The Legal Services Tribunal of New South Wales CITATION : Peter Gerald Fitz-Gibbon [1996] NSWLST 14 PARTIES : Peter Gerald Fitz-Gibbon FILE NUMBER(S) : of 1995 CORAM: Mr A. Martin (Presiding Member) - Ms S. Hale - Ms L. Gain CATCHWORDS: Professional Misconduct - breach of s. 61 of the Legal Profession Act - Professional Misconduct - make false statement - Professional Misconduct - misappropriate trust moneys/moneys :- falsifying dates in mortgage documents to avoid the imposition of a stamp duty fine LEGISLATION CITED: Legal Profession Act 1987 CASES CITED: DATES OF HEARING: 7th August, 1996 EX TEMPORE 08/07/1996 JUDGMENT DATE : Mr Murdoch appeared for the Law Society of New South Wales LEGAL REPRESENTATIVES: Mr Fitz-Gibbon appeared in person JUDGMENT: Grounds for complaint alleged 21 wilful breaches of S.61 and 3 breaches of S.62 of the Legal Profession Act 1987, 21 counts of misappropriation, 16 counts of false statements in accounting documents and 2 counts of falsifying dates in documents to avoid imposition of stamp duty fines. Further allegation that solicitor contravened S.48B of the Legal Profession Act on three occasions and contravened Supreme Court Order restraining him from acting as a Solicitor or holding himself out as a person qualified to act as a solicitor – Solicitor informed Tribunal that he did not propose to offer any evidence, Tribunal nevertheless required to consider evidence – Amount requested from client in excess of duty payable – Excess concealed in statements showing an incorrect amount paid for duty – Solicitor customarily charged client inflated amount for enquiries – Accounting statements in files differed from those forwarded to client. Copies of statements sent to clients removed from files. Disbursements transferred from trust account usually exceeded disbursements finally billed – substitution of contract page showing false lower consideration to avoid payment of correct duty. Failure to deliver files to Receiver in accordance with Court Order. Letterhead implying that Solicitor held a practising certificate forwarded despite Supreme Court Order. Tribunal found grounds for complaint proved and Solicitor guilty of professional misconduct. The Complaint This Complaint was made by the Council of the Law Society of New South Wales ("the Law Society") against Peter Gerald Fitz-Gibbon ("the Solicitor") that he may be guilty of professional misconduct. The grounds for complaint allege wilful breaches of S. 61 (21 counts) and S. 62 (3 counts) of the Legal Profession Act, 1987 ("the Act"); misappropriation of trust monies (21 counts); the making of false statements in accounting documents issued to clients (16 counts) and falsifying dates in mortgage documents to avoid the imposition of a stamp duty fine (2 counts). In addition, it is alleged that the Solicitor contravened S. 48B of the Act on 3 occasions and contravened an order of the Supreme Court of New South Wales restraining him from acting as a Solicitor or holding himself out as a person qualified to act as a Solicitor. In the event that the allegations are made out the Law Society requested that the Solicitor's name be removed from the Roll of Legal Practitioners and that he be ordered to pay the costs of these proceedings. The Evidence At the commencement of the hearing the Solicitor, who appeared in person, informed the Tribunal that he was not proposing to offer any evidence and did not oppose the Law Society's application to remove his name from the Roll. Irrespective of this admission, it is well established that the Tribunal is required to consider the evidence put before it by the Law Society, make its own determination as to whether the evidence constitutes professional misconduct and then make orders in accordance with its findings. The evidence before the Tribunal consisted of a report dated 28th August, 1995 and a second report dated 15th December, 1995 prepared by Jean Sayer, Chartered Accountant, who had been appointed receiver to the trust property of the Solicitor on 31 August, 1995. These Reports were annexed to the Statutory Declaration of Garry James Still dated 10th April, 1996 which was admitted by consent as exhibit "A". Ms. Sayer also gave oral evidence. The Solicitor handled mostly conveyancing matters. He also acted for Legal & General in respect of mortgage advances made by that company and for clients referred to him by the company. It was pointed out by Ms. Sayer that her examination of files had been limited due to the fact of the inadequacy of the Solicitor's record keeping. As moneys generally do not pass through the Trust Account, there is no record in the accounting records of the conveyances and the Solicitor does not write up his general account. Random files were therefore selected by reference to a file register. There was no way of establishing whether in the matter concerned there was an incoming mortgagee or any of the features which relate to matters in which there could be irregularities. In relation to most conveyances, there were no moneys transacted through the trust account. Purchases were settled by cheques provided by the client or an incoming mortgagee drawn as directed by the Solicitor to be paid over on settlement. Similarly the settlement moneys in respect of sales were paid by cheques drawn direct to the recipients without passing through the trust account. The Solicitor requested clients to provide a bank cheque mostly payable to the Office of State Revenue for the purpose of paying stamp duty on the contract and transfer and sometimes on a mortgage. In a number of matters the amount of the cheque requested from the client was in excess of the appropriate stamp duty payable on the contract and transfer. In these cases there has been a failure to account by the Solicitor to the client concerned for the amount received in excess of the stamp duty paid which has been concealed in the statements issued to the clients which show an incorrect amount paid for stamp duty. The Solicitor used the services of Solicitors Urgent Enquiries Pty. Limited for government and statutory enquiries. The invoice in relation to each matter was generally in the instruction file. The Solicitor customarily charged the client near $100.00 more than the amount paid by him for these enquiries. In his Statements in respect of his costs, the Solicitor made reference to a scale fee based on the recommended Law Society scale. In most matters, the Solicitor, in respect of his profit costs, quoted the scale fee and then discounted this fee by a percentage ranging from 20 per cent to 40 per cent. He has continued to base his fee on this scale subsequent to July, 1995. In relation to matters referred to him by Legal & General the scale fee was generally reduced by 40 per cent. Almost without exception the scale fee quoted is generally at least $100 more than the actual prescribed scale fee. In most cases while the end result of the discounted fee was less than the scale fee it had not been calculated on the basis indicated in the bill being the correct scale fee reduced by the percentage expressed therein. The Statement of moneys received and disbursed addressed to the client contained in the Solicitor's files was not the same as the Statement forwarded to the client showing an excess amount paid for stamp duty. The Statements placed in the files showed the correct amount of stamp duty paid and the resulting credit offset by an increase in the Solicitor's legal costs. The copies of the Statements sent to the clients had been removed from the files. In the instances where stamp duty received from the client was deposited to the trust account the Solicitor drew a trust cheque payable to the office of State Revenue for the correct amount of stamp duty and the balance drawn by him was described as "on account of disbursements". The position is that almost without exception the amount transferred at that time exceeded the disbursements finally billed when the matter was settled. There are several instances where the Solicitor charged the clients in his Statement stamp duty on their mortgage which was either paid by them direct to the lender or was debited to their account by the bank or society advancing the funds. In some cases the net proceeds of the mortgage after deduction of the costs, including the stamp duty, were paid to the Solicitor on settlement. In these circumstances, there was also a failure to account by the Solicitor which was concealed in the statement issued to the client. In three instances where the Solicitor acted for a purchaser, page I of the exchanged contract for sale had been removed and another substituted in its place. In two of those cases, the consideration on the substituted page had been reduced resulting in the payment of a lesser amount of stamp duty than that applicable on the correct consideration. The additional moneys paid by the client and held by the Solicitor to cover the proper stamp duty payable was used by the Solicitor for his own purposes. Following the appointment of Ms. Sayer as Receiver and the cancelling of the Solicitor's practising certificate, the Solicitor continued to deal with files and act as a Solicitor. On 20th September, 1995, an order was made by the Supreme Court of New South Wales that the Solicitor deliver to Ms. Sayer all instruction files relative to the practice of Fitz-Gibbon. The Solicitor failed to deliver all files in accordance with the Court Order and in fact destroyed many of them. On 26th October, 1995 a further order was made by the Supreme Court of New South Wales restraining the Solicitor from acting as a Solicitor or holding himself out as a person qualified to act as a solicitor. This Order was sought by Ms. Sayer following information received by her that the Solicitor continued to hold himself out as qualified to practise as a Solicitor. Despite the Orders made by the Court on 26th October, 1995 the Solicitor continued to write letters relative to his practice on letterhead implying that he held a current practising certificate. Determination and orders Having regard to all of the evidence and the Solicitor's admissions, the Tribunal finds each of the grounds of the Complaint proved and the Solicitor guilty of professional misconduct on each count. Costs The Tribunal is satisfied that the sum of $4,500.00 as assessed by the Law Society is reasonable in all the circumstances. The Tribunal therefore orders: 1. That the name of Peter Gerald Fitz-Gibbon be removed from the Roll of Legal Practitioners in New South Wales. 2. That the Solicitor pay the costs of the Law Society, determined by the Tribunal in the sum of $4,500.00. 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