The Legal Services Tribunal of New South Wales CITATION : John David Kilrea Sloan [1995] NSWLST 5 PARTIES : John David Kilrea Sloan FILE NUMBER(S) : of 1994 CORAM: Mr D E Hunt (Presiding Member) - Ms A Plotke - Mr D. Hughes CATCHWORDS: Clerk misappropriated funds from employer's trust account - Professional Misconduct - mislead Court/Tribunal - Professional Misconduct - mislead Law Society/Bar Association/LSC :- wilful breaches of Section 61 & 62 of the Legal Profession Act 1987 participation in a fraud on a Credit Union failure to adequately supervise clerk LEGISLATION CITED: Legal Profession Act 1987 CASES CITED: DATES OF HEARING: 26 April and 1,2,3,4 May 1995 DATE OF JUDGMENT: 05/15/1995 LEGAL REPRESENTATIVES: Mr I. Wales appeared for the Law Society of New South Wales instructed by Mr G.J. Still.. Mr J.L. Glissan QC with Mr R.N. Gye appeared for the Solicitor instructed by Messrs Browne & Partners JUDGMENT: Allegations of wilful breaches of Section 61 & 62 of the Legal Profession Act 1987 participation in a fraud on a Credit Union; failure to adequately supervise clerk in respect to the issuing of receipts for money and the banking of money at his office; hindering and obstructing the Society's Investigator in the exercise of his function; endeavouring to mislead the Law Society; endeavouring to mislead the Legal Services Tribunal; swearing a declaration knowing its contents to be false/and or misleading; sharing receipts with a person not the holder of a current practising certificate; that through his Counsel, in answer to a Notice to Attend and Produce Documents, the Solicitor produced to the Tribunal certain documents which he deliberately altered. Tribunal finds all allegations proven and Orders that the Solicitor's name be removed from the Roll. THIS MATTER CAME BEFORE THE LEGAL SERVICES TRIBUNAL pursuant to a Complaint dated 2 June 1994 filed by the Council of Law Society of New South Wales (the Law Society) referring a complaint of Messrs Vandeness & Scott on behalf of Kyung Chol Kim (Mr Kim) dated 27 October 1992 concerning John David Kilrea Sloan pursuant to Section 134(1(c)) of the Legal Profession Act 1987. The Complaint involved the following questions of professional misconduct: 1. the Solicitor wilfully contravened the Section 61 of the Legal Profession Act 1987. 2. the Solicitor wilfully contravened the Section 62 of the Legal Profession Act 1987. In the Complaint the Law Society further complained under Section 135 of the Legal Profession Act 1987 that: 1. the Solicitor participated in a fraud upon the SWB Credit Union. 2. the Solicitor failed adequately to supervise his clerk, Annette Kleiner, in respect to the issues of receipts for money and banking of money received at his office. 3. the Solicitor hindered and obstructed the Society's investigator, Mr G. Napper, in the exercise of his functions. The Law Society requested the making of the following orders: 1. such order as appropriate 2. John David Kilrea Sloan pay the costs of the complainant of this proceedings. The matter was mentioned before the Legal Profession Disciplinary Tribunal on 19 July 1994 and it was stood over for further mention to 25 August 1994 as the Solicitor was then in Russia. Thereafter various mentions were heard either before the Registrar or the Tribunal until 14 December 1994 when it was fixed for the hearing for 20 to 23 of March 1995. On 10 March 1995 the matter was listed before the President of the Legal Services Tribunal (the Tribunal), when the Law Society filed an Information disclosing additional grounds of complaint as follows: 1. the Solicitor endeavoured to mislead the Law Society. 2. the Solicitor endeavoured to mislead the Legal Services Tribunal. 3. the Solicitor swore a declaration knowing its contents to be false and/or misleading. 4. the Solicitor shared the receipts of his business, without the consent of the Law Society, with Albert Ghassibe, a person who at all material times did not hold a current practising certificate. In this Information the Law Society requested the following orders: 1. that the name of the Solicitor be removed from the Roll of Legal Practitioners 2. that the Solicitor pay the costs of the Law Society of New South Wales of and incidental to the hearing of this Information. On 16 March 1995 the matter was again listed before the Tribunal when the Solicitor requested that the hearing dates from 20 to 23 of March 1995 be vacated and the Tribunal fixed the matter for hearing for five days from 1 to 5 May 1995. On 20 March 1995 the matter was listed before the Acting Registrar when the Solicitor produced certain documents in answer to the notice to attend and produce documents and the matter was again listed before the Acting Registrar on 31 March 1995 when the hearing was listed to commence before the Tribunal on Wednesday 26 April 1995 in order to take the evidence of the witness Annette Kleiner who was leaving for another State prior to travelling overseas on theatrical commitments. At the commencement of the hearing on 26 April 1995 the Tribunal ordered that the proceedings be heard under the new Part 10 of the Legal Profession Act 1987 (the Act). Pursuant to clause 30 of the Legal Profession Regulation 1994, Part 9 Division 2 Complaints and Appeals it is provided inter alia that "A matter that has been referred under former Part 10 of the Act to the former Board or former Tribunal by a Council, but has not, by 1 July 1994, been the subject of proceedings before the former Board or former Tribunal, is taken to be a matter referred to the new Tribunal under new Part 10 of the Act." It should be stated that this Tribunal has determined in the matter of Kriss that the expression "subject to proceedings" means that there has not been a hearing on the merits and accordingly the Legal Services Tribunal is entitled to proceed and hear the matter under new Part 10. The matter proceeded on 26 April 1995 when Miss Kleiner's evidence was taken and the hearing continued on 1 May 1995 and 2 May 1995 when the Law Society's case was completed. The matter then continued on 3 May 1995 when Mr Sloan tendered a lengthy statutory declaration dated 21 April 1995 which became Exhibit 5 in the proceedings. At 4 o'clock on 3 May 1995 the Solicitor was still being cross-examined on the contents of this declaration when the matter was adjourned until 10 a.m. on 4 May 1995. When the matter was called on at 10 a.m. on 4 May 1995 Mr Glissan QC who appeared for the Solicitor announced that he had spoken to Mr Sloan who advised him that he would not be at the Tribunal rooms until 12 o'clock and Mr Glissan informed the Tribunal that in a subsequent telephone conversation Mr Sloan told him he had been ill and was seeing a doctor and was unable to give him further instructions in the matter. On that basis the Tribunal adjourned the case until 12 o'clock or earlier but in the meantime dealt with an application that had been made on behalf of Mr Kim who was seeking leave to make a request for a compensation order against the Solicitor. At 11.30 a.m. on 4 May 1995 the hearing resumed when Mr Glissan informed the Tribunal as follows: "I'm instructed to make no admissions but to formally withdraw the evidence filed on his behalf to make no further admissions and to permit the Tribunal to make such orders as it regards as appropriate in the circumstances." As appears from the transcript (281) Mr Glissan announced that his retainer had been terminated after the announcement that he made to the Tribunal and he was given leave to withdraw. The Tribunal then heard submissions from Mr Wales who appeared for the Law Society and at the conclusion of the submissions reserved its decision. The Tribunal now makes its findings on the basis of evidence before it and will make orders accordingly. It is proposed to deal with the Complaint dated 2 June 1994 and then deal with the Information dated 10 March 1995. Complaint dated 2 June 1994 filed 21 June 1994 1. The Solicitor wilfully contravened Section 61 of the Legal Profession Act 1987 In particulars filed with this Complaint it is alleged that the Solicitor acted for Mr Kyung Chol Kim (also known as Mr Albert Kim) and that Mr Kim paid certain monies to the Solicitor or his clerk Ms Annette Kleiner (Ms Kleiner) and that he failed to pay these monies into his trust account or to deliver to the client an outline bill in respect of these monies. The amounts paid by Mr Kim are set out in the particulars as follows: (a) Receipt No W0333 dated 12 June 1992$2,500.00 (b) Receipt No 46025 dated 23 June 1992$3,800.00 (c) Receipt No 46026 dated 23 June 1992$1,700.00 (d) Receipt No W0333 dated 12 June 1992$2,500.00 (e) Receipt No 46027 dated 24 June 1992$5,000.00 (f) Proceeds cheque SWB Community Credit Union Limited dated 26 June 1992$9,000.00 (g) Receipt No 46034 dated 7 August 1992$5,000.00 (h) Receipt No 46036 dated 14 August 1992$23,000.00 (i) Receipt No 46038 dated 20 August 1992$6,000.00 (j) Receipt No 46041 dated 3 September 1992$2,000.00 The evidence in support of this particular is from Ms Kleiner who filed a statutory declaration dated 8 March 1995 (Exhibit F). In that statutory declaration she stated that the receipts came from a receipt book which she obtained from Mr Sloan's office and they were stamped with the words "J.D.K. Sloan & Co Solicitors and Attorneys" and that she used this receipt book both for Mr Kim's transactions and for Mr Sloan's other clients. She was shown a copy of receipt no. 00333 dated 12 June 1992 and she stated that she recognised the signature as that of Mr Sloan. She was shown receipts numbered 46025, 46026, 46027, 46034, 46036, 46038 and 46041 and stated that the signatures on those receipts were hers. All the receipts referred to were issued in the name of Mr Kim and the copies of these receipts are annexed to Mr Kim's statutory declaration dated 7 December 1994 (Exhibit Q). Apart from the receipt no. W0333 which was signed by Mr Sloan all the other receipts are signed by Ms Kleiner. In respect of receipt no. 46036 dated 14 August 1992 for $23,000.00 Ms Kleiner's evidence is that this receipt was a catch up or consolidated receipt for monies which Mr Kim had previously paid and that she did not receive the amount of $23,000.00 when she wrote out this receipt. As will appear later in this document, Mr Albert Ghassibe (Mr Ghassibe), occupied a room within the offices of Sloan and Co. at the first floor 366 Chapel Rd Bankstown from about the end of 1990 or early 1991 until the latter part of 1992 and Ms Kleiner said he was working on immigration matters for the Solicitor. She gave evidence that Mr Ghassibe wrote out draft letters in long hand which he asked her to type up on the letterhead of Sloan & Co and these typed up letters were then given to Mr Sloan who made alterations to them in his own handwriting. Attached to her statutory declaration were the copies of draft letters in Mr Ghassibe's handwriting and the copies of the typed up letters on Mr Sloan's letterhead and she identified the corrections on these typed up letters as being in Mr Sloan's handwriting. Ms Kleiner gave evidence that ordinarily she did not handle the funds to which the receipts related but she recalls on one occasion she counted the money which Mr Kim provided and on other occasion she observed a quantity of money in the possession of Mr Kim or Mr Ghassibe. Although it is not absolutely clear it seems that on most occasions Mr Kim gave money in cash to Mr Ghassibe and Ms Kleiner gave evidence that she observed Mr Ghassibe take the cash into Mr Sloan's office and on other occasions he did not do so. She also stated that on a number of occasions when she gave clients receipts for money they had given her for conveyancing fees and disbursements and payments of accounts she passed these amounts to Mr Sloan. In answer to a question from a member of the Tribunal Ms Kleiner stated there was a trust account receipt book in the office but she did not ever use it. She also stated that she was not ever given any instructions to use the trust account receipt book and that she did not use the trust account receipt book. Furthermore she stated that she did not do any of the banking for the office. Apart from the cheque for $9,000 from SWB Community Credit Union Ltd all the other amounts received by Mr Sloan in respect of which receipts were issued to Mr Kim either by Mr Sloan or Ms Kleiner were paid in cash and there is no evidence that they were paid into a trust account nor is there any evidence that the Solicitor delivered the client an outline bill or any bill at all. Mr Kim in his statutory declaration dated 7 December 1994 (Exhibit Q) gave evidence that he instructed Mr Sloan to act for him in an application for permanent residency and paid him $1500 for his costs. He also gave evidence that in June of 1992 he asked Mr Sloan to act for his former de facto wife Nam Jin Kim (also known as Rosemary Kim) and referred to in the proceedings as Mrs Kim. According to Mr Kim, Mr Sloan said that he could not act for both Mr Kim and Mrs Kim and arranged for a legal friend Mr Gary Penhall to act for Mrs Kim. Mr Sloan said to Mr Kim "We want the money first" and Mr Kim replied "I need time to get money" and Mr Sloan said "We want $23,000 you must bring cash" and Mr Kim said "Give me some time". Mr Kim gave evidence of payments of the amounts referred in the particulars in respect of which receipts were issued by Mr Sloan as to $2500 and Miss Kleiner as to the others. All payments were made in cash except the $9000 cheque on 26 June 1992. There is no evidence that the Solicitor ever delivered an outline bill or any bill except in relation to receipt no. WO333 dated 12 June 1992 for $2500. The Solicitor attached to his letter of 21 December 1992 to the Law Society (Exhibit D) a copy of his letter dated 11 June 1992 addressed to Ms Rosemary Kim enclosing a memorandum of fees in the sum of $2500 and although the memorandum is undated there is also attached a memorandum of fees due to James A. Kearney barrister dated 12 June 1992 for the sum of $500 and a receipt signed by Mr Kearney of the same date. Accordingly apart from this account the Tribunal makes a finding that the Solicitor did not deliver any bills of costs in respect of receipts no. 46025 dated 23 June 1992, 46026 dated 23 June 1992, 46027 dated 24 June 1992 and proceeds of cheque from SWB Community Credit Union Ltd dated 26 June 1992, 46034 dated 7 August 1992, 46036 dated 14 August 1992, 46038 dated 20 August 1992, and 46041 dated 3 September 1992. Apart from the $23,000 covered by receipt no. 46036 dated 14 August 1992 the Tribunal finds that the Solicitor received the cheque for $9000 and the other amounts in cash from Mr Kim, but he failed to pay these monies into his trust account and accordingly there was a wilful breach of Section 61 of Legal Profession Act 1987. 2. The Solicitor wilfully contravened Section 62 of Legal Profession Act 1987 The allegation is that the Solicitor did not keep accounting records to disclose the true position in relation to the said monies and it follows from the findings made above that the Tribunal also finds that the Solicitor wilfully breached Section 62 of the Act. Further particulars of complaint 1. The Solicitor participated in the fraud upon the SBW Community Credit Union Mr Kim's evidence contained in paragraphs 20 to 26 of his declaration is that Mr Sloan referred him to Mr Montgomery of Financial Planning and Investment Services Pty Ltd to organise a loan for him. When he told Mr Sloan that Mr Montgomery could not assist him because he had no job Mr Sloan replied "No worries, I can get you a job. My friend has a security business, his name is Kamahl, use his company name on the application and you can get a loan." Annexed to Mr Kim's declaration is his application to the SWB Community Credit Union Limited which shows his occupation as a security officer and the name of his employer as Ahmsco Security which is the name under which Mr Kamahl Masri carried on business. On or about 26 June 1992 Mr Kim obtained a cheque for $9,000 made payable to John Sloan from the SWB Community Credit Union Limited and he declares at the same time Mr Montgomery was given a cheque in the sum of $1000. Copies of both cheques are annexed to Mr Kim's declaration. Mr Kim took the cheque to Mr Sloan's office and Mr Sloan wrote out a receipt on the photostat copy of the cheque, signed the receipt and dated it 26 June 1992. Although there is no direct evidence that the person Kamahl ran the Ahmsco Security Mr Kim was not cross-examined on this aspect of his declaration and the Tribunal finds that he was not employed by the Ahmsco Security and that Mr Sloan organised the deception on the Credit Union and participated in the fraud upon the SWB Community Credit Union. 2. The Solicitor failed adequately to supervise his clerk, Annette Kleiner, in respect of issuing of receipts for money and banking of the money received at his office In the particulars given in respect of this allegation the Law Society refers to the following receipts. (a) Receipt No 46025 dated 23 June 1992$3800.00 (b) Receipt No 46026 dated 23 June 1992$1700.00 (c) Receipt No 46034 dated 7 August 1992$5000.00 (d) Receipt No 46036 dated 14 August 1992$23000.00 (e) Receipt No 46038 dated 20 August 1992$6000.00 (f) Receipt No 46041 dated 3 September 1992$2000.00 Ms Kleiner's evidence has already been referred to in which she stated that she was never instructed to use the trust account receipt book and that the receipts she issued were written out on a receipt book which she obtained from Mr Sloan's room. Ms Kleiner also said that she used this receipt book for Mr Sloan's clients other than Mr Kim and the Tribunal has no difficulty in finding that the Solicitor failed adequately to supervise his clerk in respect of issuing of receipts for money but dismisses the allegation that he failed to supervise his clerk in the banking of the money as the evidence is that the Solicitor did his own banking. 3. The Solicitor hindered and obstructed the Society's investigator Mr G. Napper in the exercise of his functions On 9 November 1992 Mr Gary Napper Trust Account inspector attended upon Mr Sloan at his office pursuant to a direction or authorisation dated 6 November 1992 signed by Mr Mitchell, Chief Trust Account Inspector. This inspection took place pursuant to Section 55 of the Act and there was in evidence( Exhibit AH) a copy of a minute of the Council of the Law Society dated 18 October 1990 resolving to appoint certain persons as trust account inspectors pursuant to the Act. Mr Napper had a discussion with Mr Sloan concerning monies paid by Mr and Mrs Kim when the Solicitor acknowledged that Mr Kim borrowed money from the Credit Union "to get her out. That was the $10,000 it went straight to Immigration". When shown the receipts referred to in the Further Particulars of the Complaint, Mr Sloan stated that the amount of $2500 covered by the receipt no. WO333 was the amount he received and that the sums of $9000 and $1000 were the amounts he paid to the Immigration. He was also shown a copy of an agreement dated 10 August 1992 between John Sloan and Kyung Chol Kim (Mr Kim) signed by John Sloan and Kyung Chol Kim and he was asked "This agreement indicates that she was to pay $35,000 to you for the matter" Mr Sloan replied "What, she - This agreement is with Mr Kim" Mr Napper said "I'm sorry it indicates that he was to pay you $35,000" Mr Sloan said "That was never acted upon" Mr Napper "So it was never paid" Mr Sloan "Yes nothing was". When Mr Sloan was asked to produce his office records he replied "These are my personal records. I'm not going to disclose them to anyone. It's like my tax return, I wouldn't show that to you either" Mr Napper then stated "I wouldn't want to see it. The notice which you took a copy of this morning relates to your affairs and I believe it includes your office account records" Mr Sloan replied "I don't believe the Law Society has the right to look at my personal records like this. It's unfair. Someone makes a complaint and straight away you want to look at their personal records. I think the Law Society should call in the complainant and interview them first and get them to substantiate their case." In answer to a further question from Mr Napper Mr Sloan replied "Looking at my records would not satisfy you because the money was received in cash and if I was going to knock it off I certainly wouldn't put it in my office account. Will the Law Society dig up my backyard?" In the course of his discussion with Mr Napper he was asked where the receipt book was which was used by Ms Kleiner and he replied "I have locked it away. This will be a police matter and I don't want it to get lost or destroyed." When Mr Sloan was asked whether he would permit his secretary Annette (Kleiner) to be interviewed he said "I want to deal with it this way. I will deliver to the Law Society within 7 days, a stat. dec. from Annette, my explanation of the matter and copies of the receipts you asked for." Mr Napper said "I'm not going to argue with you but I can see no reason why I can't deal with these matters here and now. You mentioned you had obtained a statement from Annette could I have a copy of it." Mr Sloan replied "No, I'd rather do it by stat.dec. You can speak with her then, that is if she will talk to you." In paragraph 6 of Mr Napper's statutory declaration (Exhibit V) he stated that in the course of his inspection he examined the Solicitor's trust records and satisfied himself that neither the $2500 referred to in receipt no. WO333 nor the $9000 Credit Union cheque payable to the Solicitor had been deposited to the Solicitor's trust account. Mr Napper was not required for cross-examination on his statutory declaration and on the basis of his evidence the Tribunal finds the complaint established and that the Solicitor hindered and obstructed the Society's investigator in the exercise of his functions. Having found the questions in the Complaint and the Particulars of the Further Complaint established against the Solicitor the Tribunal is satisfied that the Solicitor was guilty of professional misconduct in respect of all these matters. Information dated 10 March 1995 The Information disclosing a complaint of professional misconduct filed on 10 March 1995 with the Legal Services Tribunal as matter no. 1 of 1995 was heard concurrently with the Complaint and the grounds are now dealt with seriatim: The information was amended during the hearing to include allegations that the Solicitor had deliberately altered his copy cheque stubs which he produced to the Tribunal on 20 March 1995. The amended Information became Exhibit Y. 1. The Solicitor endeavoured to mislead the Law Society A. The allegation is that the Solicitor wrote a letter to the Law Society dated 21 December 1992 the relevant part of which is set out hereunder. "As to the `SWB Community Credit Union Ltd' cheque for $1,000.00 dated 26th June 1992, I have no knowledge of same. As to the cheque for $9,000.00 received by me, the background to this matter is as follows. Albert Ghassibe wanted his paramour Rosemary Kim out of the Detention Centre. On late Friday 26th June 1992, Albert Ghassibe attended my office with a cheque of $9,000.00 endorsed to `John Sloan' and I said to Albert Ghassibe that he well understood it had to be endorsed to the Department of Immigration and not to me. At this stage, the bond had also been reduced from $10,000.00 to $5,000.00. Albert Ghassibe then said words to the effect `take the cheque [the $9,000.00 cheque] and give me a cheque for $5,000.00 for the Department so I can get Rosemary out and you keep the balance $4,000.00 as I still owe you money for my costs for the last trial'. The cheque was then photocopied and the receipt endorsed on the photocopy and given to Albert Ghassibe. "Simultaneous with accepting the Credit Union cheque I wrote out a personal cheque [cheque number 665913 dated 26th June 1992] endorsed to the Department of Immigration and gave this cheque to Albert Ghassibe [with the direction that a bank cheque be drawn against my personal cheque] who departed to go to the bank and the Department of Immigration to arrange the release of Rosemary Kim. At the time of handing over the cheque, I told Albert Ghassibe that my name was not to go on any forms as supplying the bond money as I was only helping out as a "money changer" in the situation and not supplying any part of the bond money. Albert Ghassibe said words to the effect `Don't worry, I'll hand it in and get the receipt in my name'." The evidence is that Mr Kim obtained the cheque for $9,000 from the SWB Community Credit Union Ltd and handed this cheque to the Solicitor on 26 June 1992 and he receipted a photostat copy of that cheque. There is no evidence and the Tribunal specifically finds that Mr Ghassibe had nothing to do with this cheque so that the version set out in the extract from the letter above is false. Furthermore in Exhibit AA which is a grey folder containing the extracts from the Department of Immigration files and identified in that folder after divider 13 as document 210 is a receipt in the name of Kamal Masri for $5,000 cheque 787855 NAB Bankstown and identified as "pc-bank cheque for release of Nam Jin Kim" receipt no. 2592248. Mr Kim's evidence is that when he gave the $9,000 cheque to Mr Sloan, Mr Sloan made a telephone call to a person called "Kamahl" and said words to the effect "I'll give you $5,000 and then you've got to go to Immigration Department to pay the bond money for the release of Rosemary Kim". It is common ground that Kamahl is the person known as Kamal Masri the name shown on the Department of Immigration receipt. The Tribunal does not know and cannot speculate why Mr Sloan did not provide the bond money in the name of the person who gave it to him, namely Mr Kim but arranged for "Kamahl" Masri to have his name shown as the person providing the bond money. However, it is crystal clear that Mr Sloan's version of the payment of the bond money for Mrs Kim set out above is a tissue of lies and the Tribunal finds that this account is false. B. At page 2 of the letter dated 21 December 1992 the Solicitor said "as to receipts 46025 (23 June 1992 - $3,800), 46026 (23 June 1992 - $1,700), 46027 (24 June 1992 - $5,000) I had no knowledge until mid October 1992 that these amounts had been purportedly paid to this office or receipts issued - in fact I had no knowledge that such a "receipt book" existed until mid October 1992 and note that the "receipt book" in question was set up without my authorisation." On page 3 of the Solicitor's letter to the Law Society dated 21 December 1992 the following appears "as to receipts 46034 (7 August 1992 - $5,000), 46036 (14 August 1992 - $23,000), 46038 (20 August 1992 - $6,000) and receipts 46041 ( 3 September 1992 - $2,000), I had no knowledge until mid 1992 that these amounts were purportedly paid to this office or receipts issued. As stated previously, I had no knowledge of the existence of even the `receipt book'." It is alleged that both the statements made by the Solicitor in his letter of 21 December 1992 were false and that the Solicitor was aware of these matters before mid October 1992. Ms Kleiner's evidence (Exhibit F para 21) is that she obtained the receipt book from Mr Sloan's room and that apart from Mr Kim's transaction she used the receipt book for Mr Sloan's clients. She said that on a number of occasions when she passed on to Mr Sloan money given to her by the clients Mr Sloan said to her "Did you give them a receipt" to which she replied "yes". Exhibit AE which is a copy of the receipt book covering the relevant period and including the receipts referred to in the Solicitor's letter, contains many receipts for legal matters for instance the receipt 46001 is for legal fees (barrister) for $95, 46007 legal fee $800, 46012 Fattar refugee application $1000, 46031 John Montgomery Survey report $400 which all clearly indicate that the receipt book was used as a part of the Solicitor's running of his practice. These receipts are dated from 12 March 1991 to 7 September 1992 and give lie to the Solicitor's assertion that he knew nothing about the receipt book until mid October 1992. The Tribunal therefore finds that the Solicitor's statements in his letter of 21 December 1992 to the Law Society were false. C. In paragraph 6b of the letter of 21 December 1992 to the Law Society the Solicitor stated "At all material times, Albert Ghassibe was a client and his trial was listed for 14 September 1992. He was allowed on the premises to do his own examination of the evidence to be presented against him. The evidence was so voluminous that, if it had been stored in filing cabinets, it would have occupied some 8 drawers. His `role' so termed, was that of a solicitor/client relationship." The Law Society alleges that these statements were false and that Mr Ghassibe was permitted by the Solicitor to hold himself out as an employee of the Solicitor's practice and attended to the matters of the clients with the Solicitor's consent. In Mr Kim's declaration (Exhibit Q at para 19) he said he saw Mr Sloan and showed him the receipts which he had been given that morning that is 24 June 1992 in respect of which he had given Mr Ghassibe $5,000 and Ms Kleiner had issued the receipt. He said to Mr Sloan "What's happening to my former wife" he said "We can win this case. We are the professionals". Ms Kleiner in her declaration (Exhibit F) says that Mr Ghassibe attended the practice regularly during the latter part of 1992 for a substantial part of each working day and during his time in the office he worked on immigration matters. The Tribunal has already referred to the fact that Mr Ghassibe drafted the letters in immigration matters which Ms Kliener typed on to Mr Sloan's letterhead and which Mr Sloan subsequently corrected before they were sent out. Furthermore Mr Ghassibe in his declaration declared 16 February 1993 (Exhibit T) said that when Mr Sloan moved his practice to Bankstown he said to him "Why don't you work here, at Bankstown (there is an office out the back)". "I (Ghassibe) agreed to this on condition I receive 50 per cent of fees on immigration matters where I introduce the client. All fees were receipted by either John Sloan or his secretary, Annette. John Sloan always paid me by cash. I estimate that there were 30-40 clients in the above-mentioned category for which Sloan did all the legal work. Annette, John Sloan's secretary, typed letters for me on John Sloan's letterhead with his knowledge." The letters which are in evidence show the words "yours faithfully Sloan & Co Albert Ghassibe" and "yours faithfully Albert Ghassibe for Sloan & Co." It is noted that in Exhibit H(1), which is the transcript of the interview between Mr Gillett a trust account inspector from the Law Society and Ms Kleiner, there is specific reference to Mr Ghassibe handling other immigration matters in addition to Mr Kim and Ms Kleiner refers to the clients Fattah, Habad, Gavat and Regina Leung. In Exhibit AE which are the copies of the receipts signed by Ms Kleiner viz receipt no. 46012 is issued in favour of Hatem Fattah for $1000 refugee application, receipt no. 46018 is issued to Gavat legal fees $4000 and receipt no. 46030 is issued in favour of Regina Leung consultation fees for $1830. It is also noted that in respect of receipt no. 46030 issued to Regina Leung in the sum of $1830 dated 17 July 1992 and receipt no. 46031 dated 23 July 1992 issued to John Montgomery for survey report Hamad $400, these two amounts were banked into the Solicitor's general account at the National Australia Bank Burwood on 28 July 1992. On this evidence the Tribunal finds that Mr Ghassibe was closely involved with the Solicitor's practice, as he says he was, and rejects the Solicitor's assertion that he was only at the office preparing his own case. There can be no doubt that Mr Ghassibe was working in Mr Sloan's office with his approval and the Tribunal accepts that he was receiving a portion of the fees that came in on immigration matters. When Mr Sloan stated in his letter of 21 December 1992 in answer to a question from the Law Society that "it appears Albert Ghassibe may have held himself out as an immigration consultant" and when the Solicitor answered in the negative the question "Was there any business relationship between Mr Ghassibe and yourself" and "Did Mr Ghassibe undertake tasks on your behalf" and "Were any authorisations given to Mr Ghassibe to I. receipt of funds on your behalf, II. advise yours clients, III. act in any capacity on behalf of Sloan & Co, IV. give directions to staff employed by Sloan & Co, V. was he an employee, if so from when to when", these answers were false and the Tribunal so finds. 2. The Solicitor endeavoured to mislead the Legal Services Tribunal On 21 February 1995 the Solicitor filed a statutory declaration of the same date with the Tribunal in which he denied that Albert Ghassibe was ever employed by him and asserted that Mr Ghassibe was allowed to attend a new, empty room at his office at Bankstown to prepare his defence in criminal proceedings against him for possession and sale of heroin. The Law Society asserts that these statements were false. This statutory declaration was tendered by the Law Society and is Exhibit AC. In view of the Tribunal's findings in relation to further particulars 1C concerning Mr Ghassibe the Tribunal finds as a matter of course it follows that the Solicitor also endeavoured to mislead the Legal Services Tribunal when he asserted that Mr Ghassibe was never employed by him. 3. The Law Society alleges that the Solicitor swore a declaration that is the declaration dated 21 February 1995 knowing its contents to be false and/or misleading In view of the Tribunal's findings in relation to Mr Ghassibe the Tribunal also finds that the Solicitor swore a false declaration. 4. The Law Society alleges that the Solicitor shared the receipts of his business, without the consent of the Law Society, with Albert Ghassibe, a person who at all material times did not hold a current practising certificate The evidence in support of this allegation is contained in Mr Ghassibe's statutory declaration (Exhibit T). In addition Mr Ghassibe (transcript 140) was cross-examined in relation to fees in immigration matters and his evidence was "he (Sloan) said `there is an office in the back, if you move down here you can work from there'. I can use his letterheads. He asked how much I charged a client for an immigration matter I said $1500 so he would get $750 and I would get $750." Q. Would you tell us what he said about $1500? A. He asked me how much I would charge for a client and I said $1500, so he would get $750. Q. What did he say to you about the $750? A. We go half/half. Q. When did this conversation take place? A. After he moved to Bankstown. And then later in the transcript Q. Subsequently did money change hands between yourself and Mr Sloan in relation to what you understood to be that agreement? A. Well most of the money goes to Annette or Mr Sloan himself and then I get my money off him. Q. To which money are you referring? A. Immigration fees. Q. From whom? A. That related to immigration matters from a client. And then later in the transcript (141) Q. Did you observe anything yourself in relation to monies paid to Ms Kleiner? A. Well Mr Sloan Q. What did you observe? A. I observed that the money landed with Mr Sloan on the end it goes to him. Q. Did you see Ms Kleiner do anything with the money? A. She put it in the drawer next to her if Mr Sloan isn't there and if he is there, when finished with a client or whatever she walks in and hands it to him. I have seen that on many occasions. Q. Did Mr Sloan give you money in respect of immigration matters? A. Yes he has. Q. On how many occasions when you were at Bankstown office did he give you the money? A. A number of occasions Q. 1 or 50 or what? A. I mean each time we see a client the money goes to him then $750 comes to me so I can't tell you exactly I would say about 20 occasions." The Tribunal accepts this evidence of Mr Ghassibe and it is of the opinion that the Solicitor shared the receipts of business, in respect of immigration matters being introduced by Mr Ghassibe with Mr Ghassibe without the consent of Law Society and that Mr Ghassibe did not hold a current practising certificate. 5. It is alleged by the Law Society that the Solicitor through his counsel on 20 March 1995 in answer to a notice to attend and produce documents, produced to the Legal Services Tribunal certain documents which he deliberately altered (a) copy general cheque stub no. 665806; (b) copy general cheque stub no. 665860; (c) copy general cheque stub no. 665913; and (d) copy general cheque stub no. 665936. There is no dispute that on 20 March 1995 the Solicitor through his counsel produced to the Tribunal before Acting Registrar P. Gould a copy of his cheque book butts from 20 March 1992 to 21 September 1992 which became Exhibit L in these proceedings and have been referred to as the "Sloan copy". Ms Kleiner during the course of her evidence identified a copy of the same cheque butts which became Exhibit K and have been referred to as the "Kleiner copy". In the Sloan copy cheque butt no. 665806 dated 20 March 1992 has the following entry: payee "cash" a blank line underneath and, the word "Campbell" and the amount of the cheque is for $15000. The Kleiner copy of cheque no. 665806 has payee "cash" underneath the word "Masri" and underneath the word Campbell. In other words the word Masri does not appear on the Sloan copy. On the Sloan copy cheque no. 665860 dated 6/5/1992 appears payee cash and nothing else except the amount of the cheque of $9500 whereas on the Kleiner copy after the word "cash" and a blank line appears the word "Kamal". In the Sloan copy cheque no. 665913 dated 26/6/1992 appears payee "collector of public monies Dilgea" and underneath the word "(Rosemary)" and on the next line the word "Bond" and the amount of the cheque is for $5000. On the Kleiner copy the words (Rosemary) and "Bond" do not appear but the words "(K. Masri)". In the Sloan copy cheque no. 665936 dated 20/7/92 appears payee "cash" and the amount of cheque $7000 whereas in the Kleiner copy the word "Kamal" appears on the line after "cash". In his solicitors' letter dated 12 April 1995 (Exh N) which was sent by facsimile transmission to the Law Society the Solicitor's explanation in respect of each of these cheques is as follows: Cheque no. 665806 "Mr Sloan added `Masri' after he had initially handed the documents to the Law Society, when he was reviewing the payments and the corresponding entries made on the cheque butts." Cheque no. 665860 "Mr Sloan added the word `Kamal' after he initially handed the documents to the Society, when he was reviewing the entries made on the cheque butts and trying to reconcile the payments made from the cheque book." Cheque no. 665913 "Mr Sloan amended the cheque butt entry to `Rosemary Bond' before he initially handed the documents to the Society as he believed that the entry referred to K. Masri did not accurately reflect the true situation". Cheque no. 665936 "Mr Sloan added `Kamal' after he initially handed the documents to the Society. He did so for the same reasons as relates to cheques numbered 665806, 665860." In cross-examination (Transcript 235) the Solicitor stated that what he said in this letter was not entirely correct because he had not altered the cheque butts but a photocopy of them. In further cross-examination he said that he and Ms Kleiner made only two copies of his cheque butts and that on one photocopy he altered the payment on the cheque butt of 26 June 1992 from "Masri" to "Rosemary Bond". Mr Sloan gave the following evidence (T240): Q. What did you then do with one or both of those photocopies? A. Well, with one photocopy I altered the payment on 26 June 1992 from "Masri" to "Rosemary Bond". I don't recall altering anything else on that set. On the other set as time went on, I was trying to track out where cash monies went. When I tracked it out I made additions to that set. Q. You altered both sets? A. Yes. Q. Differently? A. Yes. Further in the transcript(T241): Q. Over what period of time did you make alterations to those stubs? A. I would say over the next few months. Q. What did those alterations consist of? A. Well there was an initial one of mortgage from Masri to Campbell and I recommended the mortgage to Mr Masri. Mr Campbell was defaulting. So that Campbell mortgage was paid out by me in the amount of $15000, that was cash I gave that to Mr Masri. I added Masri to that, right. Then there were two other matters of $9500 and that related to again two payments to Mr Masri." At T245 the witness was asked the following: Q. "Do you say that in the procedure which you followed to produce the copy which you handed to your solicitors, knowing that they would in turn pass that copy on to the Society, there was no intent on your part to deceive? A. No intent to deceive, no. Q. Is this right you felt no shame at what you've had done? A. No. Q. You still feel no shame at what you've had done? A. No. Further in the transcript(T245): Q. You have no problems with the procedure which you adopted to put into the hands of the Society a copy of, an altered copy of cheque stubs. A. No Q. You feel there was nothing dishonest on your part in that procedure? A. No. Q. You don't regard what you did as a conduct unworthy of a solicitor? A. No. Further in the transcript(T246) Mr Sloan was asked whether he handled the other alterations in the same way as the alteration he made to cheque no. 665913 and he said no the other alterations were additions. His evidence on this aspect was that on cheque butt 665806 the word "Masri" did not appear on the original but was added on the copy that his solicitors produced to the Law Society. A similar explanation was made in respect of cheque butts no. 665936 and no. 665860. In other words the Solicitor denied that he deleted anything from these copy cheque butts and asserted that the original cheque butts did not contain the word "Masri" or "Kamal" and these words had been added subsequently to the copies he made of the cheque butts and produced to the Tribunal in respect of the notice to produce issued by the Law Society. The Solicitor's explanation as to how the alteration was made on cheque number 665860 was that the word "(K. Masri)" was whited out and the words "(Rosemary) Bond" were written over this and he agreed that the alteration had been made with the considerable care. When asked as to where the original cheque butts were and the original two copies that he made of the cheque butts the Solicitor's evidence was that these had been in his car when it was stolen in 1993 and that financial records in the car were stolen as well. When asked as to how he could explain that the Kleiner copy of his cheque butts was different from the copy he had produced to the Tribunal he said "the only explanation I've got of that is she would have accessed my personal records at the time she was working for me and got hold of the documents in my tax records and photocopied them. Q. Is this your position that she produced some amalgamated document which was a true copy of neither set of copies? A. That's right." The Solicitor's explanation is implausible and unbelievable and in the opinion of the Tribunal a tissue of lies. The Tribunal accepts that Ms Kleiner made a copy of the Solicitor's cheque butts at the same time as she was asked to make a copy for the Solicitor, at a time when a Trust Account Inspector from the Law Society had asked the Solicitor for copies of his office account records. This Tribunal accepts that the Kleiner copy is an accurate copy of the Solicitor's cheque butts and that the Solicitor has deliberately falsified his copy in order not only to deceive the Law Society but also to deceive this Tribunal. This matter was before either a Registrar or the members of the Tribunal on no less than 13 occasions before it came on for hearing. It is obvious that the Solicitor used every endeavour by way of requests for further and better particulars and other technical means to delay the hearing of the matter and how he could possibly have instructed his solicitors in the way he did indicates a course of dishonesty and deception from the time he was served with the original complaint. The Tribunal's findings against the Solicitor can only result in a finding of professional misconduct and the Tribunal further finds this Solicitor is unfit to be held out as a person of integrity and to be allowed to practise as a solicitor. The Tribunal will make an order removing the Solicitor's name from the Roll. Claim for compensation When the matter was called on for hearing Ms Macrae of Counsel instructed by Ms M. Salama solicitor appeared for Mr Kim and sought leave to make a claim for compensation on his behalf. The claim is made pursuant to Section 139 of the Legal Profession Act 1987 which under sub-section 4 requires the Tribunal to give leave when the claim for compensation is not included in the complaint. Ms Macrae tendered an affidavit of Kyung Chol Kim (also known as Albert Kim) dated 2 May 1995 which in effect reiterated the material in Mr Kim's statutory declaration before the Tribunal (Exhibit Q). On 3 May 1995 Ms Macrae tendered a document headed "Request for Compensation Pursuant to Section 139 of Legal Profession Act 1987" dated 3 May 1995 signed by Ms Salama and the Complainant Mr Kim (MFI 14)now Exhibit C2. Mr Kim declared that between 8 June 1992 and 3 September 1992 he paid a total of $51,000 in cash to the Solicitor for legal services in respect of Nam Jin Kim and additionally he had paid a cheque for $9000 from a finance company to the Solicitor making a total of $60,000 in respect of which he made a claim for compensation. The basis of Mr Kim's claim was that Mr Sloan had not rendered him any account, that he had failed to perform legal services satisfactorily or at all and that "because of the unprofessional conduct and failure of John Sloan to adequately and properly prepare and present a case, the said Nam Jin Kim was deprived of adequate legal representation and was deported to Korea." Mr Kim further makes a claim that he had been fraudulently deprived of the sum of $60,000 and sought compensation for that amount pursuant to S171D of the Act. Mr Kim gave evidence in the proceedings involving Mr Sloan and was cross-examined by Mr Glissan QC who appeared for Mr Sloan. The Tribunal has already found that Mr Kim paid to the Solicitor certain sums of money and these were paid to Mr Sloan for legal fees in respect of Nam Jin Kim. However there is no evidence before the Tribunal as to whether Mr Sloan failed to perform legal services satisfactorily or at all for Ms Kim or that he deprived Mr Kim and Ms Kim of the amount of $60,000. Accordingly the Tribunal is not prepared to make any order for compensation in respect of Kyung Chol Kim also known as Albert Kim. Furthermore the Tribunal points out that under S171D(3) no order for compensation is to be made where the complainant is entitled to bring legal proceedings for recovery or entitled to make a claim on the Fidelity Fund. Even if the Tribunal were satisfied as to the amount of any "loss" which the complainant claims, which it is not, it seems that the provisos set out in sub-section 3 of S 171D apply and no order for compensation should be made. At the request of the Solicitor this matter was listed before the Tribunal on 11 May 1995 when Mr R.N. Gye appeared for the Solicitor and made an application to reopen the case to contest the application for the compensation order requested by Mr Kim. Mr Wales who appeared for the Law Society whilst submitting that the Tribunal had jurisdiction to hear further evidence objected to the application which he said involved permitting Mr Sloan to reopen his case on the issues already litigated. In further submission he stated that although the Solicitor had indicated that he was not proposing to reopen his case the outline of the evidence he proposed to give was that he was now wishing to call evidence which was contrary to evidence already given in the professional misconduct proceedings namely that Mr Kim had paid money to Mr Sloan. Mr Strain of counsel instructed by Ms Salama announced his appearance on behalf of Mr Kim (the Complainant) and whilst confirming that he had no further evidence to adduce in the claim for compensation indicated that if the Tribunal granted the Solicitor leave to reopen his case on this aspect he would need to seek an adjournment on the basis that he had been given no notice of the grounds of the application until he heard Mr Gye announce it in court. In the circumstances the Tribunal refused leave to the Solicitor to reopen his case to contest the claim for compensation on the basis that the matter had been heard over a number of days and the witnesses called by the Law Society including Mr Kim had been cross-examined by Mr Glissan QC who then appeared for the Solicitor and that the Solicitor had given evidence and was in the course of cross-examination when he withdrew his defence and took no further part in the proceedings. Mr Wales sought an order for costs as did Mr Strain appearing for Mr Kim and this was opposed by Mr Gye on the basis that the Law Society had no standing in the claim for compensation and furthermore that the claim for compensation had been made very late in the proceedings. Although there is no specific provision for costs in Section 171D being the section dealing with compensation orders of the Tribunal, S 171E enables the Tribunal to make orders for costs against a legal practitioner whom it is found guilty of unsatisfactory professional conduct or professional misconduct "including the costs of the Commissioner, appropriate Council and the complainant". In these circumstances the Tribunal proposes to order that the costs of the proceedings on 11 May 1995 which were occasioned entirely by the Solicitor be paid by the Solicitor including the costs of the complainant Mr Kyung Chol Kim instructing solicitors and having counsel appear on 11 May 1995. The Tribunal therefore orders that: 1. The name of John David Kilrea Sloan be removed from the Roll of Legal Practitioners. 2. The said John David Kilrea Sloan pay the costs of the Law Society including the proceedings on 11 May 1995 on a solicitor/client basis as if assessed by a Supreme Court Costs Assessor. 3. The said John David Kilrea Sloan pay the costs of the Complainant Kyung Chol Kim in respect of the proceedings on 11 May 1995 on a solicitor/client basis as if assessed by a Supreme Court Costs Assessor. 4. If either party cannot agree on the amount of the costs leave to apply to the Tribunal for assessment of these costs under section 171E of the Legal Profession Act 1987. 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.