New South Wales Supreme Court CITATION : KRISS - v - LEGAL PRACTITIONERS ADMISSION BOARD and ANOR [2002] NSWSC 967 revised - 17/10/2002 CURRENT JURISDICTION: Common Law FILE NUMBER(S) : SC 012538/01 HEARING DATE(S) : 9,10 October 2002 JUDGMENT DATE : 18 October 2002 Plaintiff - Maurice Gordon KRISS PARTIES : 1st Defendant - Legal Practitioners Admission Board 2nd Defendant - NSW Bar Association JUDGMENT OF : Cooper AJ at 1 COUNSEL : John D Shaw (plaintiff) C. E. Adamson (2nd defendant) SOLICITORS : H.M. Symonds & Britten (plaintiff) Tress Cocks & Maddox (2nd defendant) CATCHWORDS : Legal Practitioner - Application for Admission - Barrister, Character LEGISLATION CITED : Legal Profession Act 1987 CASES CITED : Johns - v - Law Society of NSW. BC9101 924 DECISION : 1. That the appeal be allowed; 2. The subject to the condition that he undertake and successfully complete the Bar Association's Readers' Course, the application of Maurice Gordon Kriss for admission as a Legal Practitioner be approved; 3. I invite submissions as to costs; 4. Plaintiff to pay the costs of NSW Bar Association; 5.Exhibits returned (except for affidavits) IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION COOPER AJ 18 October 2002 No. 012538/01 MAURICE GORDON KRISS Plaintiff V LEGAL PRACTITIONERS ADMISSION BOARD First Defendant NSW BAR ASSOCIATION Second Defendant JUDGMENT 1 This is an appeal pursuant to Section 14 of the Legal Profession Act 1987 against the refusal of the Admission Board, to approve the application by the plaintiff for admission as a practitioner as notified by letter dated 11 April, 2001 (see annexure A to Exhibit A). 2 There are two defendants, namely the Legal Practitioners Admission Board which has filed a submitting appearance, and the NSW Bar Association which appeared by Counsel in opposition to the appeal. 3 On 20 December, 1995 the Legal Profession Disciplinary Tribunal ordered that the Plaintiff's name be removed from the role of Legal Practitioners. The current action is, in effect, an application for reinstatement as a legal practitioner. 4 The principles of Law to be applied on such an application are succinctly set out in the judgment of Samuels JA in Johns v the Law Society of NSW BC 9101 924 at pages 9 and 10:- "The principles of law which are to be applied are not in doubt. The applicant bears the onus - which is a heavy one - of satisfying the court that he should be readmitted and in order to do so he must displace the decision as to probable permanent unfitness which was the basis of his removal… In reaching its decision the court should act with the greatest caution and only on solid and substantial grounds and must depend upon its own assessment of the applicant's character, uprightness, honour and trustworthiness…….. It is, equally well established, that in discharging its responsibility to supervise the discipline of Solicitors, the court is not exercising a punitive but a protective role, having primary regard for the protection of the public interests and the interests of the profession." 5 It is in the application of these principles to the facts of a given case that difficulties arise. 6 I propose to consider this matter by seeking the answers to two questions:- a) What were the defects in character that led to the plaintiff's disbarment in December 1995? b) Has the plaintiff satisfied the court to the requisite standard that those defects no longer exist and that he is otherwise an upright, honourable and trustworthy person? Or, to put it another way, has the plaintiff satisfied the court that he has redeemed his early errors and that they did not reflect any permanent deficit of character? 7 The plaintiff was born on 28 July, 1937 and so is now 65. He came to Australia with his parents in 1947. In 1951 and 1952 he worked in the Merchant Navy and then jointed the Royal Australian Navy in 1954. He served during the Malayan Emergency, in the Indonesian Civil War and in the China/Taiwan area. He received an honourable discharge after seven years of service. 8 He then worked in the insurance industry until about 1971 when he did the Master Builder's course and became duly qualified. Thereafter he set up a factory at Mascot making modular prefabricated houses. The Mascot premises became too small for his operations and he moved to Binnaway. 9 In 1979 his first wife died. He then sold his business and moved to Sydney. 10 In June 1980 he remarried. He and his wife had a son who tragically died of a cot death while still a baby. They then adopted twins, Michael and Sonia, who had been born prematurely with developmental problems. Those problems persist to this day and are a source of stress - financial and emotional to their parents. 11 In the meantime, in 1981 the plaintiff embarked upon the external Law course at Macquarie University. He duly graduated and was admitted as a Barrister on 22 May 1987 at the age of 49. 12 The disciplinary proceedings against the plaintiff arose out of his association with Mrs Bach who, at the time, was seeking to conduct some of her affairs without her husband's knowledge. The plaintiff assisted her in this context. 13 A wiser and more experienced person would have shied away from becoming involved in this volatile domestic background. Unfortunately for the plaintiff he lacked that wisdom and experience. 14 The plaintiff first met Mrs Bach in 1988 (about a year after his admission) when he successfully defended a preference claim brought against her. In that case he had a legally aided brief. After this, he had a number of meetings with Mrs Bach in which she told him of her financial difficulties, of properties she owned and that she was frightened of her husband who had been financially irresponsible in the past, was an alcoholic and was undergoing psychiatric treatment. 15 The plaintiff gave Mrs Bach what could be described as legal advice concerning a possible claim against the State Bank and what could also be described as business advice as to how she could solve her financial problems. 16 The Tribunal found that although the plaintiff regarded Mrs Bach as a desperate and vulnerable person, his reason for giving advice was through a genuine wish to assist her and that he did not intend to prey upon her desperation and vulnerability. (Page 4 of Reasons For Decision - Annexure C to Exhibit 1) 17 The business advice given by the plaintiff to Mrs Bach involved the obtaining of bridging finance to pay for the subdivision of land owned by her at Wilton and the sale of the blocks so subdivided. The proceeds of sale were anticipated to pay off the loan and provide sufficient funds to extricate Mrs Bach from her financial difficulties. 18 Pursuant to this scheme, the plaintiff, in May, 1989 opened an account entitled – "Mr Maurice Kriss Wilton Properties Account" with the Commonwealth Bank in anticipation of the grant of bridging finance. About $20,000 was to be paid into that account to cover the cost of obtaining subdivision approval. The balance was to be paid to Walsh James, Solicitors, on trust for Mrs Bach, subject to an amount to pay off an existing mortgage. 19 The bridging finance was drawn on 9 June 1989 and $29,075.53 was paid into the account, which I shall refer to as the Wilton Property Account. 20 By November 1990, Mrs Bach had withdrawn her instructions from Walsh James and instructed her new solicitor to require that firm and the plaintiff to tax their fees. 21 Not surprisingly, the plaintiff, whose fees had been outstanding for about ten months, was quite upset. 22 On 22nd March 1991, the plaintiff drew the first cheque in payment of his fees on the Wilton Property account. At page 32 of its judgment, the Tribunal said: "In the Tribunal's opinion, the likely explanation for drawing that cheque is that the Barrister became frustrated by what he regarded as an unjust withholding of his fees and decided to use the Wilton Property Account as his own to pay his personal debts as a contra against money which he believed Mrs Bach owed. The Tribunal finds that he did so in the knowledge that he had no authority to use the money for that purpose." 23 At page 35 the judgment says:- "The Tribunal does not find that the Barrister intended to permanently deprive Mrs Bach of the unauthorised and excessive payments from the account. It accepts that the Barrister intended at some stage to account to Mrs Bach and make adjustments if necessary, but his failure to keep proper records made it difficult if not impossible to properly account. This is illustrated by his inability to substantiate the amounts he claims as reimbursement for expenses." 24 Notwithstanding these findings, the Tribunal in its judgment of 20 December, 1995 on appropriate consequential orders, said, at P. 10:- "The present case is one in which the Barrister's probity has been called into question. Although the conduct is isolated in the sense that it involves only one client, the conduct illustrates a frequency of the Barrister's self interest prevailing over his probity. When he became frustrated about payment of his fees, he committed a deliberate breach of trust to achieve part payment. When he was asked to account, and he realised he had made an overpayment and was financially stressed, he deliberately concealed the overpayment. When he responded to the Association about Mrs Bach's complaint on 12 June 1992, he masked the overpayment. Having failed to successfully contest the allegation of deliberate concealment, he gave untruthful evidence in an attempt to mitigate against the order, which would be made. This behaviour is not simply illustrative of a lack of professional judgment or a lack of proper understanding of legal ethics or a lack of understanding of the law. It was not submitted on behalf of the Barrister that he did not know that he should not take trust money without authority, that he should not conceal breaches of trust and that he should not be untruthful." 25 The Tribunal then ordered that the plaintiff's name be removed from the roll of legal practitioners, and further that he pay $2,920 to Mrs Bach by way of monitory compensation and also that he pay the Association's costs. 26 The plaintiff did pay the $2,920 but has not paid any of the Association's costs, which total some $112,000. 27 I accept that the failure to pay these costs has not been due to an unwillingness to pay them. Rather he has lacked the means to pay them. In 1993 his estate was sequestrated in bankruptcy and he was discharged in 1996. There is no suggestion that his bankruptcy involved any moral turpitude. 28 The plaintiff's only income, since about February 1998 has been Social Security pensions, First Carer's Pension and then, when he turned 65, an Age Pension. His only assets are $5000 in the bank and personal effects. He lives in a house at Portland, which is owned by his wife from whom he separated in 1996. In the current proceedings he has been represented on a pro bono basis. 29 I therefore accept the evidence of the plaintiff that he has been unable to institute a program of payments and this has been the case since December 1995. 30 There is no doubt that since December 1995 the plaintiff has done a considerable amount of hard community work, extending over many hours of each day with no remuneration. The portfolio evidencing this (Exhibit B) is most impressive. 31 He has not, however, embarked upon any business venture nor has he put himself in a position where he has had control of other person's monies. 32 Since 1995 he has been awarded the Australian Service Medal, the Australian Active Service Medal and the return from Active Service Badge. 33 Since November 2001, he has been the Secretary and Licensee of the Portland RSL Club Ltd – an honorary position. He has volunteered his services as a barman and cleaner at the Club in order to improve its financial viability. 34 However, it would be only in the course of working as a barman that the plaintiff handles any of the Club's money. 35 Exhibit H shows that in the period 1 January 2002 to 30 September 2002, the income of the Club has increased by about $31,000 and the expenses have reduced by about $40,000. 36 Apart from caring for his son, Michael, during his recurrent bouts of depression and charitable works, the plaintiff has done little else. Indeed the evidence establishes that he has had little or no time to do anything else. 37 His conduct is capable of demonstrating that the plaintiff, since 1995 has conducted himself with charity, honesty and integrity. However the defendant points to other matters, which it says, demonstrate that the defects in character, which led to the plaintiff's disbarment, are still persisting. 38 It points to the evidence of the plaintiff at the Tribunal hearing in 1995 where he said he believed he was entitled to withdraw the amounts from the Wilton Property Account and the Tribunal's rejection of that evidence. 39 Then it further points to an Affidavit of the plaintiff sworn on 25 June, 1998 (Exhibit 8) where he gave a reason for that belief which he had not given to the Tribunal. His evidence was that he had been confused when giving that evidence. In evidence before this court, he is alleged to have given a further reason, namely that in his affidavit of 1994, he was responding specifically to allegations made by Mrs Bach in her affidavit. 40 I do not regard this further reason, given in evidence before this court, as an attempt to mislead the court. Rather, it is quite capable of being an honest answer to the question put, particularly when it is realised that the plaintiff was being asked to justify something he had put in an affidavit eight years ago. 41 It is further submitted on behalf of the defendant that because the plaintiff continued to maintain that he was authorised to make the withdrawal from the Wilton Property Account, his expressions of contrition and an awareness of his wrongdoing cannot be maintained. 42 The plaintiff conceded that on the findings of the Tribunal, his conduct was totally unacceptable and he accepts the appropriateness of disbarment on the basis of those findings. 43 He is therefore aware of what is the appropriate conduct expected of a legal practitioner. 44 However, having regard to the unique situation existing between the plaintiff and Mrs Bach, he feels that all of the appropriate evidence was not brought out. 45 I am satisfied that in the circumstances of this case, this does not establish that the plaintiff is maintaining a lie. Rather it means that he genuinely believes that the full evidence was not brought before the Tribunal. 46 In my view, in the circumstances of this case it is necessary to draw a distinction between not admitting that certain conduct was improper on the one hand, and maintaining that, if all evidence had been brought out, the finding of that conduct would not have been made, on the other hand. 47 The defendant also submits that the payment made by the plaintiff of $2920 was on a "totally without admissions basis" and was paid only pursuant to the order of the Tribunal. Hence it does not demonstrate any reform in character. 48 I accept that, of itself, it shows no more than a compliance with the order of the Tribunal but that mere compliance is something in his favour. 49 The defendant also points to an alleged falsity in paragraph 8 of the plaintiff's affidavit Exhibit A where he swore that he had not practiced as a Barrister since December 1995. 50 In cross-examination, the NSW Bar Association confronted the plaintiff with an Application for a Practicing Certificate date 3 May 1996 which had been sent to him by the Association. 51 On this form the plaintiff ticked, as the category most likely to describe his then current profession as " practicing full time as a Barrister at the Private Bar". 52 The plaintiff explained this by saying that he had been advised that his appeal against the deregistration order of the Tribunal, which had been lodged by then, operated as a stay of the Tribunal's order. 53 I would interpolate here that if he held such a belief, the receipt of the form of application from the Bar Association would tend to reinforce it. 54 Exhibit 13 is a letter dated 28 June 1996, which pointed out that the application form had been sent to him in error, that he was not entitled to practice, and seeking details of his practice since 21 December 1995. 55 The plaintiff replied by letter of 2 July, 1996 (Exhibit 14) in which he said: - "It is obvious that you are unaware that soon after the legal services Tribunal made its order, an appeal was filed in the Supreme Court, which effectively stayed the order. The appeal is a hearing de novo that is to be heard by a single judge of the Supreme Court. On 9 February 1996 I sought legal advice as to my ability to practice. Mr Andrew Martin of Counsel and Mr Ken Horler QC, through my Solicitor Mr Leon Nikolaidis, informed me that there was clear authority that I was able to practice. At the time I wrote to you (28 May, 1996) I was a practicing Barrister with a current practicing certificate. At the time I made my application for renewal, I was – "practicing full time". I have enclosed the cheque returned by you and would be obliged if you would issue me with my practicing certificate as soon as possible. I have also provided you with a current certificate of insurance, a copy of which is enclosed. I would appreciate you notifying any relevant department that I am still a practicing Barrister and should receive all correspondence." 56 The Association responded on 8 July, 1996 (Exhibit 15) in these terms:- "I refer to your letter to me dated 2 July, 1996. I am aware of your appeal against the orders of the Legal Services Tribunal. The Bar Counsel disagrees with your view, that the effect of the Tribunal's order, that your name be removed from the roll of Legal Practitioner's is stayed, merely by the filing of your appeal. You have referred to legal advice supporting your view, including what you call "clear authority" in favour of your ability to practice, pending your appeal. Please urgently supply particulars of that advice and any such authority. You do not have a practicing certificate. You are, plainly conducting yourself as if you were entitled to practice as a Barrister. The Bar Council's view is that you cannot lawfully do so, by reasons of Section 25, 48B & 48C of the Legal Profession Act 1987. Unless you notify me, in writing, within 48 hours that you undertake not to practice pending your appeal (or subject to any order of the Supreme Court) then the Bar Council will consider further action, including the possibility of proceedings under Ss. 38E and 48M of the Act." 57 The plaintiff responded the next day (9 July, 1996, exhibit 16) in these terms:- "I undertake not to practice as a Barrister pending my appeal or subject to any order of the Supreme Court. My Solicitor Mr Nikolaidis has requested both from Mr Andrew Martin of Counsel and Mr Ken Horler QC for the authority on which they relied when providing this advice. Mr Nikolaidis is on holiday until 15 July, 1996. I will communicate with you after he returns." 58 I accept the evidence of the plaintiff that he then genuinely believed that he was entitled to practice and that once he received the letter of 8 July, he realised for the first time, that his belief was wrong and promptly gave the undertaking in his letter of the following day. 59 The Bar Association was critical that the plaintiff gave answers saying –"I don't recall taking work" in early 1996 and further answers that he had forgotten the episode with the application for renewal of the practicing certificate. 60 To my mind these answers are not inconsistent with each other. They are cumulative. I accept his evidence that the words of paragraph 8 of his affidavit, (Exhibit A) were not intended to mislead the Bar Association or this Court and that the omission of the events in the first half of 1996 was due to his forgetfulness due to the lapse of time, rather than a deliberate attempt to mislead. 61 The plaintiff was also criticised for his tendency to blame others. As an example was his claim that he was advised by senior and junior counsel, through his solicitor that the appeal operated as a stay of the Tribunal's order of 20 December 1995. The criticism continues that he took no steps to satisfy himself of the correctness of this advice. 62 In the circumstances, having regard to when he received it and from whom he received it, I regard his failure to take such steps as quite reasonable. 63 Criticism was also levelled at his failure to call those who were said to have given this advice. 64 I have no difficulty in finding, even without the evidence of those persons, that the plaintiff did receive such advice and acted upon it in good faith. Among the reasons for his being so satisfied are the receipt of the form of the application for renewal, his openness in ticking his category as "practicing full time as a Barrister at the private Bar", his unequivocal contention that he was entitled so to practice as set out in his letter of 2 July (exhibit 14) and his immediate change of attitude once the error was pointed out to him. 65 Further criticism was levelled at the plaintiff arising out of the dilatory conduct of his appeal from the determination of the Tribunal leading to its ultimate withdrawal in 2000. 66 The plaintiff was hoping to get further evidence that may have established his contention that he had authority to withdraw the money from the Wilton Property Account. Viewed in retrospect, the prospects of getting such evidence were little more than a forlorn hope. At the time, the plaintiff persisted. 67 I do not regard this, as indicating that the plaintiff had no appreciation that the conduct as found by the Tribunal was improper. He was hoping that with new evidence there could be a finding of lesser gravity with a less severe order against him. 68 It is now necessary to come to the answer to the second question which I posed earlier, namely, has the plaintiff satisfied the court that those defects no longer exist and that he is otherwise an upright, honourable and trustworthy person, or, to put it another way, has the plaintiff satisfied the court that he has redeemed his earlier errors and that they did not reflect any permanent defect of character. 69 The errors, which led to the plaintiff's disbarment arose out of a somewhat unique set of circumstances. He embarked upon seeking to aid a woman who was then having difficulties with her husband. He thus placed himself in a volatile domestic situation. The advice he gave and the work he did for Mrs Bach was quite reasonable and proper. 70 She, however, appears to have become reconciled with her husband and under his influence turned against the plaintiff making a number of serious allegations, which were considered and dismissed by the Tribunal. It is in this context that the plaintiff committed the acts of misconduct as found by the Tribunal. 71 In the light of all of the evidence, the plaintiff has comfortably satisfied the Court that over the past almost seven years he has lived an exemplary life. He has demonstrated integrity, honesty and probity. He has comfortably satisfied the Court that those early errors did not reflect any permanent defect in character. 72 Accordingly the Court is comfortably satisfied that this question should be answered in the affirmative. It follows that the appeal should be allowed. 73 The Bar Association submitted that if the appeal were allowed, then it should be subject to the condition that the plaintiff undertake and successfully complete the Bar Association's Readers' Course. 74 The plaintiff gave evidence that he regards such a condition as entirely proper and essential. 75 There is no doubt that there have been a number of substantial and significant alterations to the procedural and substantive law since December 1995 and that such a condition should be imposed. 76 The orders of the Court are: 1. That the appeal be allowed. 2. That subject to the condition that he undertake and successfully complete the Bar Association's Readers' Course, the application of Maurice Gordon Kriss for admission as a Legal Practitioner be approved. 3. I invite submissions as to costs. 4. Plaintiff to pay the costs of NSW Bar Association. 5. Exhibits returned (except for affidavits). ********** Last Modified: 10/23/2002 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.