The Legal Services Tribunal of New South Wales CITATION : Richard Scott Cooper [1990] NSWLST 1 PARTIES : Richard Scott Cooper FILE NUMBER(S) : of CORAM: Mr D Patten (Presiding Member) - - CATCHWORDS: :- LEGISLATION CITED: Legal Profession Act 1987 CASES CITED: DATES OF HEARING: DATE OF JUDGMENT: 11/08/1990 LEGAL REPRESENTATIVES: JUDGMENT: In this matter the Council of the Law Society of New South Wales (the Complainant) complained pursuant to Section 135 of the <I>Legal Profession Act 1987<D> (the Act) that the conduct of Richard Scott Cooper, a legal practitioner, (the Solicitor) amounted to professional misconduct. The grounds stated in the complaint were: 1. Misappropriation of monies. 2. Wilful contraventions of Section 61 of the Legal Profession Act, 1987. 3. Wilful contraventions of Section 62 of the Legal Profession Act, 1987. 4. Misleading the complainant. The Complainant sought the following orders: 1. That the name of Richard Scott Cooper be struck off the Roll of Solicitors. 2. That RICHARD SCOTT COOPER be ordered to pay the costs of the complainant as between solicitor and client in these proceedings including the costs of the investigation. The Tribunal heard the matter on 23 October 1990 and reserved its decision. At the beginning of the hearing the Solicitor's name was called. He did not appear. Mr Huntington then tendered evidence of service by way of statutory declarations of Robert Norman Jewell dated 10 August 1990, 9 August 1990 and 20 August 1990. After considering those declarations, and hearing submissions by Mr Huntington, the Tribunal was satisfied that the Solicitor had been given proper notice of the present hearing and that it should proceed with the hearing in the absence of the Solicitor. The Complainant's case consisted of: 1. Statutory declaration of Robert Norman Jewell dated 10 August 1990. 2. Statutory declaration of Robert Norman Jewell dated 9 August 1990. 3. Statutory declaration of Robert Norman Jewell dated 20 August 1990. 4. Complaint dated 24 May 1990 including statement of particulars of grounds of complaint. 5. Statutory declaration of John Richard Hunt dated 24 May 1990 annexing the complaint. 6. Statutory declaration of John Richard Hunt dated 24 July 1990 annexing a report of Jean Sayer dated 15 November 1989. 7. Oral evidence by Jean Sayer, Chartered Accountant. The allegations against the Solicitor are set out in detail in the statement of particulars of grounds of complaint which forms part of the evidence in these proceedings. The Tribunal does not consider it is necessary to repeat those details here. The relevant matters referred to in that document will be dealt with in this determination. By resolution of 17 November 1988 the Complainant, pursuant to Section 55 of the Act, appointed Miss Sayer to investigate the affairs of the Solicitor. It was clear from the evidence of Miss Sayer that she encountered extreme difficulties in carrying out that investigation. Indeed, throughout the course of the investigation she was never able to make direct contact with the Solicitor despite many attempts by way of messages, enquiries, telephone calls and telegrams. Under the circumstances she was compelled to rely on such information as she was able to obtain from solicitors who had taken over the practice of the Solicitor, from copies of files and accounts records to which she obtained access, from correspondence from the Solicitor to the Complainant, from parties who had dealt with the Solicitor, and from bank records. With what must be regarded as a masterpiece of understatement, she stated in evidence that the Solicitor had not assisted in her investigation at all. She agreed that the records to which she had access did not speak for themselves, although some isolated ledger cards had enabled her to track some movement of monies. Miss Sayer obtained copies of the bank statements relative to the trust account of the Solicitor from when it was opened on 4 August 1987 until the date when the account was closed on 25 October 1988. The trust account was in debit in respect of varying amounts ranging from about $300.00 to about $13,000.00 from 3 May 1988 until 12 August 1988. During that period there was no statutory deposit in existence that could have been offset at any time against the debit balances. In fact the statutory deposit had been fully drawn down on 25 September 1987, and after July 1988 the bank dishonoured any cheques that would have placed the account further in overdraft. Moving on from that preliminary general picture of the situation, we will now cover some of the specific items of the complaint which were dealt with in evidence. Ground one: misappropriation of monies Catherine Meister The Solicitor acted for Ms Meister in an accident claim which was settled for $30,000.00. On 16 December 1987 the Solicitor received that amount from the insurer and deposited it in his trust account. On 23 December 1987 the Solicitor drew a cheque for $25,000.00 against that account and deposited the cheque in his office account. The client complained to the Complainant and the matter was taken up with the Solicitor. He then drew a cheque payable to the client for $20,000.00 on a personal bank account and sent it to the client on 29 January 1988. When asked by the Complainant why he had drawn the cheque on his personal account, he claimed that he had been rushed and had not realised that the cheque had been drawn on his personal account. However, he had in fact signed the cheque. He also gave the Complainant a false explanation for the delay in accounting to the client. It is also worth noting that had he in fact drawn the cheque on his trust account, instead of on his personal account, there would not have been sufficient funds to cover the cheque in view of his earlier withdrawal on 23 December 1987. At no time did the Solicitor have the authority of his client to carry out these transactions on his trust account. Mrs M. Dahdah The Solicitor acted for Mrs Dahdah in a workers compensation claim. On her behalf he received from the insurer's solicitors a cheque for $18,600.00 which he did not pay into his trust account. Indeed, Miss Sayer was unable to ascertain where the money went. On 23 February 1988 the Solicitor drew a cheque for $18,600.00 payable to this client on his trust account. It was drawn on a trust account entitled "Cooper's General Miscellaneous Account", and the funds to cover the cheque were transferred from a number of other trust accounts which had no connection whatever with the client. In other words, the Solicitor used the trust monies of various other clients to fund the amount paid to this client. Gulten Alpak The Solicitor acted for Mrs Alpak in a workers compensation and third party claim. On 22 April 1988 he deposited to the trust account an amount of $50,000.00 awarded in respect of the claim. The client complained to the Complainant that the Solicitor had delayed in accounting to her, and she eventually received from the Solicitor a trust account cheque for ~42,350.02 drawn on the trust account on 25 May 1988. Miss Sayer was unable to find any records to support these transactions, but she did ascertain that the trust account was overdrawn to the extent that there were not sufficient funds to pay the client. Again in this matter the Solicitor gave the Complainant a false explanation of the circumstances. Hilda Brownlie The Solicitor acted for Ms Brownlie in respect of a debt claim against her by Mr Derrick Pittman. He received money from her on instructions to pay the debt, but instead of paying Mr Pittman, he used the money to make up a shortage in another account. Model Management (Aust.) Pty Limited The Solicitor borrowed money from Miss Desiree Devine for the purpose of purchasing from her a business which she operated under the name Model Management (Aust.) Pty Limited. In the records relating to the transaction, the Solicitor stated that Miss Devine was represented by a solicitor named Hovan. Miss Devine complained to the Complainant that she had never instructed Hovan to act for her and that at all times she had only dealt with the Solicitor. On 11 August 1988 the Solicitor gave Miss Devine a cheque for $5,142.00, drawn on his office account, in repayment of the loan. The cheque was dishonoured, and as far as can be established the client has never been paid. Ground four: misleading the Complainant Holmes & Bevan (Equiticorp Financial Services Limited) The Solicitor acted for a client in relation to the payment of a debt under a lease agreement in respect of a motor vehicle. On 9 June 1988 he drew a trust account cheque for $30,000.00 and sent it to Holmes and Bevan who were the solicitors acting for the finance company. The Solicitor then stopped payment on the cheque and subsequently drew and forwarded a second trust account cheque. He also stopped payment on the second cheque. Holmes and Bevan complained to the Complainant and the Solicitor was asked for an explanation. He gave a false explanation to the Complainant, and it is noted that during the delay created by the Solicitor's actions, the vehicle was sold and the finance company was unable to act in relation to the leased vehicle. It is also noted that over the period covered by the cheques there were never any sufficient funds in the trust account to cover the cheques. At this point in the evidence Mr Huntington elected not to take Miss Sayer through the rest of the available evidence, and instead to close the case for the Complainant. The Tribunal notes that the Solicitor has had ample time to consider the complaint and to respond to it. His failure, without explanation, to appear before the Tribunal is in itself a matter for serious concern. The evidence submitted by the Complainant consequently remains unchallenged. Having heard and considered the evidence of the Complainant, and in the absence of any evidence from the Solicitor, the Tribunal is satisfied that all grounds set out in the complaint against the Solicitor have been proved. The Tribunal is satisfied that in these circumstances the conduct of the Solicitor would be reasonably regarded as disgraceful and dishonourable by solicitors of good repute and competency and that he is guilty of professional misconduct. The Tribunal is also satisfied that the Solicitor is not a fit and proper person to practise as a Solicitor and that his name should be removed from the roll of solicitors. The Tribunal therefore orders: 1. That the name of the Solicitor Richard Scott Cooper be removed from the roll of solicitors. 2. That the Solicitor pay the costs of the Complainant, including the costs of investigation, such costs to be assessed on a solicitor and client basis as if taxed in the Supreme Court of New South Wales. If agreement cannot be reached between the Solicitor and the Complainant on the amount of costs, either party to have liberty to apply. Dated:~~ 8 November 1990. 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.