The Legal Services Tribunal of New South Wales CITATION : Christopher Neil Ingham [1996] NSWLST 18 PARTIES : Christopher Neil Ingham FILE NUMBER(S) : of 1995 CORAM: Mr W.M.Macquarie (Presiding Member) - Ms C.A. Gailey - Mr N. Reidy CATCHWORDS: Professional Misconduct - make false statement :- fraud on the revenue of New South Wales. LEGISLATION CITED: Legal Profession Act 1987 In the matter of George Peter Duckett White; CASES CITED: In the matter of Mark Christopher Gibbins; Law Society of New South Wales v Foreman 34 NSWLR; In the matter of Stephen Martin Freeman DATES OF HEARING: 12 September 1996 DATE OF JUDGMENT: 12/12/1996 Mr G.J. Still solicitor for the Council of the Law Society of New South Wales. LEGAL REPRESENTATIVES: Mr I. M. Wales of Counsel instructed by Sparke Helmore for the solicitor. JUDGMENT: The solicitor admitted professional misconduct in that during 1994 and 1995 on nineteen occasions he either caused the front page of Contracts for Sale to be re-typed, replaced and re-dated or alternatively dated Contracts for Sale after the true date of exchange. The Contracts for Sale were submitted to the Office of State Revenue and penalty duty evaded. The Tribunal found that the solicitor's actions constituted very serious professional misconduct, a gross lack of regard for a solicitor's duty in respect of payment of stamp duty and a fraud on the revenue of New South Wales. The Tribunal ordered that the solicitor's practising certificate be cancelled, that a practising certificate not be issued for four years and that during that period the solicitor attend and complete a Practice Management course, attend a Risk Management course and undertake MCLE. The Tribunal further ordered that the solicitor pay a fine of $10,000.00 and the Society's costs of $5,186.00 Information B y an information dated 28 June 1996 filed in the Tribunal on 28 June 1996, the Council of the Law Society of New South Wales (the Society) complained that Christopher Neil Ingham (the Solicitor) was guilty of professional misconduct. The grounds on which the complaint was made are: "1. The Solicitor on 19 occasions when acting for the purchasers to conveyancing transactions either personally or by direction to his staff changed the dates on the Contracts for Sale. 2. The Solicitor produced such Contracts to the Office of State Revenue for stamping which he knew bore false dates. 3. The Solicitor by such production intended to and did evade the payment of additional stamp duty by way of fine properly due for late stamping. 4. The Solicitor on one occasion when acting for the purchaser to a conveyancing transaction either personally or by direction of his staff, inserted an incorrect date in a Contract for Sale." Reply By his solicitors, the Solicitor accepted that he was guilty of professional misconduct in relation to the 20 matters referred to in the information and adhered to details of the offences that he had previously given to the Society concerning each matter, and which were set out in an annexure to statutory declaration by Garry James Still dated 28 June 1996, tendered in evidence. Facts On 13 occasions, after exchange of contracts, the Solicitor caused the front page of the contracts to be retyped, replaced and redated so that when the contracts were lodged for stamping in the Office of State Revenue, penalty duty would be evaded. On 7 occasions, after exchange of contracts, where the contracts had not been dated on exchange, the solicitor dated the contracts after the date of exchange so that when the contracts were lodged for stamping in the Office of State Revenue penalty duty would be evaded. Brief details of each of the matters are: Matters where front pages were replaced 1. P.R. Leigh and K.T. Mongan from G.R. Smith Contracts exchanged 29/7/94 Stamp duty payable without penalty 28/9/94 Settled 28/11/94 Contract dated on substituted page 14/12/94 Stamped 31/1/95 Stamp duty $2,725.00 The Solicitor acted for the purchasers of a house and also acted for the mortgagee. After settlement the Solicitor sent a settlement statement to the purchasers, which included an amount for stamp duty, at the normal rate, i.e. without any penalty. The amount required was $6,559.74. By the time the settlement statement was sent just over 4 months had expired from the date of exchange of contracts.. The purchaser made these payments into the Solicitor's trust account: 14/12/94 $1,700.00 15/12/94 $1,300.00 27/1/95 $1,400.00 A cheque for stamp duty was drawn on 27/1/95. It appears that the front page of the contract was substituted and redated, after the date of settlement. 2. G.T. & M. Lewis from the Broken Hill Proprietary Company Limited Contracts exchanged 28/6/95 Stamp duty payable without penalty 27/8/95 Settled 9/8/95 Contract dated on substituted front page 12/7/95 Stamped 6/9/95 Stamp duty $1,556.00 What happened The Solicitor acted for the purchasers on the purchase of vacant land and also for the mortgagee. The Solicitor did nothing about stamp duty until after settlement. After settlement the Solicitor sent a settlement statement dated 15/8/95 to the purchaser which included an amount for stamp duty at the normal rate. The amount required was $1,000.00. By the time the settlement statement was forwarded two months had not expired from the date of exchange of contracts. No urgency or time limit for payment of stamp duty was indicated by the solicitor.. The amount required was paid on 24/8/95 i.e still within 2 months from the date of exchange of contracts. A cheque for stamp duty was drawn on 5/9/95. It appears that the front page of the contract was substituted and redated after the date of settlement. 3. G.S. Bush from D.F. McCloy Holdings Pty Limited Contracts exchanged 12/4/94 Stamp duty payable without penalty 11/6/94 Settled 12/8/94 Contract dated on substituted front page 18/7/934 Stamped 11/8/94 Stamp duty $1,027.50 What happened The Solicitor acted for the purchaser of vacant land. After some delay a loan was approved by ANZ Bank on 18 July 1994. Before settlement a settlement statement was sent to the purchaser which included an amount for stamp duty at the normal rate. The amount required was $6,665.42. By the time the settlement statement was sent almost 4 months had expired from the date of exchange of contracts. It appears that the front page of the contract was substituted and redated after the date of settlement. 4. M.P. & K.L. Houlihan from Stockland (Constructors) Pty Ltd Contracts exchanged 18/8/94 Stamp duty payable without penalty 17/10/94 Settled 14/10/94 Contracts dated on substituted front page 22/9/94 Stamped 18/11/94 Stamp duty $1,027.50 What happened The Solicitor acted for the purchasers on the purchase of vacant land and also for the mortgagee. When contracts were exchanged the plan of subdivision for the land had not been registered. After settlement the Solicitor sent a settlement statement to the purchasers which included an amount for stamp duty at the normal rate. The amount required was $2,237.10. At the date of settlement the purchasers had 4 days to go before incurring penalty duty. No urgency or time limit for payment of stamp duty was indicated by the Solicitor. The amount required was paid on 27/10/94. A cheque for stamp duty was drawn on 27/10/94. It appears that the front page of the contract was substituted and redated after the date of settlement. 5. P. & V. Corbett from K.N. & D.J. Shelswell Contracts exchanged 10/5/94 Stamp duty payable without penalty 9/7/94 Settled 21/4/95 Contract dated on substituted front page 12/7/94 Stamped 2/9/94 Stamp duty $3,740.00 What happened The Solicitor acted for the purchasers who were personal friends on the purchase of a strata unit. When contracts were exchanged the strata plan of subdivision had not been registered. The purchasers had the money to complete the purchase i.e. no mortgage was required. Settlement was delayed and the Solicitor did not collect the amount of stamp duty in time. The contract was stamped on 2/9/94, i.e. before completion. By the date that the contract was stamped almost 4 months had expired from the date of exchange of contracts. The front page of the contract was substituted and redated before the date of settlement, i.e. when the contract was a "live" contract and had not merged in the transfer. 6. J.A. Payne & M.J. Broadbent from Sunrise Estates Pty Ltd Contracts exchanged 28/2/94 Stamp duty payable without penalty 27/4/94 Settled 6/4/94 Contract dated on substituted front page 30/5/94 Stamped 20/7/94 Stamp duty (after reduction for first home purchase) $449.75 What happened The Solicitor acted for the purchasers of vacant land and for the mortgagee. After settlement a settlement statement was sent to the purchasers which included an amount for stamp duty at the normal rate. The amount required was $154.77. At the date of settlement 2 months had not expired from the date of exchange of contracts. No urgency or time limit for payment of stamp duty was indicated by the Solicitor. When the matter was settled there was an amount of $770.75 left in the Solicitor's trust account. This was sufficient to pay the stamp duty but the cheque for stamp duty was not drawn until 18/7/94. It appears that the front page of the contract was substituted and redated after the date of settlement. 7. M.J. Bailey from P.M. & D.A. Gosling Contracts exchanged 19/12/94 Stamp duty payable without penalty 18/2/95 Settled 30/1/95 Contract dated on substituted front page 16/1/95 Stamped 6/5/95 (after requisitions) Stamp duty (after reduction for first home purchase) $1,956.50 What happened The Solicitor acted for the purchasers on the purchase of a house and also for the mortgagee. After settlement the Solicitor sent a settlement statement to the purchaser which included an amount for stamp duty at the normal rate. The amount required was $3,925.63. When the settlement statement was sent the purchaser had just over two weeks in which to pay stamp duty without incurring a penalty. No urgency or time limit for payment of stamp duty was indicated by the Solicitor. The amount required was paid on 7/3/95. A cheque for stamp duty was drawn on 7/3/95. It appears that the front page of the contract was substituted redated after the date of settlement. 8. P.Z. Dobisz & G.F. Wilson from G.T. & B.C. Kelly Contracts exchanged 17/2/94 Stamp duty payable without penalty 16/4/94 Settled 25/3/94 Contract dated on substituted front page 27/4/94 Stamped 17/6/94 Stamp duty $800.00 What happened The Solicitor acted for the purchasers on the purchase of vacant land and also for the mortgagee. After settlement the Solicitor sent a settlement statement to the purchasers which included an amount for stamp duty at the normal rate. The amount required was $2,110.07. At the time of settlement the purchaser had about 3 weeks to stamp the contract without penalty. No urgency or time limit for payment of stamp duty was indicated by the Solicitor. $1,820.07, which was part of the amount required was paid on 22/4/94. The purchasers deducted $290.00 which they claimed as a stamp duty reduction for first home purchase. A cheque for the stamp duty was drawn on 16/6/94 after it was resolved that the purchasers were not entitled to a reduction of duty and had paid the balance. When the part of the amount required was paid on 22/4/94, just over 2 months had expired since the date of exchange of contracts. By the time stamp duty was paid 4 months had expired from the date of exchange of contracts. It appears that the front page of the contract was substituted and redated after the date of settlement. 9. M.E. Davies & T.R. Husband from E. Brown Contracts exchanged 20/7/94 Stamp duty payable without penalty 19/9/94 Settled 30/8/94 Contract dated on substituted front page 20/8/94 Stamped 13/10/94 Stamp duty (after reduction for first home purchase) $756.00 What happened The Solicitor acted for the purchasers on the purchase of a strata home unit and for the mortgagee. The Solicitor received the amount of the advance from the mortgage and the balance due on settlement by the purchasers, including stamp duty, on 30/8/94, the settlement date. By the settlement date the purchaser had about 3 weeks to stamp the contract without penalty. A cheque for stamp duty was drawn on 30/8/94 but was not sent to the Office of State Revenue because the purchasers had not properly completed a stamp duty application form for reduction of duty for first home purchase. The form was sent to the purchasers but was not returned to the Solicitor until 11/10/94. By the time the Solicitor received the application form about 2½ months had expired from the date of exchange of contracts. No urgency or time limit for the return of the form was indicated by the Solicitor. It appears that the front page of the contract was substituted and redated after the date of settlement. 10. R.J. & K.A. Handel from R.F.T. Investments Pty Ltd Contracts exchanged 31/3/95 Stamp duty payable without penalty 30/5/95 Settled 5/7/95 Contract dated on substituted front page 25/5/95 Stamped 5/7/95 Stamp duty $625.00 What happened The Solicitor acted for the purchasers on the purchase of vacant land. The purchase was fully funded by the Commonwealth Bank. When contracts were exchanged the plan of subdivision for the land had not been registered. The Solicitor did nothing about payment of stamp duty until settlement. By settlement just over 1 month had expired from the date of exchange of contracts. Stamp duty, costs and adjustments were paid on the date of settlement and a cheque for stamp duty was drawn on that day. The front page of the contract was substituted and redated before settlement, i.e. when the contract was a "live" contract and had not merged in the transfer. 11. M.A. & D.M. Anstey from Glenwood Corporation Pty Ltd Contracts exchanged 21/4/95 Stamp duty payable without penalty 20/6/95 Settled 29/8/95 Contract dated on substituted front page 21/7/95 Stamped 29/8/95 Stamp duty (after reduction for first home purchase) $453.42 What happened The Solicitor acted for the purchasers on the purchase of vacant land. When contracts for sale were exchanged the plan of subdivision for the land had not been registered. The Solicitor did nothing about payment of stamp duty until settlement. By the date of settlement just over 4 months had expired from the date of exchange of contracts. The balance due on settlement by the purchasers, including stamp duty was paid to the solicitor on 28/8/95 and a cheque for stamp duty was drawn on that day. The front page of the contract was substituted before the date of settlement, i.e. when the contract was a "live" contract and had not merged in the transfer. 12. P.J. Anderson from L.P. & J.C. Monkhouse Contracts exchanged 22/11/94 Stamp duty payable without penalty 21/1/95 Settled 16/12/94 Contract dated on substituted front page 9/3/95 Stamped 13/4/95 Stamp duty $2,165.00 What happened The Solicitor acted for the purchaser, who is a personal friend, on the purchase of a house and also for the mortgagee. The purchaser qualified for first home purchase concession and elected to pay the duty over a period of 5 years. At the time of settlement the purchaser had signed the application for payment of stamp duty by instalments but had not provided confirmation of income details to the Solicitor, for annexure to the application. Income details were not furnished until 11/4/95. By the time the Solicitor was in a position to lodge the application for payment of stamp duty by instalments almost 4½ months had expired from the date of exchange of contracts. The matter was settled just short of 1 month after the date of exchange of contracts. Accordingly the purchaser had just over 1 month to provide the income details. No urgency or time limit for submission of income details was indicated by the Solicitor. It appears that the front page of the contract was substituted and redated after the date of settlement. 13. K.J. & J. Stapleton from Verron Pty Ltd Contracts exchanged 21/7/94 Stamp duty payable without penalty 20/9/94 Settled 10/3/95 Contract dated on substituted front page 16/2/95 Stamped 23/3/95 Stamp duty $1,027.50 What happened The Solicitor acted for the purchasers on the purchase of vacant land and for the mortgagee. When contracts were exchanged the plan of subdivision for the land had not been registered. The Solicitor did nothing about stamp duty until settlement. By the date of settlement almost 8 months had expired from the date exchange of contracts. Before completion the Solicitor sent a settlement statement to the purchasers which included an amount for stamp duty at the normal rate. The amount required was $2,776.92 which was paid into the Solicitor's trust account on 20/2/95. A cheque in favour of Office of State Revenue was drawn on 20/3/95. Matters where incorrect dates were inserted 1. T.Kloczko & B.A. Corbett from D.J. & J.S. Hourigan Contracts exchanged 26/9/94 Stamp duty payable without penalty 25/11/94 Settled 11/11/94 Contract dated 13/12/94 Stamped 11/1/95 Stamp duty $2,515.00 What happened The Solicitor acted for the purchasers on the purchase of a house and also for the mortgagee. Prior to settlement the Solicitor sent a settlement statement to the purchasers which included an amount for stamp duty at the normal rate. The amount required was $18,465.75. The amount required to settle and the amount advanced by the mortgagee were paid into the Solicitor's trust account on 11/11/94. A cheque for stamp duty in favour of Office of State Revenue was drawn on 11/11/94 but by mistake remained in the file until detected in January 1995. There was no date on the front page of the contract when contracts were exchanged. The Solicitor caused the contract to be dated 13/12/94. It appears that the contract was incorrectly dated after settlement. 2. L.M. Krause from M.L.M. Corcoran Contracts exchanged 5/9/94 Stamp duty payable without penalty 4/11/94 Settled 7/10/94 Contract dated 20/9/94 Stamped 21/10/94 Stamp duty (after reduction for first home purchase) $817.25 What happened The Solicitor acted for the purchaser of a strata home unit and for the mortgagee. Before settlement the Solicitor sent a settlement statement to the purchasers which included an amount for stamp duty at the normal rate less 30 per cent for first home purchase. The amount required was $2,591.19. On the date of settlement the purchaser paid the amount required into the Solicitor's trust account. On the date of settlement just over 1 month had expired from the date of exchange of contracts. Stamp duty was paid on 21/10/94, within 2 months from the date of exchange of contracts. The Solicitor's offence was to date the contract 20/9/94 instead of 5/9/94. By inserting the wrong date in the contract the Solicitor did not cause the avoidance of any stamp duty. It appears that the contract was incorrectly dated after settlement. 3. P. & H.M. Kearney from P.E. & D.J. Thelander Contracts exchanged 4/5/95 Stamp duty payable without penalty 3/7/95 Settled 25/5/95 Contract dated 26/5/95 Stamped 7/7/95 Stamp duty $3,950.00 What happened The Solicitor acted for the purchasers on the purchase of a house and for the mortgagee. On 19 June 1995, following settlement on 25 May 1995, the Solicitor sent a settlement statement to the purchasers which included stamp duty at the normal rate. The amount required was $6,678.42. No urgency or time limit for payment of stamp duty was indicated by the Solicitor. The amount required was paid on 6 July 1995. By the time the purchasers paid the amount required on settlement, 2 months from the date of exchange of contracts had just expired. A cheque for stamp duty in favour of the Office of State Revenue was drawn on 6 July 1995. It appears that the Solicitor inserted the incorrect date in the contract after settlement. 4. D.J. & T.R. Matas from R.T. & L.E. Linter Contract exchanged 31/5/95 Stamp duty payable without penalty 30/7/95 Settled 18/8/95 Contract dated 17/7/95 Stamped 18/8/95 Stamp duty $5,140.00 What happened The Solicitor acted for the purchasers on the purchase of a house. The contract provided for the completion date to be on or before 25/8/95. The Solicitor did nothing about stamp duty until settlement. On 11/8/95 the Solicitor sent a settlement statement to the purchasers which included an amount for stamp duty at the normal rate. The amount required was $38,662.08 of which $7,115.00 was to be paid to the Solicitor for stamp duty, surveyor's fees and costs & disbursements. The sum of $7,115.00 was paid into the Solicitor's trust account on 18/8/95. By the time the amount required was paid into the Solicitor's trust account just over 2½ months had expired from the date of exchange of contracts. The Solicitor caused the contract to be dated 17/7/95. The incorrect date was inserted in the contract before settlement. 5. M.W. Mazalo from B.D. & V.A. Brown Contracts exchanged 15/6/95 Stamp duty payable without penalty 14/8/95 Settled 8/8/95 Contract dated 18/7/95 Stamped 23/8/95 Stamp duty $8,185.00 What happened The Solicitor acted for the purchaser on the purchase of a block of flats and also for the mortgagee. On 15/8/95, following settlement, the Solicitor sent a settlement statement to the purchaser which included an amount for stamp duty at the normal rate. The amount required was $2,538.99. The Solicitor received mortgage moneys on the settlement date and by that date had already received a part payment of $11,000.00 from the purchaser. Following settlement there was an amount of $9,529.42 in the Solicitor's trust account. This was sufficient to pay the stamp duty but the Solicitor did not do so. The amount required from the purchaser was paid to the Solicitor on 22/8/95 and a cheque in favour of Office of State Revenue was drawn on that date. By the time the client paid the amount required on settlement a period of just over 2 months had expired from the date of exchange of contracts. No urgency or time limit for payment of stamp duty was indicated by the Solicitor. It appears that the contract was incorrectly dated after settlement. 6. J.R. & M.J. Roohan from D.F. McCloy Holdings Pty Ltd Contracts exchanged 23/8/94 Stamp duty payable without penalty 22/10/94 Settled 23/12/94 Contract dated 28/11/94 Stamped after 23/12/94 Stamp duty $992.50 What happened The Solicitor acted for the purchaser of vacant land and for the mortgagee. When contracts for sale were exchanged the plan of subdivision for the land had not been registered. The Solicitor did nothing about stamp duty until the plan of subdivision was registered on 28 November 1994. On 9/1/95, following settlement, the Solicitor sent a settlement statement to the purchasers which included an amount for stamp duty at the normal rate. The amount required was $2,693.50, allowing for an amount of $6,909.90 paid by the purchasers on 22/12/94 and an advance of $56,500.00 provided by the mortgagee on 15/12/94. By the date of settlement more than 4 months had expired from the date of exchange of contracts. It appears that the client provided a cheque in favour of Office of State Revenue for stamp duty and that duty was paid in December 1994. It appears that the incorrect date was inserted in the contract after settlement. 7. R.J. & D.M. Skelly from J.T. & H.A. Giles Contracts exchanged 13/9/94 Stamp duty payable without penalty 12/11/94 Settled 27/10/94 Contract dated 22/12/94 Stamped 10/1/95 Stamp duty $3,390.00 What happened The Solicitor acted for the purchasers on the purchase of a house and for the mortgagee. On 14 December 1994, following settlement the Solicitor sent a settlement statement to the purchasers which included an amount for stamp duty at the normal rate. The amount required was $6,115.95. When the matter was settled the purchasers had approximately 2 weeks to pay stamp duty before the expiration of 2 months from the date of exchange of contracts. By the time the Solicitor wrote to the purchaser on 14/12/94 requesting the balance due on settlement 3 months had expired from the date of exchange of contracts. No urgency or time limit for payment of stamp duty was indicated by the Solicitor. The balance due on settlement was paid by the purchasers on 22/12/94. A cheque in favour of Office of State Revenue for $3,735.00, for stamp duty on the contract and mortgages was drawn on 9/1/95. It appears that the incorrect date on the contract was inserted after settlement. The solicitor's explanation In a statutory declaration dated 15 August 1996, tendered in evidence, the Solicitor stated, inter alia: "13. Before 1994 I had a strict practice whereby, soon after exchange, I wrote to the client informing him or her that exchange had taken place, advising of the anticipated date of settlement and if acting for a purchaser, asking for a cheque payable to the Stamp Duties Office for the stamp duty. 14. In the period 1994 to 1996 I began not always to follow that practice. Over a time, had come to act for a number of lending institutions and in many matters acted for both the purchaser and the lending institution. When a mortgagee is represented by a different firm than the purchaser, stamp duty has to be paid before settlement or settlement cannot take place. When one is acting for both the purchaser and the mortgagee, the payment of stamp duty can be effected after settlement. I slipped into the habit of rendering some accounts after a matter had settled rather than before, contrary to my earlier practice. In such cases, I did not receive the stamp duty until after completion. Virtually always in these cases I received stamp duty within the period of two months after exchange, even though after completion. On average, there were about five weeks between exchange and completion, so I had some four weeks remaining in which to receive and pay the stamp duty." Significant features of the Solicitor's evidence before us are: In evidence in chief: "Q. Going back to these events in 1994 and 1995 and thereabouts, when you put false contracts in front of the Stamp Office, were you doing it for the purpose of yourself avoiding having to pay from your own pocket any penalty stamp duty? A. Not at that time, no. It didn't occur to me at that time that I was purposely avoiding any duty. " In cross examination: "Q. I think you said to Mr Wales that you were aware of the practice in 1994 that where there may have been an issue about stamp duty remissions you could make application to the Commissioner? A. Yes." Q. But you didn't do that in the period 1994 to 1995 until after these matters were discovered by the trust account inspectors? A. No. Q. Can you tell me why you didn't do that? A. I really can't point to one single factor as to my course of conduct over this eighteen month period. It was a combination of factors based on the volume of work, the personal pressures from within the practice and the practice that I had adopted within this twelve to eighteen month period seemed to stem from the extent of matters that I was being instructed on during that period of time. Prior to 1993 I was a panel solicitor for the Newcastle Permanent, but the work seemed to extend in the early part of 1994 and 1995 and continued to the extent that, of the matters I was being instructed on, there were some matters that I was delinquent on. Q. Doesn't it go beyond delinquency? At any stage when you informed a purchaser of the stamp duty that was owing, it didn't matter whether it was within the period that stamp duty could properly be paid or after it, the figure always remained the same. Can you explain that? A. It didn't seem to me at the time to be a question of where I was deliberately avoiding any fine, it was a circumstance that just grew upon itself as each matter came. I fell into that habit of rendering an account after settlement. It was foreign; this is in isolated instances because these files must be seen in perspective with the amount of files had to deal with. I turned over 700 or 800 files in this two year period. Now I have disclosed these files in good faith and they are a very minor percentage of the major part of my practice. Q. You have told the Tribunal what you do now in respect of stamp duty remissions. It is purely speculation, but had you not been the subject of a random audit could this situation still have continued? A. It might well have. Q. It could have still been happening now? A. Yes. Q. You must have appreciated at the time either you yourself or by direction of your staff had them insert a different date in the contract? A. That's correct. Q. And on many occasions had them retype the front page of that contract and insert a date? A. That's correct. Q. And that was simply to cover a delinquency, do you say? A. When the matter was brought to my attention as a file came across my desk and I saw that the period of time for stamping had elapsed, that was the regrettable opinion that I formed at that time. Q. What did you think the consequence of that very deliberate action would be? A. I had no idea that it would have the consequence that sees me here today. Q. What about the consequence in respect of State Revenue? What do you think the consequences were in taking that action? A. It was not until these matters were brought to my attention that I realised the gross serious misconduct that I had undertaken. Q. You appreciate that at the time you had those changes made the only purpose in making them was to avoid the payment of fines to the Stamp Office? A. The question of stamp duty has always been raised with the client on taking instructions and giving an indication of fees. It happened in these matters that in some instances the clients were unable to pay that stamp duty and I formed the incorrect decision to change the date on contracts to avoid that penalty stamp duty". During 1994 and 1995 the Solicitor substituted front pages of contracts with false dates and inserted false dates in others, as set out in the facts. In all but the Krause matter the end result was that the payment of penalty stamp duty was evaded and this evasion would have remained undetected but for an event that arose during a routine trust account inspection. The Solicitor did not seem to comprehend that what he was doing was wrong. It became a matter of routine and he seemed to think that he could do what he did with impunity, having no regard to the revenue issues involved. Had his practice of evasion of stamp duty not been detected, it is likely that he would still be doing the same thing, if the need arose. What the Solicitor did was fraud upon the revenue of the State of New South Wales and in breach of the Stamp Duties Act 1920. Section 19(1) provides: "19. (1) All the facts and circumstances affecting the liability of any instrument to duty, or the amount of the duty with which it is chargeable, are to be fully and truly set forth in such instrument." Section 21 provides: "21. Every person who, with intent to defraud Her Majesty: (a) executes any instrument in which all the said facts and circumstances are not fully and truly set forth; or (b) being employed or concerned in or about the preparation of any instrument, neglects or omits fully and truly to set forth therein all the said facts and circumstances, is liable to a fine of 50 penalty units in the case of a corporation and 20 penalty units in any other case in addition to the amount of duty of which Her Majesty has been deprived by any such fraudulent act as aforesaid." The Solicitor has paid $18,512.89 to the Office of State Revenue, representing the fines applicable in respect of the contracts where stamp duty was evaded. The Solicitor could possibly have sought some concession from the Office of State Revenue but apparently he did not do so and chose to pay the whole of the fines. Accordingly the Solicitor has already been punished to that extent. Counsel for both parties drew our attention to a number of matters that have been dealt with by the Tribunal and its successor. Three matters which involve the alteration of documents to avoid stamp duty are of particular importance. They are: In the matter of Stephen Martin Freeman A senior practitioner altered a contract for sale by substituting the front page which bore the date 22 November 1990 instead of 22 October 1990 and submitted the altered contract for stamping. The solicitor had sent the contract for sale to his clients for execution and when it was returned the solicitor effected an exchange of contracts. The solicitor did not inform the purchasers about stamp duty until he warned one of them by a facsimile transmission on 13 December 1990 of the amount of duty and that it was payable prior to 22 December 1990. The facsimile transmission was not received and accordingly stamp duty was not paid in time. After the expiry of time for payment the solicitor informed the purchasers of the fine payable. The purchasers protested and said that they did not feel that they should have to pay the fine. The solicitor asked the clients for the normal amount of duty and said that he would attempt to resolve any fines payable. The solicitor substituted the front page of the contract and dated the contract 22 November 1990 and submitted it for stamping. The effect was to evade payment of penalty duty. The Legal Profession Disciplinary Tribunal found the solicitor of professional misconduct and the solicitor was fined $8,000.00 and ordered to pay the Law Society's costs. In the matter of George Peter Duckett White An experienced solicitor exchanged contracts on 30/10/1992, informed his purchaser client that stamp duty had to be paid within two months and when she had not paid it by 22 December 1992 again asked the client for the duty and informed her that a penalty would be payable for late payment. The client did not pay the duty in time. Settlement occurred on 22/1/93 when the client paid the stamp duty. The contract had not been dated on exchange and the solicitor dated it 24 December 1992 and personally attended at the Office of State Revenue to pay the duty as if the contract had been stamped in time. The Tribunal found the solicitor guilty of unsatisfactory professional conduct. The solicitor was reprimanded and fined $1,000.00 and ordered to pay the Law Society's costs. In the matter of Mark Christopher Gibbins An associate of a large country firm acted for the purchaser of land consequent upon the exercise of an option to purchase, on 31 May 1988. On 23 June 1988 the vendors' solicitors sent an agreement for sale, signed by the vendors to the solicitor. The agreement was dated 31 May 1988. On 15 June 1988 the solicitor advised the client of the amount of stamp duty. Early in July 1988 the solicitor again asked the client for stamp duty, together with costs and disbursements and was instructed that it would be paid in a matter of days. The client subsequently told the solicitor that the client would pay the money prior to settlement. Settlement occurred on 5 August 1988. The money i.e. costs and stamp duty was paid on 9 September 1988. The solicitor caused a new front page of the contract to be substituted for the front page on the contract and dated it 21 July 1988 in lieu of 31 May 1988 and submitted it for stamping. The solicitor admitted that his conduct amounted to professional misconduct. The Tribunal found the solicitor guilty of professional misconduct. The solicitor was fined $12,000.00 and ordered to pay the Law Society's costs. In each case the solicitor involved had altered only one contract in circumstances where attempts had been made to obtain stamp duty from the client but the client had failed to pay on time and the solicitor did something to overcome a problem brought about by the client. In the matter presently before us, the circumstances are different. In many cases the Solicitor did not ask for stamp duty until it was too late or if he did request payment of stamp duty in time, no urgency or limit for payment of duty was indicated. When duty was not paid in time the Solicitor either substituted a front page with an incorrect date shown as the date of contract or inserted an incorrect date in a contract that had not been dated on exchange. The attitude of the Solicitor shows a gross lack of regard for a solicitor's duty in respect of payment of stamp duty and constitutes a fraud on the revenue of New South Wales. His course of conduct during 1994 and 1995 was disgraceful and dishonourable. The Society sought an order that the Solicitor's name be removed from the role of solicitors. The Solicitor's behaviour certainly amounts to serious professional misconduct. The question of his removal from the roll must be considered. In the case of Law Society of New South Wales v Foreman 34 NSWLR at 408, Mahoney J A set out in his judgment the principles to be applied in deciding what orders should be made in discipline matters. In broad summary His Honour defined the principles as: 1. Protection of the public as the primary purpose, and not the punishment of the solicitor. 2. Protection of the public is not confined to protection against further default by the solicitor in question, it extends to protection of the public against similar default by other solicitors. 3. Publicly marking the seriousness of what the solicitor has done. His Honour stated that: "—- it would be wrong to confine the objects of disciplinary proceedings and the purposes to be achieved by the orders made in them strictly to matters of this kind. The purposes and objectives have traditionally been seen as having a wider operation. In the end the question to be determined is whether the solicitor is a fit and proper person to be a solicitor of the Court and the orders to be made are to be directed to ensuring that, to the extent she is not, her practice is restricted." His Honour also stated: "In deciding whether a person is a fit and proper person for this purpose, the Court may, in accordance with the circumstances, take into account matters going beyond the mere protection of the public against similar misconduct. The Court may consider the character of the practitioner, or those aspects of it relevant to the office of a solicitor. A solicitor may affirm and sincerely believe that she will not offend again. But the character of the solicitor demonstrated by the offence or otherwise – may be such that no sufficient reliance can be placed upon that affirmation. " "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." To have embarked on a course of deception that the Solicitor embarked on, in this case, must reflect upon the character of the Solicitor and on his fitness to practice law, as a solicitor. It is a privilege to practice law and the honesty of its practitioners is an essential feature of the administration of the law, not only in the Courts but in administrative areas as well e.g. payment of proper amounts of stamp duty and the lodgment of properly prepared and executed documents in the Land Titles Office. What the Solicitor did was engage in a course of conduct over a considerable period of time that was extraordinary and amounted to very serious professional misconduct. In the other cases quoted the deception of the solicitor was a one off incident where, in each case, the clients themselves contributed to the failure to pay stamp duty on time. The Solicitor was born on 11 June 1957 and was admitted as a solicitor in 1981. By the time the Solicitor had embarked on the course of deception that resulted in these proceedings, the solicitor was 37 years old and had been practising for 13 years. The Solicitor worked for the Newcastle firm of Sparke Helmore for approximately 2 years after his admission, after which he commenced practising as a sole practitioner and he remained a sole practitioner until 1 February 1996 when he amalgamated his practice with another Newcastle firm. The Solicitor is now one of three partners in the new firm. We accept that during 1994/1995 the Solicitor was a very busy practitioner with a large conveyancing practice. During the time he practised as a sole practitioner he did not employ professional staff and relied on administrative assistants and secretaries. He worked long hours and had few holidays. After the course of deception was discovered the Solicitor consulted the principal clinical psychologist employed by the Hunter Area Health Service. The psychologist provided a statutory declaration that was tendered in evidence. Amongst other things the psychologist stated:"3. Mr Chris Ingham was referred to my private practice and seen on 19 October 1995. He informed me that as a result of a Law Society audit certain irregularities had been discovered in his work and that an investigation was underway with which he was co-operating fully. He was obviously emotionally distressed and appeared to be in a significant psychological crisis. Of increasing concern to him was not so much that the irregularities had been discovered but the realisation that he'd done things that were so foreign to his philosophy of life and basic moral principles. Indeed he expressed thoughts that he couldn't see a career for himself in law and that his future was desperate and with little hope. I became concerned for his physical welfare despite his assurances and maintained regular telephone contact with him over the following two weeks along with several face-to-face visits. I considered him to be quite sleep deprived, and arranged for his local doctor to prescribe medication to assist in this area. By mid November he was still significantly depressed and quite catastrophic in his thinking. It was not until the end of November and early December that I felt comfortable that Mr Ingham was beginning to view his life with a little more hope. He had already told me of his rapid response to financially correct his wrong doing and was beginning to consider steps whereby his personal practice methods would be less vulnerable to such errors of judgment. I understand in this vein that he has now combined his practice and developed a partnership. It did appear that his sole practice pattern attempted to be all things to all people with consequent long hours and over commitment. When seen last month Mr Ingham appeared to be far more emotionally stable. He told me of the steps he had taken to establish more satisfactory professional support and the rationalisation of his financial and work commitments. It appeared to me from the outset that I was dealing with a man staggered by the realisation of his own behaviour and likely to require a great deal of professional support to avoid excessive self-castigation. Now through the initial crisis and largely over a quite severe adjustment disorder, he appears ready to deal with his fate and in what certainly appears to me as genuine contrition, make whatever amends necessary to restore his own sense of self and good standing with his profession." The practice of law is not easy and practitioners are regularly under considerable stress. It is sometimes difficult to balance the needs of proper professional standards of excellence and the needs and demands of clients. In this case the Solicitor failed to observe the standards required of him. Fourteen statutory declarations were filed by fellow practitioners from the Newcastle area. Three other statutory declarations were filed one by a barrister, another by a retired managing law clerk and another by a school teacher friend. The persons who provided the statutory declarations refer to the Solicitor's integrity, honesty, competence, courtesy and trustworthiness and state that the Solicitor's behaviour is out of character. The Solicitor has no recorded determination against him in this Tribunal or its successors and there is no record of his having been reprimanded by the Society. However the fact remains that when he was put under pressure, the Solicitor embarked on a course of action that was disgraceful and dishonourable. We are satisfied that the Solicitor is contrite and is now aware of the gravity of his offences and that he has suffered greatly for his own errors and is unlikely to offend again. We have come to the conclusion that an order removing the name of the Solicitor from the role of legal practitioners is not necessary, in this case, for the protection of the public. However, because of the Solicitor's course of deliberate conduct over a considerable period of time which amounted to very serious professional misconduct, the protection of the public, in its wider sense as stated by Mahoney JA., in the Foreman case and as a mark of the seriousness of what the Solicitor has done, we are of the opinion that the Solicitor should not be entitled to hold a practising certificate for a period of time and we propose that his practising certificate be cancelled for the time set out in our orders. The Solicitor is a relatively young practitioner. Except for a period of about 2 years when he worked for a Newcastle firm he has been a sole practitioner. He was a sole practitioner when the offences occurred. This Tribunal is of the opinion that the solicitor has learned a valuable lesson and that he is capable of resuming his place in the legal profession, as a solicitor, after the period of time during which his practising certificate is to be cancelled. It is our understanding of the Act that during the period of cancellation of the Solicitor's practising certificate he could be employed in a solicitor's office provided that he does not practise as a solicitor or hold himself out as a solicitor. Determination The Solicitor is guilty of professional misconduct. Orders 1. The Solicitor's practising certificate be cancelled from a date that is 28 days after the date of these orders. 2. A practising certificate not be issued to the Solicitor for a period of 4 years from the date of cancellation. 3. Before a practising certificate is issued to the Solicitor, the Solicitor must satisfy the Law Society of New South Wales that he has: 3.1 attended and satisfactorily completed a practice management course nominated by the Society; 3.2 attended a risk management course nominated by the Society; 3.3 undertaken and completed the required number of mandatory Continuing Legal Education units during the period of cancellation of his practising certificate that he would have been required to complete if his practising certificate had not been cancelled. 4. The Solicitor must pay a fine of $10,000 within 3 months from the date of these orders. 5. The Solicitor must pay to the Society an amount of $5,186.00 for costs, as agreed, within 60 days of the date of these orders. 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.