Council of the Law Society of New South Wales v Gillroy [2013] NSWADT 87

Administrative Decisions Tribunal New South Wales Medium Neutral Citation: Council of the Law Society of New South Wales v Gillroy [2013] NSWADT 87 Hearing dates: 12 February 2013 Decision date: 24 April 2013 Before: Deputy President D Patten S Hale, Judicial Member C Bennett, Non-judicial Member Decision: 1. That the name Robert Wilcox Gillroy be removed from the local roll of legal practitioners. 2. That the respondent pay the costs of the applicant assessed at $4,500. Catchwords: Professional Misconduct - misappropriation of cheques - false and misleading information to clients - failure to assist Law Society investigation Legislation Cited: Legal Profession Act 2004 Cases Cited: Allinson v General Council of Medical Education and Registration [1894] 1 QB 750 Re Veron; Ex parte Law Society of NSW (1966) 84 WN (Pt 1) (NSW) 136 Category: Principal judgment Parties: Council of the Law Society of New South Wales (Applicant) Robert Wilcox Gillroy (Respondent) Representation: Ms C Groenewegen and Ms Anne-Marie Foord (Applicant) No appearance (Respondent) File Number(s): 122009

reasons for decision 1By application filed on 28 March 2012 the applicant seeks orders that the name of the respondent, a solicitor Robert Wilcox Gillroy be removed from the roll, that he be ordered to pay a fine and that he pay the costs of the proceedings. 2It was alleged that the respondent was guilty of professional misconduct in respect of two matters in which he was engaged as a solicitor, namely those involving Mr Allen Raymond Turnbull and Ms Leonie M Cutcliffe. It was also alleged that his failure to comply with a notice issued under s 660 of the Legal Profession Act 2004 (the Act) and his failure to assist the applicant in the investigation of a complaint constituted professional misconduct. 3The application contained detailed particulars to which the respondent filed an unverified reply signed by his then solicitor, Mr Claudius Bilinsky. When the matter came before the Tribunal for directions on 5 December last, the respondent was represented by a solicitor, Mr L Kramer. There was a direction that the respondent file his affidavit evidence by 14 January 2013 and the matter was fixed for hearing on 12 February 2013. 4On 16 January, Mr Bilinsky filed a Notice of Ceasing to Act and when the matter was called on for hearing before us on 12 February there was no appearance by or on behalf of the respondent nor had any affidavit evidence been filed on his behalf. In this connection we refer to the observations of the Full Court of the Supreme Court in Re Veron; Ex parte Law Society of NSW (1966) 84 WN (Pt 1) (NSW) 136 at p 141 and following. 5The applicant was represented at the hearing by Ms Cora Groenewegen. She read the affidavits of James Sofiak sworn 13 February 2012, Anne-Marie Foord sworn 20 March 2012, A R Turnbull sworn 16 March 2012, Janice Norris sworn 16 March 2012, Leonie Cutcliffe sworn 29 March 2012 and Brett Gilbert sworn 29 March 2012. As none of the statements made in any of the affidavits was challenged by cross examination or evidence adduced on behalf of the respondent, we accept the truth of them. 6Mr Allen Turnbull was seriously injured in a motor vehicle accident on 1 February 2007. He consulted the respondent, then a member of the firm GWM Lawyers, at his Port Macquarie office in June 2007 and instructed him to pursue his rights apparently under both the Workers Compensation Act and the Motor Accidents Act. The respondent also had an office at Wauchope. 7In June 2009, Mr Turnbull, accompanied by his friend Ms Jan Norris, attended the respondent's office at Port Macquarie and was told by him: I have a good understanding with the insurance company guy and I am sure it is going to be finished by the end of the month. 8 What transpired next is related by Mr Turnbull: During the following week I received a phone call from Mr Gillroy. He said words to the following effect: There's something wrong with what you signed last week. You need to come in urgently and sign the documents again. Come in as quick as you can. I'll leave the documents at the front desk and you can sign them there. Shortly afterwards Jan and I drove to the office of GWM Lawyers. Jan stayed in the car as I went inside to sign the documents. I did not read the documents. I do not know what they were. There were tags on the documents directing me where to sign. I signed the documents. I did not see Mr Gillroy. Annexed at page 4 of my Affidavit and marked 'A' is a copy of a document entitled 'ACKNOWLEDGEMENT'. Annexed at page 5 of my Affidavit and marked 'B' is a copy of a document entitled 'TAX INVOICE'. Although the signature on the Acknowledgment appears to be mine, the first time I saw either of these documents was when Brett Gilbert showed them to me after retrieving the file from Mr Gillroy in April 2010. 9The acknowledgment annexure 'A' reads: ACKNOWLEDGEMENT I ALLEN TURNBULL HEREBY acknowledge receipt of Tax Invoice from GWM Lawyers dated 12 June 2009 in the sum of $26,000.00 in relation to file 17895 MVA Personal Injury Claim. Dated: 12/6/09 Signed: Allen Turnbull 10The document described as a "Tax Invoice" was in these terms: 12 June 2009 Mr A Turnbull (address) Our Ref: Bob Gillroy: 17895 TAX INVOICE FINAL MEMORANDUM OF COSTS AND DISBURSEMENTS RE: MVA - PERSONAL INJURY CLAIM To our professional costs for submission re: Compensation claim to date $23,636.36 GST on professional costs $ 2,363.64 TOTAL $26,000.00 Yours faithfully Bob Gillroy 11Mr Turnbull heard nothing more until he telephoned the respondent in September 2009 to ask what was happening. The respondent said to him: It has lost the momentum. The guy I have been dealing with has been taken over by a female above him and she has squashed it. 12In the following months Mr Turnbull made a number of attempts to contact the respondent by telephone. All these attempts were unsuccessful and the respondent returned none of his calls. 13In August 2010 when Mr Turnbull sought to obtain a health care card from Centrelink, he was told he did not qualify as he had received $25,050 in June 2009. Further inquiries disclosed that the insurance company Allianz had on 27 August 2009 sent a cheque payable to Mr Turnbull to the address PO Box 425 Wauchope, that being the postal address of the respondent's Wauchope Office. 14Mr Turnbull immediately made an appointment to call upon Mr Gillroy at Port Macquarie. He went there with Ms Norris and there was the following conversation: Me: I am aware that there is a payout. Mr Gillroy: I told you about that. Me: No, you did not. Mr Gillroy: I told you about that. Jan: Who was the cheque made out to? Mr Gillroy: GWM Jan: To my knowledge it was made out to Allen Raymond Turnbull. Where did the money go? Mr Gillroy: It went to ongoing costs. I'm sorry I do not have your file here. I will fix everything up for Centrelink. I need you to sign something so that I can access your information. 15According to Mr Turnbull's affidavit: Mr Gillroy then quickly left the boardroom. He returned about five minutes later with a document. He stood over me and told me to sign it. Neither Jan nor I read the document. I signed the document. I did not know what I signed. 16It seems likely that the document Mr Turnbull signed was an undated Authority annexed to his affidavit: AUTHORITY TO TRANSFER I, Allen Turnbull of 18 Rocks Ferry Road, Wauchope HEREBY AUTHORISE and direct that the sum of $26,000.00 be transferred from the Trust Account of GWM Lawyers to the general account to meet costs for the Common Law file in part. I direct that, should a cheque be received for a sum less than $26,000 that that amount can be paid direct to GWM Office Account. Dated: Signed: Allen Turnbull 17Shortly after this meeting with the respondent, Mr Turnbull consulted another solicitor, Mr Brett Gilbert, and on 19 May 2010 Mr Gilbert handed him a trust cheque drawn on the account of Garrett Walmsley Madgwick Pty Ltd for $22,545. 18The affidavit of Mr Sofiak, a Trust Account Investigator for the applicant, establishes that on 27 August 2009 Allianz sent a cheque payable to Mr Turnbull to the Post Office box address of the respondent and on 29 August sent to Medicare a cheque for $2,505. The affidavit reveals that the cheque from Allianz in favour of Mr Turnbull was wrongly converted by the respondent and paid to the credit of his firm's trust account. It was within days withdrawn from the trust account and paid to the credit of the firm's office account. 19In May 2010, as appears from documents annexed to Mr Sofiak's affidavit, $22,545 was paid by the respondent's private company Slartibartfast into the trust account ledger for Mr Turnbull and then paid out by cheque drawn in his favour, that cheque being subsequently handed to Mr Turnbull by Mr Gilbert. 20On 27 August 2010 Mr Sofiak interviewed the respondent at his office: As soon as I greeted Mr Gilroy (sic) I said "Before we start I want to look at trust ledger numbered 17896, the office bank statements for September and October 2009 and the office cash book for September and October 2009". Mr Gilroy (sic) said "I will get the staff to get that for you. I have to go to Court and my client has arrived". He took me into one of the conference rooms and said "I have had my staff dig everywhere to find this file" and he produced file numbered #17896 Allen Turnbull Workers Comp Claim. He opened the file and extracted from the top an undated 'Authority To Transfer' $26,000 from the Trust Account of GWM Lawyers to the general account to meet costs for the Common Law file in part. This document was purportedly signed by Allen Turnbull. He also extracted from the top of the file a Tax Invoice dated 12 June 2009 addressed to Mr A Turnbull for $26,000. Although the tax invoice refers to "FINAL MEMORANDUM OF COSTS AND DISBURSEMENTS RE: MVA - PERSONAL INJURY CLAIM" it then goes on "To our professional costs for submission re: compensation claim to date $23,636.36 GST on professional costs $2,363.64 TOTAL $26,000. (refer to annexure pages 9 & 10). Mr Gilroy (sic) said "My heart jumped when I saw it was not dated". He then pulled out 2 Complying Agreements and said "There are two S66 Recovery Complying Agreements. One was signed on 5 June 2009 which had been laying around since 2 May 2008. Allianz rejected this one because something had changed and sent a new one to sign up. I called them on 12 June 2009. Allen signed this and I sent it in on 12 June 2009. Allen also signed the authority to transfer to the Motor Vehicle Accident action. (refer to annexure pages 11-25). I said "Both Allen Turnbull and his friend Jan have given me signed statements to the effect that you told them that the matter had not settled and the first they knew that there had been a payment was when they went to Centrelink for a Health Care Card". Mr Gilroy (sic) said "I strongly and adamantly dispute what they are saying. I said "How do we fund this in the future". I suggested we use the workers compensation money and Allen agreed. I have to go to Court now. I will get one of the girls to get you whatever you need". 21Mr Gilbert, a solicitor practising in Port Macquarie, said that he was consulted by Mr Turnbull on 13 April 2010. An Authority was signed directed to the respondent for the release of Mr Turnbull's file. Thereafter according to his affidavit: 6. On 15 April I rang Mr Gillroy. He: a. gave me a brief rundown about the case; and b. confirmed that the money was sitting in his Trust Account; and c. stated that he would forward the file and the cheque shortly. 7. In early May 2010 my staff was advised that the file was available for collection and we collected the file. 8. On about 19 May 2010 I received a GWM Trust Account cheque for $22,545.00 payable to Mr Turnbull. I gave the cheque to Mr Turnbull. 9. Acting on the instructions of Mr Turnbull, on 19 May 2010 I requested from Mr Gillroy a copy of a Trust Statement and an Itemised Bill of Costs in relation to Mr Turnbull's matters. I followed up this request on 21 June 2010. 10. To date I have not received a response from Mr Gillroy. 22The statement made by the respondent to Mr Gilbert was false in at least one respect. As at April 2012 the respondent held no monies in a trust account on behalf of Mr Turnbull. 23In our opinion the facts recited in respect of Mr Turnbull's matter establish a number of matters capable of constituting professional misconduct including misappropriation of the cheque drawn by Allianz in favour of Mr Turnbull for $22,545, failure to keep Mr Turnbull truthfully informed as to the progress of his matters, deliberately making false and misleading statements to Mr Turnbull and making an untrue statement to Mr Gilbert knowing it was untrue. 24Ms Cutcliffe was also seriously injured in a motor vehicle accident. The accident occurred in February 2003 and she consulted the respondent's firm in April of that year. 25Initially she dealt with a Mr Franey but after about 18 months the file was transferred to the respondent. At no time did she sign a costs agreement or receive any information as to the costs and fees she would be charged. At no time did she receive a tax invoice or account from the firm. 26In January 2006 the respondent telephoned her and said: The cheque has arrived from the insurer. I need to retain $10,000.00 to continue the case. Are you happy for me to put the rest of the money into your account? 27Ms Cutcliffe said that she did not question the respondent's entitlement to retain the sum of $10,000 on account of his costs but she received no documentation in respect of them. 28In August 2010 being dissatisfied with the progress of her case, she arranged for Mr Gilbert to take over her matter. 29As appears from the report annexed to the affidavit of Mr Sofiak, the respondent on 9 January 2006 received from the Workers Compensation Insurer of Ms Cutcliffe's employer a cheque for $32,850 in her favour. The respondent misappropriated this cheque by paying it into his firm's trust account, recording the receipt as "settlement monies". He drew a cheque in favour of Ms Cutcliffe for $22,850 and deposited $10,000 into his firm's office account recording "Funds to be used for payment of c/d re Motor Accident file 14615 as per client authority". 30Although Mr Gilbert has sought on Ms Cutcliffe's behalf the recovery of the sum of $10,000 misappropriated by the respondent, he has not to date been successful. 31The misappropriation by the respondent of the cheque drawn in Ms Cutcliffe's favour and his application of $10,000 of the proceeds of the cheque towards his own costs without authority, are acts capable of constituting professional misconduct. 32According to the affidavit of Ms Foord, Manager of the Professional Standards Department of the Law Society of New South Wales, the respondent's conduct in relation to Mr Turnbull's case came to the notice of the Law Society in September 2010 and in relation to Ms Cutcliffe via the Legal Services Commissioner (to whom she had made a complaint) about one month later. 33Thereafter the Law Society corresponded with the respondent but he failed to respond to the complaints despite several reminders. On 18 February 2011 the Society issued a formal notice under s 660 of the Act which was personally served on the respondent on 2 March 2011. He failed to respond. 34He also failed to respond to any of some eight further letters written by the Law Society. 35The respondent's failure to comply with the notice served upon him under s 660 of the Act and his failure to assist the Law Society's investigation are capable of constituting professional misconduct. 36The test of whether a legal practitioner has been guilty of professional misconduct is that promulgated in Allinson v General Council of Medical Education and Registration [1894] 1 QB 750, namely whether the practitioner has behaved in a manner that would reasonably be regarded as disgraceful or dishonourable by his or her professional brethren of good repute and competency. 37Applying the Allinson test to the findings we have made against the respondent, we are satisfied to the requisite standard that he is guilty of professional misconduct. In our opinion the misconduct is so grave that in the public interest the only proper order to make is that his name be removed from the local roll of legal practitioners. 38He should also be ordered to pay the costs of the applicant which we assess as requested by Ms Groenewegen at $4,500.