The Legal Services Tribunal of New South Wales CITATION : John Clement Hawkins [1997] NSWLST 15 PARTIES : John Clement Hawkins FILE NUMBER(S) : of 1996 CORAM: Mr G Molloy (Chairperson) - Mr R. Turner - Mr D. Hoareau CATCHWORDS: Professional Misconduct - breach of s. 61 of the Legal Profession Act - Professional Misconduct - misappropriate trust moneys/moneys :- Professional Misconduct- the charging of fees to which he was not entitled or which were excessive Unsatisfactory Professional Conduct- failed to reach a reasonable standard of competence and diligence LEGISLATION CITED: Legal Profession Act 1987 CASES CITED: Veron (1966) 84 WN 136 ; May v O'Sullivan (1955) 92 CLR 653 DATES OF HEARING: 15 September 1997 DATE OF JUDGMENT: 09/15/1997 LEGAL REPRESENTATIVES: Mr C.M. Simpson No appearance for the Solicitor JUDGMENT: The Tribunal found the solicitor guilty of wilful contraventions of the statutory requirements in relation to trust money and of misappropriating clients' funds. The Tribunal determined that the solicitor was guilty of professional misconduct and ordered that his name be removed from the Roll of Legal Practitioners. He was ordered to pay the Law Society's costs. T his Tribunal has before it an Amended Information filed by the Council of the Law Society against the solicitor in which the Council alleges numerous breaches of sections 61(1)(a) and 61(2) of the Legal Profession Act 1987, misappropriation by the solicitor, wilful contravention of regulations 7(1), 7(2), 7(6) and 8(3) of the Legal Profession (Trust Account and Controlled Money) Regulation 1988 and, in other circumstances, the charging of fees to which he was not entitled or alternatively which were excessive and, in one case, the solicitor failed to reach a reasonable standard of competence and diligence within the terms of section 127(2), being the definition of "unsatisfactory professional conduct". The evidence before the Tribunal is voluminous and discloses numerous matters where the solicitor received trust moneys and failed to pay those moneys into a general trust account in circumstances where he did not hold a direction to deal with them otherwise; where he held trust moneys for excessive periods of time (in one case from March 1988 to June 1993); where he failed to pay moneys as directed under a will to the beneficiary; where he breached a trust imposed upon him in his capacity as executor or trustee of the estate of a deceased person and paid to himself the trust moneys in breach of the trust; where moneys held in trust were paid to himself in circumstances where the solicitor purported to pay those moneys in satisfaction of costs and disbursements due to him when no costs and disbursements were owed by the client; where the solicitor deposited trust moneys into his general or office account; where he withdrew money from accounts without authority; where, when acting as executor/trustee of an estate, he charged both commission and professional costs; and so on. It is to be noted that there are 36 separate complaints against this solicitor, nearly all involving matters of breach of trust, most constituting wilful breaches of the sections of the Act and Regulations to which we have made reference and some involving a complete failure to practise law at a standard of competence and diligence that a member of the public is entitled to expect from a reasonably competent legal practitioner. Two examples of this latter category are his failure, in the Estate Late J M Fraser, to even maintain a file or maintain records of receipt and disbursement of the proceeds of the sale of an estate asset and, in the matter of P J Emanuel, his failure to take adequate steps to ensure that the requirements of an incoming mortgagee on the purchase by his client of a strata title unit were satisfied in time in circumstances where the solicitor, with the application of proper diligence, could have met the requirements. In addition to all of the above, there are obvious and consistent technical breaches of the trust account regulations. It is plain on the evidence that the solicitor's conduct constitutes wilful breaches of the said sections of the Act and Regulations. As such, they clearly constitute professional misconduct. In addition, the various individual trust account breaches coupled with the misappropriations constitute professional misconduct in the common law sense of being disgraceful and dishonourable and we are further of the view that the totality of the solicitor's conduct also amounts to a substantial or consistent failure to reach reasonable standards of competence and diligence sufficient for it to amount to professional misconduct within the meaning of that term within section 127(1)(a) of the Act. In deference to the careful submissions put to us by Mr Simpson of counsel for the Law Society we wish to make observations about two of the matters of complaint. In the Estate of M Allen (complaints 15-17) the solicitor received moneys in the order of about $16,313.75. He kept no file but maintained a trust ledger for the matter. By 8 January 1991 he closed the trust account and transferred $6,393.16 to an account in his own name. He added $8,000 of his own money to this new account and then withdrew from it $6,000, closed the account and transferred the then balance back into his trust account. Mr Simpson properly raised the question that there may be no direct evidence that the solicitor had received the benefit of the moneys withdrawn and referred us to Re Veron (1966) 84 WN 136 and May v O'Sullivan (1955) 92 CLR 653. The onus, of course, does not switch from the Law Society to the solicitor and the principle is that the burden of proof is on the Society to the Briginshaw standard. In our view, the Society has, in this circumstance, discharged that onus. We have formed a clear view on the above facts that there has been a misappropriation of the moneys withdrawn. There are no documentary claims for costs, there are no records of the reason for the payment (in total $16,314.75), there is no file, the account from which the payments were made was in the name of the solicitor and we are driven to the conclusion that the Society has made out its case. The second observation pertains to the matter of Emanuel to which reference has been made above. The evidence clearly supports a finding of unsatisfactory professional conduct. If it were the only matter before us then it would be so limited. However, in our view, and although it is the only matter that does not involve a trust element, coupled with the other matters and the matters referred to in the investigator's report (which was before us and to which we make reference later) there is indicated a consistent failure to reach reasonable standards of competence and diligence within the meaning of "professional misconduct" in section 127(1)(a) of the Act. The Tribunal is satisfied on the evidence admitted and at the requisite standard of proof that the solicitor is guilty of professional misconduct in relation to each of the complaints and in relation to the totality of the complaints. The solicitor was born 29 January, 1941. We understand that he is divorced and has negligible assets. The solicitor was admitted to practice on 24 November, 1967. It cannot be said by any means that he was a novice and did not understand what he was doing. It is significant that he has not filed any Reply to the Information and has not sought to appear to deny the allegations. He practised under the name of John C. Hawkins, Henderson & Co. and the registration of that business name expired on 22 October, 1991 and he continued to practice thereafter using that unregistered business name in breach of the relevant legislation. On 20 May, 1993 the Law Society Council appointed an investigator, on 5 November 1993 the Law Society cancelled the solicitor's practising certificate, on 5 November, 1993 Justice Ireland in the Supreme Court appointed a receiver of the trust property of the solicitor. The Tribunal had before it the statutory declaration of the investigator who was subsequently appointed receiver. That declaration annexed to it the investigator's report to the Law Society which makes for sorry reading. It is plain from that report, and without going into the details, that the solicitor's conduct of his practice showed a clear failure to understand his obligations as a practitioner and his duties to his clients and to the Law Society and the profession as a whole. For example, the solicitor was unable to produce his file register, any office account client register and current and completed files in which business had been transacted since 1 January, 1993. He produced a trust account receipt book in which the original receipts remained in the book and all receipts were titled "General Account" instead of "Trust Account". Apparently various files have been destroyed and the practice appears to have been conducted in a very non-professional and unbusinesslike manner. His income appeared to be so low that he was entitled to unemployment benefits. He carried on his practice in the latter years from a single room with no staff and wrote letters and accounts by hand. Perhaps he should simply have understood that the profession of the law consists of not only the ability to practice law but it is also a business and perhaps the lack of appreciation of that elementary fact may have led the solicitor off the straight and narrow path and into error, when a greater appreciation of the business side of legal practice might have led him to conclude that his talent lay in a profession or calling other than legal private practice. Finally, we should observe that on 8 April, 1997 the solicitor pleaded guilty to a charge of fraudulent misappropriation of $44,670.17 (trust moneys in the estate of HM Sutherland [Complaint 14]) for which he was sentenced to two years' imprisonment to be served by periodic detention. The Tribunal is satisfied this solicitor is not a fit and proper person to remain on the roll of legal practitioners in this state. Consequently, the tribunal makes the following Orders: (1) The name of John Clement Hawkins be and the same is removed from the roll of legal practitioners in New South Wales. (2) The solicitor pay the costs of the Law Society as agreed or as determined by the Tribunal pursuant to section 171E of the Legal Profession Act 1987. (3) Liberty to either party to apply if the parties are unable to agree on the quantum of costs to be paid. 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.