purpose of any disbursement. Munro was alleged to have contravened these provisions in transactions relating to clients named Rabjones, Scencabaugh, and Johnson, and also in relation to certain trust accounts of a solicitor named Hon. Munro and Smith, during the period when they were in partnership, had acquired the practice of Hon, and it was in the course of transferring nine then current trust accounts of Hon to their own trust account that Munro and Smith were alleged to have contravened the requirements of Section 61. With the exception of the trust accounts of the former practice of Hon, all the other allegations in Particular 1 related to the alleged withdrawal of costs and disbursements by way of transfer from trust account to office account, the dispersal of proceeds of sale, and the receipt of amounts on behalf of clients which were paid directly into office account, all done without delivery of an outline bill or a statement of account. In the matter of Hon's trust accounts, it was alleged that they were transferred to the trust account of Munro and Smith without the authority of the trust creditors. In his statutory declaration (exhibit "M 1"), and in evidence before this Tribunal, Munro readily admitted all the allegations. At the same time he put forward certain matters in mitigation. These will be dealt with later in the findings of the Tribunal re Munro. As to Particular 1, The Tribunal is satisfied that Munro contravened Section 61 and that the contravention was wilful. 1.2. Particular 2 re Munro It was alleged that Munro had wilfully contravened Clause 7 of the Regulation. Clause 7 applies to a solicitor who is required to maintain a trust ledger or a controlled money ledger. The Clause requires the solicitor to furnish to each person for whom, or on whose behalf, money is held or controlled, a separate statement of account in respect of each ledger account at prescribed intervals or on the happening of prescribed events. Munro was alleged to have contravened Clause 7 in relation to clients named Railton, Scencabaugh and Solca. Munro's response to these allegations was similar to his response to the allegations in Particular 1. As to Particular 2, The Tribunal is satisfied that Munro contravened Clause 7 and that the contravention was wilful. 1.3. Particular 3 re Munro It was alleged that Munro had wilfully contravened Clause 8 of the Regulation. The effect of Clause 8 has already been covered in the Tribunal's comments on Particular 1 above. Munro was alleged to have contravened Clause 8 in transactions relating to clients named Black, Fisher, Dehayr, Rabjones, Remington, Scencabaugh, Woods, Fischer, Boughey, and Walliker. The transactions involved transfers from trust account to office account, the receipt of payment for reimbursement of disbursements, and a transfer without authority. Munro's response to these allegations was similar to his response to the allegations in Particular 1. As to Particular 3, The Tribunal is satisfied that Munro contravened Clause 8 and that the contravention was wilful. 1.4.Particular 4 re Munro It was alleged that Munro had wilfully contravened Clause 13 of the Regulation. Clause 13 requires a solicitor to record in a journal all transfers between accounts in a ledger that are not effected by cheque. The clause sets out the details which must be so recorded. This allegation referred to the acquisition by Munro and Smith of the law practice conducted by the solicitor Hon which has already been covered in the Tribunal's comments on Particular 1 above. In the course of transferring the moneys of the nine trust creditors from the Hon trust account in one bank to the Munro and Smith trust account in another bank, Munro and Smith failed to record the transfer by appropriate journal entries in compliance with Clause 13. Munro's response to this allegation was similar to his response to the allegations in Particular 1. As to Particular 4, The Tribunal is satisfied that Munro contravened Clause 13 and that the contravention was wilful. 1.5.Particular 5 re Munro It was alleged that Munro had wilfully contravened Clause 14 of the Regulation. Clause 14 requires a solicitor to maintain a separate ledger account for each matter for each client in respect of trust money. The clause also stipulates the items of information which must be included in the ledger record. One of those items so required to be included is the date of the transaction. There were two matters involved in this allegation. The first related to a client named Green. Munro and Smith acted for that client on the sale by the client of certain property, and also on the purchase by the client of certain other property. Both transactions were recorded on one ledger sheet in contravention of Clause 14. The second matter related to the acquisition by Munro and Smith of the law practice of the solicitor Hon to which reference has already been made in some detail. When the trust moneys of the nine trust creditors were transferred into the records of Munro and Smith, the latter failed to record the date of each entry in the ledger sheet records. Munro's response to these allegations was similar to his response to the allegations in Particular 1. As to Particular 5, The Tribunal is satisfied that Munro contravened Clause 14 and that the contravention was wilful. 1.6.Particular 6 re Munro It was alleged that Munro had acted in contravention of Section 122 of the Workers Compensation Act 1987. This allegation relied upon an assumption by the investigator Lewis that in the course of Munro and Smith acting for the client Rabjones they had applied as costs certain workers compensation redemption moneys received by them on behalf of Rabjones. In fact the evidence disclosed that the assumption of the investigator had been incorrect due to an unfortunate misdescription of an item in a letter to Rabjones dated 20 August 1990, a copy of which appeared on the file. It was quite clear from the evidence that no claim for workers compensation was ever made on behalf of Rabjones, and that there had been no redemption of workers compensation entitlements. As to Particular 6, The Tribunal is satisfied that there was no contravention of Section 122 of the Workers Compensation Act 1987. 1.7. Particulars 1 to 6 - Findings re Munro It has already been indicated above that Munro readily admitted all the allegations made against him in respect of Particulars 1 to 5. As to the clients affected by the allegations in those Particulars, some were handled by Munro, some were handled by Smith, and some were handled by Smith after instructions were first given to Munro. As to the latter, it is noted that Munro was overseas on a family holiday from 31 August 1990 to 29 October 1990. Much of his attention was engaged by prior planning for the holiday, and his then current work was passed over to Smith for attention during Munro's absence. The day on which Munro returned to active duty in the office was the day on which the investigator Lewis commenced his investigation. Notwithstanding that he did not handle all of the matters personally from start to finish, Munro readily accepted his responsibility jointly with that of Smith in all matters. The matters involving the client Rabjones and the Solicitor Hon will be given separate treatment. The remaining matters can be conveniently grouped together and dealt with later. Munro acted for Rabjones in what might be described as a work related injury claim which ultimately resulted in a three day trial in the Supreme Court. A substantial verdict was given in favour of Rabjones, and it is noted that this was a case which was very complicated and which had been rejected as hopeless by other solicitors before Rabjones came to Munro for assistance. It was clear from the evidence that the work carried out by Munro for Rabjones was long and involved. The principal element of the allegation in this matter was that the sum of $60,000.00 was withdrawn from trust money for costs and disbursements without the rendering of an outline bill or a statement of account. Munro's explanation as to this transaction was similar to that which he gave in relation to the other matters to be dealt with later. However, in this particular matter the Complainant took the issue somewhat further. In the course of the cross examination of Munro, it was suggested that by transferring the sum of $60,000.00 to the office account Munro obtained a benefit because the office account was then in an overdraft state. Munro agreed with that proposition - indeed it was obvious. It was then suggested to Munro that in thereby obtaining a benefit, the action was dishonest. Munro also agreed with that proposition, but his demeanour in the witness box was such that the Tribunal was concerned that he had become confused and disoriented and that he had reached a point where he was prepared to agree with virtually any proposition put to him. Later in his evidence he was questioned by members of the Tribunal. That questioning elicited responses that he believed at the time that he was justly entitled to the amount as costs and disbursements, and that at the time he did not regard his action as dishonest. Having observed Munro's demeanour in giving his evidence, and having considered the whole of the evidence on this point, the Tribunal is satisfied that Munro did not act dishonestly in making the subject transfer. Of course that did not excuse the contravention of the provisions of Section 61 of the Act. Nevertheless the Tribunal considers that these comments are appropriate in order to clarify the circumstances surrounding this allegation. Hon was a sole practitioner practising in Murwillumbah. In about early 1989 he suffered two strokes in close succession. He was unable to attend to his practice and various solicitors in the area gave voluntary assistance to keep the practice running. These included Munro and Smith. In the course of these events, Smith was authorised by the Law Society to operate on Hon's trust account. When it became obvious that Hon would not be able to return to active practice, he proposed to Munro and Smith that they should purchase his practice. An agreement was reached and the practice was taken over by Munro and Smith. At that time, Hon's trust account was held in the National Bank at Murwillumbah and the Munro and Smith trust account was held in the Commonwealth Bank. Hon caused letters to be sent to all his clients informing them of the change in practice and assuring them of a continuation of service by Munro and Smith. On 4 April 1989 Hon wrote to the Law Society informing that body of the change. Meanwhile, Hon continued to receive statements of account from the National Bank as to his trust account. He was then under rehabilitation and the continuing contact with the affairs of his former practice was causing him anxiety. He requested Munro and Smith to transfer the trust moneys from the National Bank to their own bank. Munro telephoned the Law Society and informed the person to whom he spoke of the proposed transfer of trust moneys. According to Munro he was told that the proposal was in order. No evidence to the contrary was presented, and no issue was taken in evidence with Munro on this point, and the Tribunal accepts Munro's statement. The transfer of the funds of nine trust creditors was then carried out, although no specific authority was obtained from the clients. In dealing with the remaining matters involving Munro, the Tribunal will also cover general aspects of the two specific matters of Rabjones and Hon. It was clear from the evidence that in all the allegations relating to Particulars 1 to 5: [] There was no deficiency in trust funds. [] None of the clients suffered loss. [] The clients were aware of the actions being taken. [] The costs and disbursements and other dispersals were due and payable. [] The costs were justifiable and were not excessive. [] In all cases a statement of account was ultimately delivered to the client. [] None of the clients made a complaint against Munro. In particular, the client Rabjones provided a statutory declaration (part of exhibit "M 3") praising the service provided to him by Munro both generally and specifically as to the matter the subject of the allegation. Having made those points, the Tribunal has no doubt that Munro was guilty of many serious breaches of the obligations imposed upon solicitors by the Act and the Regulation in the keeping of trust account records and in the prescribed notifications to clients of the status and handling of their trust moneys. Earlier in this determination the Tribunal made reference to the fact that the breaches by Munro were technical and procedural by nature. Nevertheless it should not be overlooked that the technical and procedural requirements prescribed by the Act and the Regulation for the management and control of trust moneys were established for a specific purpose. They were the result of a response by the profession to the growing public concern over the occurrence of a number of serious cases of misappropriation of trust moneys held on behalf of clients. That the imposition of those requirements was fully justified is now a matter of record, but it is important that the profession should be constantly on the alert to ensure that the requirements are followed meticulously. A very disturbing feature of this case is that Munro was not consciously aware of the responsibilities imposed upon him by the Act and the Regulation. In committing the breaches which were the subject of the Complaint, he acted recklessly and carelessly in following old and out-dated practices which were clearly prohibited when the current Act and Regulation came into operation on 1 April 1988. An even more disturbing feature is that Munro was apparently not alone in the profession in his failure to comply with his obligations. This was emphasised by exhibit "M 2" which was a copy of an article which appeared in the Law Society Journal of July 1991. The heading of the article read: "Complaints to the Society indicate some practitioners continue to breach regulations which prohibit access to trust money or controlled money for payment of costs without the client's informed authority." That this state of affairs should continue to exist more than three years after the commencement of the new requirements says little for the effectiveness of legal education in this State. Having considered the whole of the evidence, including the admissions made by Munro, the Tribunal finds that Munro wilfully contravened those provisions of the Act and Regulation referred to in Particulars 1 to 5, inclusive, of the complaint, and that by reason of such conduct he is guilty of professional misconduct. 1.8. Orders re Munro In determining the orders to be made in the case of Munro, the Tribunal has taken into account the circumstances surrounding Munro's conduct, and the evidence before the Tribunal as to his fitness. Relevant factors relating to Munro's conduct in the matters the subject of the Complaint have already been covered in 1.7. above. As to Munro's fitness, there was no evidence placed before the Tribunal to suggest that he was not fit to continue in practice as a solicitor. The Tribunal has taken that factor into account, as well as the circumstances surrounding the matters the subject of the Complaint, and also the various statutory declarations as to Munro's fitness contained in exhibit "M 3". The Tribunal is satisfied that this is not a matter which calls for the removal of Munro's name from the roll of solicitors, and that the orders set out at the end of this Determination are appropriate in the case of Munro. 2. The complaint against Smith The Tribunal now moves to a consideration of the complaint against Smith. In dealing with each Particular of the complaint against Smith, the Tribunal will apply the same system of identification reference as appears in annexure "A" hereto. Particulars 1 to 6, set out in the first section of the complaint, related to allegations against both Smith and Munro. Those Particulars, so far as they relate to Munro, have already been dealt with in detail earlier in this determination under the heading "1. The complaint against Munro". The Tribunal has already noted that some of the matters giving rise to those Particulars were handled by Munro, some were handled by Smith, and some were handled by Smith after instructions were first given to Munro. Both Smith and Munro conceded in evidence that they had a joint responsibility with each other in respect of the matters raised in Particulars 1 to 6. Furthermore, in their statutory declarations and in evidence, they both readily admitted all the allegations in Particulars 1 to 5 (Particular 6 was a special case which has been dealt with separately). Because of the details already covered by the Tribunal in relation to Particulars 1 to 6 in dealing with Munro, the Tribunal finds it unnecessary to repeat those details in dealing with Smith as they apply similarly to him. Furthermore, in dealing with Smith, the Tribunal applies similarly to him those findings on Particulars 1 to 6 as the Tribunal has already applied to Munro under the heading "1.7. Particulars 1 to 6 - Findings re Munro". However, for the purpose of the record, the Tribunal will set out formal findings in Particulars 1 to 6 as they relate to Smith. 2.1. Particular 1 re Smith It was alleged that Smith had wilfully contravened Section 61 of the Act. The Tribunal is satisfied that Smith contravened Section 61 and that the contravention was wilful. 2.2. Particular 2 re Smith It was alleged that Smith had wilfully contravened Clause 7 of the Regulation. The Tribunal is satisfied that Smith contravened Clause 7 and that the contravention was wilful. 2.3. Particular 3 re Smith It was alleged that Smith had wilfully contravened Clause 8 of the Regulation. The Tribunal is satisfied that Smith contravened Clause 8 and that the contravention was wilful. 2.4. Particular 4 re Smith It was alleged that Smith had wilfully contravened Clause 13 of the Regulation. The Tribunal is satisfied that Smith contravened Clause 13 and that the contravention was wilful. 2.5. Particular 5 re Smith It was alleged that Smith had wilfully contravened Clause 14 of the Regulation. The Tribunal is satisfied that Smith contravened Clause 14 and that the contravention was wilful. 2.6. Particular 6 re Smith It was alleged that Smith had acted in contravention of Section 122 of the Workers Compensation Act 1987. The Tribunal is satisfied that there was no contravention of Section 122 of the Workers Compensation Act 1987. The Tribunal now turns to a consideration of Particulars 7 to 14 of the complaint against Smith. In doing so, it is convenient for the Tribunal to deal with these Particulars in two sections. Particulars 7 to 11, inclusive, relate to a transaction involving clients named Mr and Mrs Cuthbert (the Cuthberts) and Mr Todd (Todd), and these will be dealt with in the first section. Particulars 12 to 14, inclusive, relate to transactions involving a client named Matheson, and these will be dealt with in the second section. 2.7. Particulars 7 to 11 re Smith - the First Section In Particular 7 it was alleged that Smith had failed to account to his clients. In Particular 8 it was alleged that Smith had wilfully breached Section 41(1) of the old Act. In Particular 9 it was alleged that Smith was guilty of gross negligence in relation to the proposed purchase of a property by the Cuthberts. In Particular 10 it was alleged that Smith had misled his clients, the Cuthberts. In Particular 11 it was alleged that Smith had preferred the interests of his client, Todd, over the interests of his clients, the Cuthberts. During the period from about March to May 1985 Smith acted on the sale of Todd's property at Stokers Siding (the property). Todd had advertised the property for sale privately, and had received responses from the Cuthberts and from Mr and Mrs Lewis (Lewis). Todd instructed Smith to send contracts to both the Cuthberts and Lewis and to exchange with the first to return an executed contract and deposit. Both contracts and deposits were returned to Smith at about the same time. Todd then instructed Smith to exchange with the Cuthberts and not to proceed with the sale to Lewis. Smith then returned the deposit to Lewis, and proceeded with the formalities for the sale from Todd to the Cuthberts, in the course of which he also acted for the Cuthberts. The deposit of $2,600.00 paid by the Cuthberts was deposited by Smith in to his trust account and recorded in a trust ledger account in their name. He also received from the Cuthberts the sum of $356.00 for stamp duty. That sum was paid by way of a bank transfer into Smith's office account. Early in May 1985 Smith received a telephone call from the Cuthberts. They informed him that they would not be proceeding with the sale because they had inspected the property and were not satisfied that it met the expectations held out to them by Todd. The Cuthberts were from Melbourne and had commenced the purchase of the property `sight unseen'. Smith suggested to the Cuthberts that they should put their grievances in writing to him so that he could refer them to Todd and "attempt to resolve the problem". The Cuthberts did not respond to that suggestion at that time. In the meantime, Smith reported to Todd, and was instructed by Todd to send a fresh contract to Lewis and to seek an exchange with Lewis. Smith complied with that instruction without informing the Cuthberts. Instead, Smith continued with further formalities in the sale to the Cuthberts. Early in June 1985, Smith received a letter from the Cuthberts' bank informing him that the Cuthberts had withdrawn from the purchase and that their application bank finance had been cancelled. Meanwhile, Todd, who had left the district, wrote to Smith demanding the deposit lodged by the Cuthberts. In the same letter, Todd informed Smith that he had personally negotiated the sale to Lewis. He also threatened to lodge a complaint against Smith with the Law Society unless the deposit was lodged in Todd's account by 3 July 1985 and added "you have no instructions from me to use the services of a Barrister". Smith had previously indicated that he was contemplating obtaining the opinion of a barrister as to the respective rights of Todd and the Cuthberts. On 11 July 1985 Smith sent a brief to a barrister. In that brief he stated that he sought advice on behalf of Todd. Thereafter he continued to deal with both Todd and the Cuthberts with the object of resolving the dispute between them. Early in August 1985, Smith received the barrister's advice. On 16 August 1985, Smith wrote to both Todd and the Cuthberts. He sent each of them a copy of the barrister's advice. That advice, among other things, informed Smith that he should refer both parties to independent solicitors. Notwithstanding that advice, Smith continued to deal with the affairs of both parties for a short time. On 23 August 1985 he drew a cheque for stamp duty on the trust account containing the deposit lodged by the Cuthberts and sent the cheque to the stamp duties office in payment of the stamp duty on the sale from Todd to the Cuthberts; on 27 September 1985 he acted for Todd to complete the sale from Todd to Lewis; on 14 October 1985 he drew a cheque on the Cuthberts' trust account for $100.00 to pay the barrister's fees for the advice; on 6 November 1985 he transferred $300.00 from that account to his office account for his legal costs of acting for the Cuthberts. Meanwhile, Smith had contracted to sell his law practice to another solicitor. That sale was completed on 19 December 1985. The sequel to this sorry saga is that Todd ultimately received the deposit paid by the Cuthberts, the Cuthberts received $2,956.00 from Smith as compensation sought by them in these proceedings, and Smith now finds himself before this Tribunal as a result of the events which can best be described as bizarre in the extreme. 2.8. Particular 7 re Smith This was the allegation that Smith had failed to account to his clients, the Cuthberts. This and all other allegations referred to in these findings are set out in detail in annexure "A" hereto. In his statutory declaration (exhibit "S 1"), and in evidence before this Tribunal, Smith admitted this allegation. Furthermore, the allegation was clearly established by the facts given in evidence. The Tribunal notes that subsequent to the filing of the complaint, Smith has accounted to the Cuthberts by paying to them the amount of compensation which they claimed in these proceedings. As to Particular 7, the Tribunal is satisfied that Smith failed to account to his clients as alleged. 2.9. Particular 8 re Smith This was the allegation that Smith had wilfully breached Section 41(1) of the old Act. Section 41(1) was the relevant section in force at the time of the events under consideration. It required all `trust' moneys received for or on behalf of any person to be held exclusively for such person, to be paid to such person, or to be disbursed as he directs, and until so paid or disbursed to be paid into a trust account. Smith was alleged to have made various payments out of the trust account held for the Cuthberts without their authority. As has already been noted, he transferred $300.00 to his office account for his costs, and paid $100.00 to a barrister for an opinion. He also sent a cheque for $356.00 to the Stamp Duties Office. As to this latter payment, Smith claimed that it was sent by him in compliance with his personal undertaking to the Stamp Duties Office given early in his dealings with the Cuthberts. That undertaking was necessary because the staff at the Stamp Duties Office had been on strike, resulting in a requirement that solicitors give personal undertakings as to payment of stamp duty in order to facilitate the stamping of documents. The Tribunal acknowledges that situation, but points out that the undertaking was given by Smith personally. Consequently he should have made the payment from his own funds, and not from the trust moneys held for the Cuthberts, because by that time the Cuthberts had terminated their instructions to him. Smith acknowledged that proposition during the course of his evidence. In addition to the above payments, Smith also transferred to the purchaser of his practice the balance of the funds held by him on behalf of the Cuthberts, without obtaining their authority. He also transferred to the purchaser of his practice the trust moneys of eight other clients without obtaining their authority. In his statutory declaration (exhibit "S 1"), and in evidence before this Tribunal, Smith admitted this allegation. Furthermore, the allegation was clearly established by the facts given in evidence. As to Particular 8, the Tribunal is satisfied that Smith breached Section 41(1) of the Legal Practitioners Act 1898 and that the breach was wilful. 2.10. Particular 9 re Smith This was the allegation that Smith was guilty of gross negligence in relation to the proposed purchase of a property by the Cuthberts. This allegation arose out of Smith's general course of conduct in handling the affairs of the Cuthberts. Briefly, that conduct included: 2.10.1. Failing to advise the Cuthberts of their rights of rescission. 2.10.2. Failing to advise the Cuthberts of their position in relation to the deposit. 2.10.3. Seeking the advice of a barrister without obtaining the Cuthberts' instructions, and failing to brief a barrister separately on their behalf. 2.10.4. Failing to recognise a conflict of interest and to advise the Cuthberts properly as to their rights. 2.10.5. Exchanging contracts with substitute purchasers without advising the Cuthberts. 2.10.6. Paying stamp duty out of the trust money held for the Cuthberts. In his statutory declaration (exhibit "S 1"), and in evidence before this Tribunal, Smith admitted this allegation. Furthermore, the allegation was clearly established by the facts given in evidence. As to Particular 9, the Tribunal is satisfied that Smith was guilty of gross negligence as alleged. 2.11. Particular 10 re Smith This was the allegation that Smith misled his clients, the Cuthberts. It was alleged that on 9 April 1985 Smith wrote to the Cuthberts advising them that he was in the process of having their documents stamped. It was further alleged that Smith had taken no such action when the Cuthberts informed him on or about 12 May 1985 that they were not proceeding with the transaction, and that it was not until about 23 August 1985 that he forwarded a cheque to the Stamp Duties Office in payment of stamp duty. The allegation relied on the Complainant's claim that Smith did not proceed, in about April 1985 to have the documents stamped. That claim arose because the Complainant's investigator noted from the file that the stamp duty was not paid until August 1985. The evidence disclosed that Smith did in fact have the documents stamped in about April 1985. At that time the staff at the Stamp Duties Office was on strike, and arrangements were made by that office to stamp documents on receipt of personal undertakings by solicitors to pay the stamp duty when called upon to do so. Smith gave his personal undertaking when the documents were stamped in about April 1985, and later, when called upon to do so, he paid the stamp duty in about August 1985. Of course he paid that stamp duty out of the funds entrusted to him by the Cuthberts, but that is dealt with separately in these findings. The crucial point is that the allegation in Particular 10 was not established. As to Particular 10, the Tribunal is satisfied that Smith did not mislead his clients as alleged. 2.12. Particular 11 re Smith This was the allegation that Smith preferred the interests of his client, Todd, over the interests of his clients, the Cuthberts. The items of this allegation arise generally from Smith's conduct of the affairs of the Cuthberts. They are set out in annexure "A" hereto, and have already been referred to above. In his statutory declaration (exhibit "S 1"), and in evidence before this Tribunal, Smith admitted this allegation. Furthermore, the allegation was clearly established by the facts given in evidence. As to Particular 11, the Tribunal is satisfied that Smith preferred the interests of his client, Todd, over the interests of his clients, the Cuthberts, as alleged. 2.13. Particulars 12 to 14 re Smith - the Second Section In Particular 12 it was alleged that Smith acted for a client when he was aware, or ought to have been aware, that in so acting he was personally in breach of the Bankruptcy Act 1966 (Cth) and the Crimes Act 1914 (Cth). Particulars 13 and 14 were, by consent, added during the course of the hearing by way of amendment to the complaint. They have been set out in full earlier herein. In effect they arose out of the same circumstances covered in Particular 12 and, according to Counsel for the Complainant, and accepted by Counsel for Smith, they were added purely to "reveal to Mr Smith, fully, the submissions to be made" by the Complainant at the conclusion of evidence. In Particular 13 it was alleged that Smith altered documents in a material respect with intent to defraud the Queensland Stamp Duties Office. In Particular 14 it was alleged that Smith wrote to his agents a letter which was false in material respects with the intent of misleading the Queensland Stamp Duties Office. From about the beginning of 1989 Smith acted on various matters for a client named Matheson (Matheson). In so acting, Smith dealt with Matheson in connection with the receipt on behalf of Matheson of certain moneys from the sale of a property at Murwillumbah (the Murwillumbah property), and also in connection with the purchase by Matheson of certain property in Queensland (the Queensland property). In May 1989 Smith received $64,667.60 on behalf of Matheson from another Solicitor who had been acting for Matheson. That money represented the net proceeds of the sale of the Murwillumbah property which had been held in the names of Theodore James Symons and Helen K. Masters. Smith deposited the money into his trust account in Matheson's name. He was instructed by Matheson that the money was to be used in part payment of the purchase of the Queensland property. In the course of acting for Matheson on the purchase of the Queensland property, Smith was instructed by Matheson to name Mr and Mrs Formella (the Formellas) in the contract and transfer as purchasers of the property. The Formellas were apparently relatives of Matheson. When Smith received these instructions from Matheson, he was asked by Matheson "Can I transfer it over to my name at some stage?". Smith said "Yes". The contract and transfer were prepared showing the Formellas as purchasers. The sale was settled in due course at about the end of May 1989. However, the documents were not stamped, but were held by Smith. Smith also held in his trust account on behalf of Matheson the sum of $811.74 being a balance of moneys due to Matheson. On 21 August 1989 Smith wrote to Matheson. Among other things Smith said: "The amount of $811.74 remains in our trust account. We note your instruction to hold this sum pending the demise of your bankruptcy wherefrom the documents can be transferred from the names of Mr and Mrs Formella to yourselves, and can then be stamped and registered". On 10 October 1989 Smith again wrote to Matheson. The letter contained the following: "We note your advices that your bankruptcy situation has now altered and you are now free to purchase the property in your own names. We confirm we can now amend the Contract and Transfer documents and proceed to stamping and registration". Smith altered the contract and transfer, substituting Matheson as purchaser. He also wrote initials, purporting to be those of the original parties, alongside the alterations. In doing so, he did not obtain the permission of the original parties, nor did he inform them of his action. He then sent the altered documents to the Queensland Stamp Duties Office for stamping, after which he completed the transfer of the property into the name of Matheson. On 31 May 1990, Smith wrote to his Brisbane agents. In that letter he referred to "an evasion of stamp duty", and asked his agents to "let us have your comments and thereafter take the matter up with the Stamp Duties Office and clarify the position". In fact the matter was not taken up with the Stamp Duties Office. It is relevant, however, that in his letter to his agents, Smith made statements which were false in material respects with the intention that the false information would be conveyed by the agents to the Stamp Duties Office, and for the purpose of distancing himself from the alterations to the documents. In his statutory declaration (exhibit "S 1"), Smith did not directly and unequivocally admit all the allegations contained in Particulars 12 to 14. Indeed, his response in his statutory declaration to those allegations was conspicuously brief. However, he did not deny the allegations, and he did state the following: "I admit that with the benefit of hindsight I should have been suspicious of his motives in putting the property into the names of the Formellas. I admit that my actions, after becoming aware that Matheson was an Undischarged Bankrupt, were most improper and that upon ascertaining that he was an undischarged bankrupt I should have ceased to act for him". That limited admission was, however, fully made up by admissions made by Smith under cross examination in evidence. Consequently, the Tribunal is satisfied that the allegations in Particulars 12 to 14 were established. 2.14. Particulars 1 to 6 - Findings re Smith As already indicated under the heading "2. The complaint against smith", the Tribunal applies similarly to Smith those general findings and comments on Particulars 1 to 6 as the Tribunal has already applied to Munro under the heading "1.7. Particulars 1 to 6 - Findings re Munro". However, for the purpose of the record, the Tribunal finds that Smith wilfully contravened those provisions of the Act and Regulation referred to in Particulars 1 to 5, inclusive, of the complaint, and that by reason of such conduct he is guilty of professional misconduct. 2.15. Particulars 7 to 11 - Findings re Smith As to Particular 10, the Tribunal has already indicated that it is satisfied that the allegation was not established. As to Particulars 7, 8, 9, and 11, the Tribunal has already indicated that it is satisfied that the allegations contained in those Particulars were established. Those allegations referred to conduct on the part of Smith involving failure to account, wilful breach of Section 41(1) of the old Act, gross negligence in acting for clients, and the preferring of the interests of one client over those of another client. Having consider all of the facts given in evidence relating to these allegations, the Tribunal finds that by reason of such conduct Smith is guilty of professional misconduct. 2.16. Particulars 12 to 14 - Findings re Smith The Tribunal has already indicated that it is satisfied that the allegations contained in Particulars 12 to 14 were established. Those allegations referred to conduct on the part of Smith involving his acting personally in breach of the Bankruptcy Act 1966 (Cth) and the Crimes Act 1914 (Cth), altering documents in a material respect with intent to defraud the Queensland Stamp Duties Office, and writing to his agents a letter which was false in material respects with the intent of misleading the Queensland Stamp Duties Office. Having consider all of the facts given in evidence relating to these allegations, the Tribunal finds that by reason of such conduct Smith is guilty of professional misconduct. 2.17. Orders re Smith In determining the orders to be made in the case of Smith, the Tribunal has taken into account the circumstances surrounding Smith's conduct, and the evidence before the Tribunal as to his fitness. The case against Smith was much more complex than that against Munro, and consequently it requires more extensive treatment. Smith's conduct in the matters referred to in Particulars 1 to 5 attract the same concern and condemnation as has already been expressed by the Tribunal in relation to Munro. However, without minimising the seriousness of those matters, the Tribunal takes a much more serious view of the remaining allegations against Smith. Those allegations were covered in Particulars 7 to 9, and Particular 11, in one section, and in Particulars 12 to 14 in a second section. It is convenient for the purpose of these comments to refer to the former section as the Cuthbert matter, and to the latter section as the Matheson matter. In the Cuthbert matter, it would be difficult to imagine a more serious case of conflict of interest. Furthermore, Smith's conduct both before, and particularly after he became aware of the conflict, is almost beyond comprehension. For example: [] He failed to account properly to his clients in respect of their trust moneys. [] He dealt with the trust moneys of his clients in ways which were not authorised by them, or even known to them at the time. [] His conduct of the affairs of his clients was strewn with acts of gross negligence. [] He preferred the interests of one client to that of another to a substantial extent. To compound the problem even more, at the height of the conflict, when both clients were making strident opposing demands, Smith sought the advice of Counsel on behalf of one of his clients. On the face of it, one might be inclined to conclude that in doing so he was taking a proper course. However, in so briefing Counsel, Smith did so in the face of a direct instruction from his client not to do so. Furthermore, he did it to obtain advice, the answer to which should have been obvious to any reasonably competent Solicitor. To crown this debacle, he used the money of one of the clients to pay for Counsel's advice, although the advice was clearly obtained for his own personal use. An even more disturbing feature of the Cuthbert matter was the suggestion, made in cross examination, that Smith had deliberately deceived the Law Society. The transcript (T.117), referring to a letter written by Smith to the Law Society, includes this exchange: "This is your account of the matter to the Law Society?---Yes. When you are writing to the Law Society you want to be truthful and frank and accurate, is that correct?---Yes. Was it your intention to be truthful, frank and accurate in this letter?---Yes. This was a letter where the Law Society was inquiring into this transaction?---Yes. In the last part of folio 62 you say: `I reiterate that up until the time of my ceasing practice the deposit moneys were intact and had either of the parties issued process against the other for a claim on those moneys then the moneys could have been paid to court by interpleader. I did not pay those funds out.' ?---Yes. That is not a true, accurate and frank account?---Not in hindsight, when I wrote it it should have been, `the deposit less my costs in respect of it', but... Even that would have been false, wouldn't it, Mr Smith?---Yes. Mr Smith, you have gone out of your way to deceive the Law Society?---No. I think the moneys were subsequently paid out by Brian Forbes to Todd. Mr Smith: "I reiterate that up until the time of my ceasing practice...(reads)...could have been paid to court by interpleader"?---Yes. That is simply not correct, is it?---That is not correct, no. It is false, isn't it?---Yes. Why did you write that?---I don't know. You wrote that to deceive the Law Society, did you not?---No, I didn't, no, I didn't. I didn't think it was important in relation to the whole thing. The important thing was I was in conflict, I was in a position of conflict." And later in the same exchange: "Of course, telling the Law Society that the money was intact distanced you from any complaint that you didn't hold the money as stakeholder properly?---In hindsight, yes. That was your intention in writing that, was it not?---That wasn't my intention. The moneys held was the minor matter, the position of conflict was the thing that was the problem, I acted in conflict." In considering that exchange in evidence between Smith and Counsel for the Complainant, the Tribunal asks itself the rhetorical question - "If Smith did not say those things in his letter to deceive the Law Society, what was his purpose in saying them?" Smith certainly did not provide an answer in evidence. The best he could offer was "I don't know". The Tribunal has noted, and has taken into account, the circumstances in which Smith was placed at the time of the events which brought him before this Tribunal. As to the Cuthbert matter, Smith said in his statutory declaration (S 1 at page 50), and in his evidence that at the time he had been in practice only four years and that he had not had a matter where the parties were in such a position of conflict. His evidence under cross examination on this point is, perhaps, revealing. He said: "I wouldn't act for two parties again. At that stage I should have just sent them away like I have done subsequently. I have had other matters with conflict positions between two parties and I have sent them away. I can't act, I know." As to Smith's circumstances during the period covering a number of the allegations made against him, the evidence revealed the following: [] He was carrying a heavy work load. [] He was working very long hours. [] He was under pressure from clients. [] He was involved in local community affairs. [] He commenced a university course in Urban and Regional planning. [] At a relevant time in relation to these proceedings, Smith suffered family bereavements. [] As a consequence of personal pressures, Smith resorted to alcohol. These matters will be given due weight by the Tribunal in the context of Smith's conduct generally. However, the Tribunal feels obliged to recognise that conduct of a Solicitor involving deceit of the Law Society has always been regarded as extremely serious. Such conduct is rarely, if ever, excused, and it would be difficult to find any circumstances which would justify such conduct. The Matheson matter gave the Tribunal even more concern than did the Cuthbert matter. The Tribunal finds it difficult to accept that any reasonably competent and responsible Solicitor would lend himself to the conduct attributed to Smith in this matter. Yet it was firmly established in evidence that in acting as he did for Matheson, Smith committed extremely serious breaches of his duties and responsibilities as a Solicitor. Here are some examples: [] He received moneys on behalf of Matheson, and accepted instructions from him, in circumstances in which any reasonable person should have suspected that Matheson was evading his legal responsibilities as a bankrupt. [] After positively becoming aware that Matheson was a bankrupt, Smith retained money in trust for Matheson, and held back legal documents which in the ordinary course should have been processed. He did this in circumstances and in a manner which could have had only one purpose - to enable Matheson to evade his legal responsibilities as a bankrupt. [] After being informed that Matheson had received his discharge from bankruptcy, Smith accounted for the moneys he had held on behalf of Matheson. He also made material alterations to the documents which had been held back, and even went so far as to write bogus initials on the documents to support the alterations. The effect of these actions was not only to avoid payment of stamp duty properly payable to the Queensland stamp duties office, but also to continue to enable Matheson to evade his legal responsibilities as a bankrupt. [] More than six months after so dealing with the property documents, Smith wrote to his agents a letter which was false in material respects with the intent of misleading the Queensland stamp duties office. That letter was clearly written by Smith to cover his tracks. Had he succeeded, one attendant result would have been that he would have caused his agents to be unknowingly involved in the deception. The Tribunal's very deep concern over Smith's conduct in the Matheson matter was exacerbated even more by Smith's responses in evidence to questions under cross examination. Here are some examples: "It would be very wrong of you to use your trust account to shield the money from Mr Matheson's trustee in bankruptcy, would it not?---Yes. Did you do that?---Yes, but not intentionally. Not intentionally?---I did not think of the trustee in bankruptcy when the moneys were going in and out of trust. I did not put my mind to it. I did not think of the trustee in bankruptcy, I was looking after Matheson." "On 21 August 1989, you were reporting to Mr and Mrs Matheson about a transaction, is that correct?---Yes. And it turns out that at the end of that transaction $811 was held in your trust account?---Yes. Is that a correct assumption?---Yes. You then go on to say, `The amount of $811.74 remains in our trust account. We note your instruction to hold this sum pending the demise of your bankruptcy where from the documents can be transferred from the names of Mr and Mrs Formella to yourselves, and can then be stamped and registered'?---Yes. Did you believe that by obtaining those instructions that you were to hold this money in your trust account, pending the demise of the bankruptcy, and that you were shielding this money from the trustee in bankruptcy?---No, I did not think that at all. I thought I was holding for Matheson. You were holding the money for Matheson were you not?---Yes. And you were holding it pending the demise of his bankruptcy?---Yes. You were not, thereby, endeavouring to shield the money from the trustee in bankruptcy?---No, the $811 was to be part-payment of the stamp duty." "Do you accept that you altered the transfer in a material aspect?---Yes. Do you accept that you altered that transfer in order to avoid stamp duty?---Yes, to help the client." "You and he were agreeing in August 1989 that the transfer would not be made into his name until he was free of his bankruptcy?---That is right. I suggest to you that that was to shield this property from the official receiver in bankruptcy?---Not at all. What was the purpose, if it was not that purpose?---To shield the property from the trustee? Yes?---I did not even think of the trustee, I should have, but I did not put my mind to the bankruptcy situation. I should have, but I did not. You are telling the truth are you?---Absolutely. You are telling this tribunal the truth?---Absolutely. You were instructed on folio 40 that the documents of title could be transferred from the names of Formella to Matheson and his wife?---Yes. That was to occur after his discharge from bankruptcy?---That is right. So that bankruptcy was important as to the timing, was it not?---It was. Obviously Matheson knew it. You did not?---I should have, but I did not even think about the trustee in bankruptcy, I should have. What other explanation was there, Mr Smith?---I do not know, I do not know." The transcript of evidence contains many such examples of Smith's responses under cross examination when faced with the inescapable logic of the necessary consequences and purposes arising from his conduct. The Tribunal notes that a recurring thread appearing in his responses, when facing acts by him which were clearly wrong, consisted of words such as "I did not even think of (it)", "I did not put my mind to (it)". Yet a further example of the problem of Smith's general attitude appears in his answers to cross examination on the subject of his letter to his agents (T.93): "What you said to Hemming and Hart would be the truth. Firstly, without just reading the letter - what you would say to Hemming and Hart would be the truth, is that correct?---Can I read it?" Pausing at that point, one would have thought that a competent and honest Solicitor would have responded immediately in the affirmative. The cross examination continued: "Yes?---No, it is not right. I think you told the tribunal that you wrote a letter to Hemming and Hart. Is that the letter?---Yes, that is the letter. The gist of your evidence was that it was a letter to Hemming and Hart so that they could rectify the position?---That is right. You would not tell them anything in this letter that was untrue, would you?---I have told them something that is untrue. Was it your habit of writing things in letters which were untrue?---Not usually. This is not the only occasion that you have written some thing untrue in a letter, isn't it?---What do you mean. Not that I am aware, I do not usually do that. When you say you don't usually do that, does that imply that there are occasions on which you write untrue things in a letter?---I think every solicitor says to government departments, you know, you stretch it a little bit to get some reaction quickly from the government department, but I don't go out to do that, no." The cross examination continued in the same vein, and later(T.94): "Why did you lie in that letter?---I wanted the stamp duty matter resolved. I thought that was the problem at the time. Houlihan said they wouldn't act for Matheson because there had been an evasion of stamp duty. I wrote to Hemming and Hart to resolve the evasion of stamp duty matter. Mr Smith, you were there instructing your agents with the intention that your agents go and approach the stamp duties office, is that correct?---Yes. You intended your agents to convey this information to the stamp duties office?---Yes. That was false?---That was right. You knew that the transfer was altered?---Yes. In a material respect?---Yes. So you were thereby suggesting that Matheson had something to do with that?---Yes. And you were thereby distancing yourself from the alteration?---I was. You agree with that?---Yes. Mr Smith, I want to suggest to you that you were assisting your client to conceal his property from his trustees?---Indirectly I was, yes. Do you agree that you were?---Yes. Did you at the time consider that that was wrong?---At what time? In 1989, between May and October?---What, concealing the property from the trustee? Yes?---I didn't even put my mind to the trustee - I didn't even think of it. I had that much going on. I had Bruce Horn's practice in chaos, I had 750 odd files that I was looking after, I...". The subject of Smith's letter to his agents was taken yet further in later cross examination: "What was your motivation in writing the next three lines?---To get the stamp duty matter fixed up. I wanted the stamp duty matter out of the way. I thought that if that could be resolved, the matter would be gone. The manner in which you proposed to do that was to instruct your agents with a lie?---Yes, to look like I was ignorant of the fact that, as I said, to save my backside. You were instructing your agents to falsely pretend to the stamp duties commissioner that you were not a party to this alteration?---Yes... Of course you are conscious there that you are misleading your agents?---Yes. Then you say, `It was always the intention of the parties that Mr and Mrs Formella were to hold the property for Matheson until he was discharged from his bankruptcy'?---Yes. `And Matheson has done all the negotiations with Mr and Mrs Ogilvie'?---That is correct. `Mr and Mrs Ogilvie were also always aware that Matheson was a purchaser of the property and were also aware that Matheson was an undischarged bankrupt'?---Yes, I believe that to be the case. You believe that to be the case?---Yes. How do you know that Mr and Mrs Ogilvie were, for instance, aware that Matheson was an undischarged bankrupt at the time of purchase?---Mr and Mrs Ogilvie? Yes, how are you aware that Mr and Mrs Ogilvie knew Matheson was an undischarged bankrupt?---Mr and Mrs Formella? No, Ogilvie. Just read your last sentence, the very last sentence?---The first part is right and the second part is not. You say that the Ogilvies were aware that Matheson was the purchaser?---Only that Matheson did all the negotiations with Ogilvie, inspected the property and... The Chairman: But you say that it is not correct to say that they were aware that he was an undischarged bankrupted?---That is right. Mr Robinson: That part of that line then is false?---That is right. What was your intention when you wrote that?---I was going to fix up the stamp duties problem that all the parties were ®MDBR¯au fait ®MDNM¯with the position and the stamp duties office matter could be resolved. It was wrong... In the last part of that paragraph you have given them false instructions?---That is right. Your intention was to make it look as if Mr and Mrs Ogilvie were parties to a deception?---Yes. You intended that the stamp duties office might be given that information?---Yes... It was your intention in the last part of this letter to again distance yourself from culpability in the transaction, was it not?---Absolutely. Whilst you were giving evidence in chief this morning, did you think that it was appropriate to draw these matters to the tribunals attention, in your evidence in chief?---My instructions to my counsel were that I want to come here and give a full disclosure and that is what I set out to do. I cannot live like this any more. Mr Smith, bearing that in mind, there was nothing to stop you telling the tribunal in your evidence in chief that in two respects you had written a letter which you now wanted to explain?---The letter thing was the furthest thing from my mind. I wanted to make a clean breast in relation to the whole thing. If someone had asked me - I have come here to tell it." The Tribunal has gone further in quoting from the transcript than might otherwise have been the case. However, this has been done as a reflection of the Tribunal's deep concern over the extremely serious nature of Smith's conduct as revealed in the evidence. The Tribunal has recorded findings of professional misconduct against Smith. Those findings arise out of extremely serious conduct, including a pattern of deception and dishonesty which continued over a comparatively long period of time, and which involved and implicated a number of different persons and official bodies. Despite Smith's attempts in evidence to distance himself from culpability in those matters, on the facts which emerged from the evidence, and taking into account the manner in which the evidence was given, the Tribunal is satisfied that Smith's culpability has been established. The Tribunal now turns to a consideration of some further remaining aspects of Smith's case. These involve his medical condition, including the question of alcohol, the evidence contained in the statutory declarations submitted on his behalf (exhibit S 4), and Smith's stated current attitude arising from the evidence. As to Smith's medical condition and the alcohol problem, the Tribunal received in evidence two medical reports from Dr Christopher Danesi, Consultant Psychiatrist, of Tweed Heads (exhibit S 2). The first of such reports is dated 10 December 1992. It was used initially to obtain an adjournment of these proceedings on the second day of the scheduled hearing. That report painted a depressing picture of Smith's mental condition and his alcohol consumption. The nature of that report certainly required further clarification. The second report dated 22 January 1993 went part of the way towards resolving the questions which arose from the first report, but it left a lingering doubt, albeit perhaps a minor one, as to Smith's ability to cope under pressure and to resist further lapses into alcohol abuse. The Tribunal has noted Dr Danesi's final qualification: "There will always be some risk of further alcohol abuse under pressure although this seems to be under control at present". The statutory declarations (exhibit S 4) come from a range of Solicitors and lay persons and are generally supportive of Smith. However, it is obvious that none of the declarants were, in making their declarations, aware of the gravity and extent of the matters revealed in evidence, in respect of which the extracts quoted herein from the transcript are examples. As to Smith's current attitude, the Tribunal has taken into account Smith's responses in evidence already outlined above. It has also taken into account the matters put forward by Smith in his statutory declaration (exhibit S 1). The Tribunal has given full and exhaustive consideration to this matter, and once again it expresses its deep concern over the very serious nature of Smith's conduct. It feels bound to make orders which reflect that deep concern and which serve the purposes required to be served by orders of the Tribunal. As to those purposes to be served, it has already been well established in another place that such orders "are not made as much to punish the practitioner as such. They should go no further than is necessary to uphold proper standards and to protect the public interest" - (Fraser v The Law Society (1992) 5LPDR 12 at page 16). Following the above principle, the Tribunal is satisfied that the extent and gravity of the dishonest and deceitful conduct committed by Smith, together with his reckless involvement and implication of other persons and official bodies, as well as his general attitude of distancing himself from culpability when faced squarely with those problems, render him unfit to continue in practice as a solicitor. The orders to be set out below are intended to mark the extremely serious nature of Smith's conduct by sending a strong message to the profession that such an abandonment of proper standards will not be tolerated, and, in so sending such a message, thereby contributing to the protection of the public interest. 2.18. Costs In view of the orders to be made as to costs, it is appropriate for the Tribunal to address its reasons for those orders. Of the three hearing days, the first day was taken up with evidence on Particulars 1 to 6 affecting both Munro and Smith. The hearing scheduled for the second day was aborted by Smith's application for adjournment. It is noted that the Tribunal was given no proper warning of that application. The third day was taken up entirely by evidence on Particulars 7 to 14 involving Smith only. The Tribunal has taken these factors into account in apportioning the orders as to costs. The Tribunal therefore orders in relation to the Solicitor William Andrew Munro: 1. That the Solicitor pay a fine of $4,000.00 within sixty days from this date. 2. That in default of compliance with Order 1 hereof the Solicitor's practising certificate be cancelled and that a practising certificate not thereafter be issued to the Solicitor until he has complied with such order. 3. That the Solicitor pay twenty five per centum of the costs of the Complainant, such costs to be assessed on a solicitor and client basis as if taxed in the Supreme Court of New South Wales. 4. That in respect of Order 3 hereof, either party to have liberty to apply. The Tribunal therefore orders in relation to the Solicitor Graeme Alan Smith: 1. That the name of the Solicitor Graeme Alan Smith be removed from the roll of solicitors, such order to take effect upon the lapse of 28 days from this date. 2. That the Solicitor pay seventy five per centum of the costs of the Complainant, such costs to be assessed on a solicitor and client basis as if taxed in the Supreme Court of New South Wales. 3. That in respect of Order 2 hereof, either party to have liberty to apply. Dated 1 April 1993. 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.