Legal Services Division CITATION: Law Society of New South Wales -V- Wakim [1998] ADT COMPLAINANT: Law Society of New South Wales RESPONDENT: Paul Vincent Wakim Mr C Vass (Presiding Member) ( Judicial Member ) TRIBUNAL: Ms J Greenwood Mr A Kennedy GROUNDS OF COMPLAINT: Professional misconduct DATE OF JUDGMENT: 12/15/1998 Complainant: Mr D. Hipsley (Counsel) Mr R.J. Collins (Solicitor) LEGAL REPRESENTATIVES: Respondent: Mr S. Galitsky (Counsel) Mr T. Bechara & Co (Solicitor) Paul Vincent Wakim – Notice sent to the solicitor under Section 152(1) of the Legal Profession Act 1987 and was responded to, that response was different to an earlier response, allegation that solicitor misled or attempted to mislead the Council; information dismissed. The Tribunal has before it an Information filed by the Council of the Law Society against Paul Vincent Wakim ("the solicitor") in which the Council alleges that the solicitor is guilty of professional misconduct on the grounds that he misled or attempted to mislead the Law Society. The evidence before the Tribunal is that the solicitor from about 1991 was instructed by a Mr. Smith and a company Dealterm Pty. Limited in relation to a partnership arrangement and also in relation eventually to a conveyancing matter. In relation to the conveyancing matter Mr. Smith lodged a complaint against the solicitor by letter dated 7 March 1994 and as a result of the complaint having been lodged with the Society the Law Society wrote to the solicitor on 18 and 23 March 1994. The solicitor eventually responded to those letters by a letter dated 20 October 1994 and in that letter he said "I have not accounted to Smith in respect of the sale of real estate at Lithgow and Harden as he is in dispute with his partner Dealterm Pty. Limited and that dispute has not been resolved". However prior to the October date Mr. James Sofiak a trust account inspector employed by the Law Society had visited the solicitor's practise and in fact completed his inspection on 22 August 1994. Mr. Sofiak inspected the file relating to Mr. Smith and Dealterm Pty. Limited and he noticed in that file a letter of 9 August 1991 from the solicitor to Mr. Smith. The letter indicated that there was a partnership dispute between Mr. Smith and Dealterm and the letter also stated that there was $6,987.83 held in trust which amount would be disbursed in accordance with common written instructions from both partners. Mr. Sofiak did not sight any written instructions and he observed that the relevant cards for the trust account showed that certain disbursements had been paid from those moneys. He stated in his Affidavit that he asked the solicitor for an explanation of the disbursements in the absence of written instructions from the partners and he states that the solicitor said words to the effect: "The dispute between the partners has been resolved and terms agreed upon. I can't put my hands on the document recording the terms just now". There was therefore a conflict between the answer given to Mr. Sofiak in August of 1994 and the statement made by the solicitor in his letter of 20 October 1994. Some time later the matter was considered by the Society's Professional Conduct Committee and as a result the Society wrote to the solicitor on 29 November 1995 pursuant to Section 152(1) of the Legal Profession Act 1987 requiring the solicitor to advise the Society the authority by which a number of payments were made from the trust account relating to the matter of Smith and Dealterm Pty. Limited. The solicitor responded to that letter by letter of 21 December 1995 and in his response he stated that there was a settlement between Mr. Smith and Dealterm Pty. Limited and he goes on to say in that letter: "It is my recollection that David Smith contacted me late in December 1992 and confirmed that he authorised the release of the funds held in the trust account in accordance with the proposal outlined in the letter of accountant, J.L. Nelson dated 25 February 1992." The response in the letter of 21 December 1995 is also in conflict with the response in the letter of 20 October 1994. The solicitor also swore a Statutory Declaration on 22 December 1995 which Declaration was a requirement of the Society as referred to in their letter of 29 November 1995. The effect of the Statutory Declaration is to confirm that there was a settlement of the dispute between Mr. Smith and Dealterm Pty.Limited and that the solicitor had paid out the moneys in accordance with the instructions of Mr. Smith. When Mr. Hiplsey who appeared for the Law Society first addressed the Tribunal he indicated that the complaint by Mr. Smith had fallen away and that the only matter before the Tribunal for its consideration is the subject complaint. The contention of the Law Society is that: "At December 1995 there was an explanation contrary to an explanation given before, and in those circumstances the Society says that there was a misleading or an intentional misleading by the solicitor as to the true nature of the situation with regard to the dispute." It was clear to the Tribunal that the response in the letter of 20 October 1994 from the solicitor to the Society was wrong. When cross examined in relation to the fact that the explanation in that letter was wrong and the solicitor conceded that he "was not careful enough". He further indicated that he: "Had to get a response out. I had to do a response. I was under pressure and it has happened." Later when being cross examined he said: "… But these matters have been going on for some 2 ½ years, thereabouts, I really felt there was some suggestion I had misappropriated moneys or whatever and there was not really any dawning on me that there was any problem misleading the Law Society or anything else. I had done nothing wrong and I did not feel I needed to delve. I had to get this thing off my desk. The stress and pressure was killing me, compounded with what was happening with these enquiries." The evidence was that when the solicitor responded in his letter of 20 October 1994 he had in fact not retrieved the file in relation to the matter but had relied upon his memory. It is also clear from the evidence that before Mr. Smith made his complaint to the Law Society the dispute with Dealterm had been resolved. The complaint therefore by Mr. Smith was simply seeking to reventilate what Mr. Galitsky who appeared for the solicitor suggested was ancient history. In fact the solicitor became very angry about this particular complaint and it is that anger that clouded his judgment when he responded to the Society in his letter of 20 October 1994. Also at that time the evidence is that the solicitor was operating under great pressure because of professional and family circumstances. Section 152 of the Legal Profession Act 1987 provides in sub-section (5): "A legal practitioner or interstate legal practitioner must not mislead or obstruct a Council or the Commissioner in the exercise of any function under this division. The wilful contravention of this sub-section is capable of being professional misconduct." To succeed in establishing this complaint the Law Society must establish that it has been wilfully misled or obstructed by the solicitor. Hardie J. in re. Hodgekiss (1962) 62 SR (NSW) 340 which was an appeal to the Full Court of the Supreme Court of New South Wales from an order of the solicitor's Statutory Committee referred to a number of English cases and in particular a statement by Maughan J. in re. Vickery (1931) 1 Ch. 572 at 583 where he said: "… A person is not guilty of wilful neglect or default unless he is conscious that, in doing the act which is complained of or in omitting to do the act which it is said he ought to have done he is committing a breach of his duty, or is recklessly careless whether it is a breach of his duty or not." The standard of proof required is the civil standard as explained in Briginshaw –v-Briginshaw (1938) 60 CLR 336 at 362 namely reasonable satisfaction on the balance of probabilities. Whilst the judgment of Dixon J. in Briginshaw establishes that the seriousness of the allegations made and the gravity of the consequences which may flow from an adverse finding affects the question as to whether the issues have been proved to the required "reasonable satisfaction"; the High Court in Rejfek –v-McElroy (1965) 112 CLR 517 makes it clear that this should not be understood as imputing a higher standard of proof than the ordinary civil standard. We quote from the judgment at 521-2: "But the standard of proof to be applied in a case and the relationship between the degree of persuasion of the mind according to the balance of probabilities and the gravity or otherwise of the fact of whose existence the mind is to be persuaded are not to be confused. The difference between the criminal standard of proof and the civil standard of proof is no mere matter of words; it is a matter of critical substance. No matter how grave the fact which is to be found in a civil case, the mind is only to be reasonably satisfied and has not with respect to any matter in issue in such a proceeding to attain that degree of certainty which is indispensable to the support of a conviction upon a criminal charge." The Tribunal has considered all the evidence and after taking into account the various pressures that were upon the solicitor at the time he wrote his letter of 20 October 1994; the fact that the solicitor had not in fact committed any breach in the way he dealt with his trust account in the matter of Mr. Smith and Dealterm Pty. Limited and the fact that he simply had nothing to gain by providing the Society with incorrect information in his letter of 20 October 1994 the Tribunal is of the view that the providing of the incorrect information was not intended to mislead the Society and it follows that it was not wilfully provided. In the circumstances the Tribunal dismisses the complaint. The Tribunal does not make any award for costs in favour of the solicitor. Dated the 15th day of December 1998. 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.