Law Society of New South Wales v Holt [2009] NSWADT 163

CITATION: Law Society of New South Wales v Holt [2009] NSWADT 163

DIVISION: Legal Services Division

APPLICANT Law Society of New South Wales PARTIES: RESPONDENT Michael Francis Holt

FILE NUMBER: 072050

HEARING DATES: 19 May 2008

DATE OF DECISION: 26 June 2009

BEFORE: Currie J - Judicial Member; Greenwood J - Judicial Member; Dyster B - Non-Judicial Member

CATCHWORDS: Disciplinary Action for a determination under s.562, Legal Profession Act, 2004

LEGISLATION CITED : Legal Profession Act 1987 Legal Profession Act 2004

CASES CITED: Law Society of New South Wales v Foreman (1994) 34 NSWLR 408 Law Society of New South Wales v Jones (unrep. 27 July 1978) CA (NSW)

APPLICANT A Matalani, solicitor REPRESENTATION: RESPONDENT D Simpson ,solicitor

ORDERS: 1.The name of Michael Francis Holt be removed from the Roll 2. Michael Francis Holt pay the Law Society's costs of and incidental to these proceedings, as agreed or assessed

REASONS FOR DECISION The Application for Decision 1 By its Application for Original Decision dated 17 December 2007, the Council of the Law Society of New South Wales applied for a determination under Section 562 of the Legal Profession Act 2004 against the Respondent Michael Francis Holt, a solicitor. The Application sought orders that: (i) the Respondent's name be removed from the Roll; (ii) the Respondent be ordered to pay the costs of the Law Society of and incidental to the proceedings; and (iii) any further order the Tribunal deems fit. 2 Mr Matalani, solicitor, on behalf of the Law Society, moved at the hearing on the basis of the Application. The Grounds and Particulars: numerous Complaints and Counts 3 The Grounds for Application are set out in summary form in the opening 6 pages of the Application and are accompanied by Particulars which run for a further 50 pages of the Application. The Grounds, as explained by Mr Matalani, are that the Respondent whilst practising as a Solicitor was guilty of professional misconduct by reason of the action summarised in the Ground and particularised in the Particulars. In certain cases the basis of a particular count is an allegation of unsatisfactory professional conduct rather than professional misconduct. However it is the Law Society's case that the allegations of unsatisfactory professional conduct should be read cumulatively, so that the Respondent is guilty of professional misconduct, by operation of s497(1)(a) of the Legal Profession Act, 2004. 4 The Grounds and Particulars relate to 21 separate complaints and 51 counts. They can be divided into 4 classifications namely: (i) the Law Society's complaint that the Respondent misled or attempted to mislead officers of State Revenue and Trust Account Inspectors from the Law Society (the complaint made on 11 August 2004); set out in Ground 1A; (ii) the client complaints set out in Grounds 1B to 1U, inclusive; (iii) the complaint from the Legal Services Commissioner made on 19 May 2005 (file 34541), set out in item 2 of the Grounds; and (iv) the complaint by John Drummond made on 15 October 2003 (file 34698), set out at paragraph 3 of the Grounds. Mr Drummond was not a client of the Respondent. The Receivership and the Law Society's Evidence 5 By order of the Supreme Court of New South Wales, Jean Sayer was appointed Receiver for the Respondent pursuant to Section 92 of the Legal Profession Act 1987, on 11 August 2004. In the course of her Receivership, Ms Sayer prepared Reports dated 9 March 2005, 11 August 2005, 19 August 2005, and 29 September 2005. Ms Sayer's affidavit sworn on 14 December 2007 was admitted into evidence at the hearing of this matter, and her Reports are annexures to that Affidavit. 6 Further evidence in support of the Law Society's case was set out in the affidavit of Raymond John Collins, the Manager of the Professional Standards Division of the Law Society, in an affidavit sworn on 17 December 2007. This affidavit annexes a bundle of Law Society correspondence concerning the complaints. Further affidavit evidence was provided by way of two affidavits by Francis Anne Louise Moffitt, who at all relevant times was a Trust Account Inspector of the Law Society. Her affidavits, sworn on 11 April 2008 and 16 April 2008, set out details of the investigation of the Respondent conducted by the Trust Account Inspector's office and Ms Moffitt's discussions with the Respondent, and the affidavits annexe relevant correspondence, including correspondence with the Legal Services Commissioner, and the report, under Section 55 of the Legal Profession Act 1987, of the Inspection and Investigation Department of the Law Society. 7 The affidavit evidence introduced by the Law Society in this way contains a substantial amount of evidentiary material in respect of each of the counts. The Respondent's case 8 The Respondent filed, on 29 February 2008 a Reply to the Application in which, in respect of each of the counts set out in the Application, the Respondent did not admit the allegation. However, at the hearing, Mr Simpson for the Respondent indicated that the Reply had been withdrawn and that the orders sought by the Law Society were consented to but without admission. The Tribunal's findings in respect of each Count 9 In light of the way in which the Respondent's case was pleaded and put before the Tribunal, it seems to the Tribunal proper that each count should be considered separately. This judgment proceeds to refer to each of the complaints set out by the Law Society in the Application; to make a finding as to the allegations set out in each count; to clarify its finding as to whether professional misconduct or unsatisfactory professional conduct has been established in respect of each count; and then to confirm its orders. (i) Law Society complaint that Respondent misled or attempted to mislead officers of State Revenue and Trust Account Inspectors. 10 The Law Society's allegations are set out and particularised in paragraph 1A covering pages 1 to 6 of the Particulars. There is supporting material in the affidavit of Francis Anne Louise Moffitt sworn 11 April 2008 and in Ms Moffitt's affidavit sworn 16 April 2008, as well as certain of the exhibits of the affidavit of Jean Sayer. 11 The allegations are not challenged by the Respondent. The allegations are accepted by the Tribunal and the Tribunal makes its findings on that basis. The Tribunal finds the Respondent guilty of professional misconduct by reason of the facts so established. (ii) The client complaints set out in Grounds 1B to 1U, inclusive of the Particulars 12 Paragraphs 1B to 1U, inclusive, of the Particulars set out allegations in respect of the Respondent's conduct in acting for various clients. 13 In summary the clients concerned and the counts in respect of each client are as follows: 14 B. George Katrib and Zenith Construction and Development Pty Limited 1. Failure to account to the client. 2. Party to the false stamping of documents in an attempt to defraud the Office of State Revenue 15 C. Nevis Paula Lakosh (aka Lakoselac) 1. Misappropriation of trust monies. 2. Gross negligence in failing to lodge discharge of mortgage and transfer for registration. 3. Party to false stamping of documents in an attempt to defraud the Office of State Revenue. 16 D. Robert Anthony Bruce Welch and Judith Anne Welsh 1. Gross delay in lodging transfer for registration. 2. Party to the false stamping of documents in an attempt to defraud the Office of State Revenue. 17 E. Mary and Brian Truman Lo 1. Delay in rectifying transfers. 2. Negligently preparing and registering certain transfers. 3. Forging the signature of Jessie Lo. 4. Party to the false stamping of documents in an attempt to defraud the Office of State Revenue. 18 F. Ray Simpson Pty Limited 1. Misappropriation of trust monies. 2. Party to the false stamping of documents in an attempt to defraud the Office of State Revenue. 19 G. Durward Pty Limited and Charles and Anthony Gittany and Ibrahim Abbas 1. Wilful breach of section 61 of the Legal Profession Act 1987. 2. Party to the false stamping of documents in an attempt to defraud the Office of State Revenue. 20 H. Kelvaro Pty Limited 1. Party to the false stamping of documents in an attempt to defraud the Office of State Revenue. 2. Wilful breach of section 62 of the Legal Profession Act 1987. 21 I. Gamacon Pty Limited 1. Wilful breach of section 62 of the Legal Profession Act 1987. 22 J. Kevin Manson Pty Limited 1. Misappropriation of trust monies. 2. Party to the false stamping of documents in an attempt to defraud the Office of State Revenue. 3. Negligently effecting transfers. 23 K. Lesley Rita Sandilant and Susan Jillian Trenear 1. Wilful breach of section 61 of the Legal Profession Act 1987. 2. Misappropriation of trust monies. 3. Party to the false stamping of documents in an attempt to defraud the Office of State Revenue. 4. Misleading the clients by letter dated 3 February 2004. 5. Practising without a practising certificate. 6. Holding himself out to be a practising solicitor by using the letterhead of Holt & Allen. 24 L. Richard Fogarty and Melanie Chapman 1. Wilful breach of section 61 of the Legal Profession Act 1987. 2. Wilful breach of section 62 of the Legal Profession Act 1987. 3. Party to the false stamping of documents in an attempt to defraud the Office of State Revenue. 25 M. Theodora Zaxarias Panaretos 1. Breach of fiduciary duties to Theodora Zaxarias Panaretos. 2. Acting in a conflict of interest. 3. Wilful breach of section 61 of the Legal Profession Act 1987. 4. Wilful breach of section 62 of the Legal Profession Act 1987. 5. Forging the signature of Mrs Panaretos. 6. Forging the signature of Rod Lennart Nilsson. 26 N. Valerie Inez Clisdell 1. Wilful breach of section 61 of the Legal Profession Act 1987. 2. Wilful breach of section 62 of the Legal Profession Act 1987. 27 O. Grguric 1. Wilful breach of section 61 of the Legal Profession Act 1987. 28 P. Philip William Riley and Karen Maree Riley 1. Wilful breach of section 61 of the Legal Profession Act 1987. 29 Q. Sana Mary Tannous 1. Wilful breach of section 61 of the Legal Profession Act 1987. 2. Failure to secure a relevant loan by failure to register a mortgage or to lodge a caveat. 30 R. Excavation Project Management Pty Limited and R and LC Nilsson 1. Breach of fiduciary duties. 2. Failure to account. 31 S. Bigrin Pty Limited and PBS Holdings Pty Limited 1. Failure to attend diligently to the discharge of a mortgage. 32 T. Estate late Yvonne Mary Rutherford 1. Wilful breach of section 61 of the Legal Profession Act 1987. 2. Failure to account to Kelvaro Pty Limited 33 U. Yei Fui Xie 1. Gross delay in handling the matter. 34 In respect of each of these complaints, and each count, the allegations are not challenged by the Respondent. The allegations are accepted by the Tribunal and the Tribunal makes its findings on that basis. The Tribunal finds the Respondent guilty of professional misconduct by reason of the facts so established. 35 For clarification, in respect of counts B1, C2, D1, E1 and E2, J3, K4, K5, K6, M1 and M2, Q2, R1 and 2, S1, and U1, the Tribunal finds that on an individual basis each such allegation amounts to an allegation of unsatisfactory professional conduct rather than professional misconduct. However, the Tribunal finds that the allegations when taken cumulatively, amount to professional misconduct by the Respondent on the basis that the Respondent's conduct involves a substantial and consistent failure to reach or maintain a reasonable standard of competence and diligence, within the meaning of s497(1)(a) of the Legal Profession Act 2004. (iii) Complaint from Legal Services Commissioner made on 19 May 2005 36 Paragraph 2, on pages 49 and 50 of the Particulars sets out this complaint. It is effectively that the Respondent wilfully misled the Commissioner in the exercise of his investigatory powers pursuant to the Legal Profession Act 1987. The facts are set out in detail in paragraphs (a) to (k) on pages 49 and 50 of the Particulars. 37 The facts are supported by the evidentiary material particularly annexures to the affidavit of Jean Sayer. 38 The allegations are not challenged by the Respondent. The allegations are accepted by the Tribunal and the Tribunal makes its findings on that basis. The Tribunal finds the Respondent guilty of professional misconduct by reason of the facts so established. (iv) The complaint by John Drummond made on 15 October 2003 39 This complaint is to the effect that the Respondent was guilty of inordinate delay in completing the registration of plans with the Land and Property Information Service. The allegations are set out in more detail in paragraph 3 on page 50 of the Particulars. 40 These allegations are not challenged by the Respondent. The allegations are accepted by the Tribunal and the Tribunal makes its findings on that basis. The Tribunal finds that the Respondent is guilty of unsatisfactory professional conduct by reason of the facts so established. However, having considered these facts cumulatively with the facts surrounding the allegations of unsatisfactory professional conduct as described in paragraph 35 above, as well as the complaints involving professional misconduct, the Tribunal finds the Respondent guilty of professional misconduct, on the basis that the unsatisfactory professional conduct of the Respondent involves a substantial and consistent failure to reach or maintain a reasonable standard of competence and diligence, within the meaning of s497(1)(a) of the Legal Profession Act 2004. The Tribunal's Orders 41 The Tribunal is of the view that the Respondent's conduct constitutes a prolonged and sustained failure to practice, or to deal with his clients, in accordance with the most basic precepts of professional conduct for solicitors. 42 Amongst other findings of fact which the Tribunal has made, it is clear that the Respondent has forged documents, has been quite deliberately a party to the false stamping of documents in an attempt to defraud the Office of State Revenue, has deliberately misled his clients, including on some occasions elderly clients who clearly relied on and trusted the Respondent, and has been guilty of numerous wilful breaches of sections 61 and 62 of the Legal Profession Act 1987. 43 In the case of Law Society of New South Wales v Foreman (1994) 34 NSWLR 408, Mahoney JA said at page 444: "It is also, I think, relevant for the Court to take into account the effect which its order will have upon the understanding, in the profession and amongst the public, of the standard of behaviour required of solicitors. The Court will no doubt, where appropriate, articulate the standards required and that they are high. However, the Court must, I think, also take into account the effect of what it has said of, for example, a decision to allow a solicitor guilty of a serious infringement of those standards, to continue to practise." 44 In Law Society of New South Wales v Jones (unrep. 27 July 1978) CA (NSW), Street CJ said: "Reliability and integrity in the handling of trust funds are fundamental prerequisites in determining whether an individual is a fit and proper person to be entrusted with the responsibilities belonging to a solicitor." 45 The Tribunal is influenced by these remarks in light of its findings as to the highly unsatisfactory nature of the Respondent's actions in respect of clients' monies. 46 Quite apart from the Respondent's action in respect of clients' monies, the way in which he has conducted his practice, and in particular the way in which he has deliberately misled his clients and, where he deemed it necessary, forged signatures, renders him a person who is in no way fit and proper to be held out by the Court as a legal practitioner. 47 Accordingly, the Tribunal has ordered that the Respondent's name be removed from the Roll. Orders 48 The Tribunal orders that the name of Michael Francis Holt be removed from the Roll. 49 The Tribunal orders that Michael Francis Holt pay the Law Society's costs of and incidental to these proceedings, as agreed or assessed.