Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Council of the Law Society of New South Wales v Fulham [2015] NSWCATOD 101 Hearing dates: 15 June 2015 Decision date: 25 September 2015 Jurisdiction: Occupational Division Before: S Hale Senior Member J Pheils Senior Member E Hayes General Member Decision: 1. Finding of Professional Misconduct 2. Orders : (i) that Matthew John Fulham is guilty of professional misconduct (ii) that the name of Matthew John Fulham be removed from the local roll (iii) that Matthew John Fulham pay the costs of the Council of the Law Society of New South Wales as agreed or assessed. Catchwords: Professional misconduct – misappropriation of trust funds – fitness to practise Legislation Cited: Legal Profession Act 2004 Cases Cited: Council of the Law Society of New South Wales Bar Association v Butland [2009] NSWADT 177 The Law Society of New South Wales v Jones Unreported NSW CA 333 of 1977 Category: Principal judgment Parties: Council of the Law Society of New South Wales (Applicant) Matthew John Fulham (Respondent) Representation: Solicitor: L Pierrotti (Applicant) Eakin McCaffrey Cox (Respondent) L Muston (Office of Legal Services Commissioner) File Number(s): 1420332 Publication restriction: NIL REASONS FOR DECISIOn 1. By application filed on 4 November 2014 the Council of the Law Society of New South Wales ("the Council") seeks a finding of professional misconduct and consequential orders against Matthew John Fulham ("the solicitor"). 2. In support of its application the Council relied on two grounds namely: 1. That the solicitor had misappropriated trust funds; and 2. That the solicitor had misappropriated money belonging to the law practice of Dignan & Hanrahan. 1. The solicitor admitted each of the grounds and the particulars furnished in support of those grounds. He expressly did not contest the orders sought by the Council namely, the removal of his name from the role and costs and signed an Instrument of Consent made under s564 of the Legal Profession Act 2004 ("the Act") to which was attached an Agreed Statement of Facts such instrument being filed in the Tribunal on 4 March 2015. The Instrument was executed by the Council, the Legal Services Commissioner and by the solicitor. 2. On 15 June 2015 the Tribunal heard this matter. Mr Pierrotti appeared for the Council, Ms Muston appeared for the Legal Services Commissioner who became a party to the proceedings pursuant to Section 559(5) of the Act. Ms Shaw, solicitor of Eakin McCaffrey Cox appeared for the respondent who was present with his solicitor. 3. It was noted that all parties to the Instrument consented to the Tribunal making a finding that the conduct of the solicitor, as particularised in the Agreed Statement of Facts, amounted to Professional Misconduct. Mr Pierrotti formally requested the Tribunal to make orders in terms of the Instrument of Consent. Ms Muston supported Mr Pierrotti's request as did Ms Shaw on behalf of the solicitor. 4. At the conclusion of the hearing, the Tribunal made the orders set out in the final paragraph of these Reasons for Decision but indicated that it would publish its Reasons at a later date and that the orders made on 15 June 2015 should not operate until the publication of those orders. These are those Reasons. 5. At the outset of the hearing, the Tribunal indicated to the parties, in accordance with the discretion given to the Tribunal under s564(10) of the Act when deciding whether to make orders pursuant to the Instrument of Consent, it wished to conduct the hearing in the usual manner before reaching its conclusion. In taking this approach, the Tribunal was assisted by the comments of the Tribunal in Council of the Law Society of New South Bar Association v Butland [2009] NSWADT 177 at paragraphs 29 to 31, 33 and 35 as to the matters to be taken into account in deciding whether to make the Orders referred to in the Instrument of Consent. 6. The evidence placed before the Tribunal in support of the Council's application consisted of an Affidavit by A-M Foord sworn 20 October 2014 together with an Affidavit by J E Mitchell sworn 14 August 2014. No objection was taken by the solicitor to the material contained within those two Affidavits. THE INSTRUMENT OF CONSENT AND AGREED STATEMENT OF FACTS 1. The Grounds particularised in the Agreed Statement of Facts were in identical terms to the grounds contained in the Council's original application. 2. Section 564(1) and (10) of the Act makes plain that the Tribunal has a discretion whether or not to make orders consented to in an instrument of consent under that section. The Tribunal does not act as a 'rubber stamp' nor is it constrained by the parties agreement, however, the consents of the parties and the Commissioner are matters that deserve significant weight. 3. The Agreed Statement of Facts is set out below in its entirety but for the actual names of the various clients of the subject law practice which have been anonymised at the request of the Council in the interests of privacy for those persons who were family law clients of the solicitor. The Tribunal notes that the special nature of family law proceedings, often involving children, requires that a balance be struck between the need for open justice and a family's right to privacy and for that reason Section 121 of the Family Law Act, 1975 prohibits the publication of proceedings that identify persons or witnesses involved in family law proceedings. The Tribunal is of the view that this same courtesy should be extended to those family law clients with whom the solicitor was dealing at the time so that their identity can be protected following the publication of these Reasons and hereby invokes its inherent power in this regard. Agreed Statement of Facts re Matthew John Fulham In respect of the following ground of complaint Matthew John Fulham ('the solicitor') engaged in professional misconduct as set out in the following allegation: Grounds of complaint 1. The Solicitor has misappropriated trust funds. 2. The Solicitor has misappropriated money belong to the law practice of Dignan & Hanrahan. Particulars of Grounds of Complaint In these Particulars: "the Solicitor" means Matthew John Fulham "the Society" means The Law Society of New South Wales The solicitor was employed by Dignan & Hanrahan ("the Law Practice") from 21 September 2009 until 21 May 2013. The Solicitor maintained two (2) personal accounts with Macarthur Credit Union Ltd, being: 1. Account number 61257 ("the Solicitor's Account"); and 2. Account number 66503 ("the Solicitor's Second Account"). The Law Practice maintained a trust account with the ANZ Bank being BSB 012 556 – Account number 2585 66191("the Law Practice's trust account"). A. Client 'A' 1. The firm acted on behalf of Client A ("Client A") in respect of: i. Custody proceedings in the Federal Circuit Court at Sydney ("Custody Proceedings"). ii. Divorce proceedings in the Federal Circuit Court at Parramatta ("Divorce Proceedings"). 2. Client A made the following payments to the Solicitor on account of legal costs and disbursements: Date of payment Amount paid Means paid December 2012 $255 Cash February 2013 $800 Cash 9 March 2013 $500 Cash 27 March 2013 $650 Cash 3 April 2013 $640 Cash 6 May 2013 $250 Direct deposit 15 May 2015 $100 Direct deposit Total $3195 3. The direct deposits were made into the Solicitor's Account. 4. None of the above funds paid by Client A and referred to in paragraph 2 above were received by the Law Practice. 5. Subsequently and on the following dates, Client A made the following additional payments into the Law Practice's trust account: i. $100 on 27 May 2013 ii. $100 on 6 June 2013 These last two payments by Client A were in final response to the Solicitor's advice that he remained indebted to the Law Practice for $550. 6. On 6 February 2013, funds totalling $800 were withdrawn from the Law Practice's trust account ledger for matter No. 210360 (Ms R) by a cheque requisition described as "filing fee" (being cheque no. 51866). The payee was recorded as "Collector of Public Monies". The handwriting and signature on the cheque requisition was the Solicitor's. 7. The sum of $800 withdrawn from matter no. 2110360 (Ms R) was not for that matter but was for payment of the filing fee in the Divorce Proceedings. 8. The Solicitor required the funds for the filing fee as Client A had paid the filing fee but the Solicitor had retained it for his own benefit. B. Client 'B' 1. Instructions were provided by Client B ("Client B") to the Solicitor to act on his behalf in respect of the following matters: i. Custody arrangements for his children and adjustment of property interest in the Family Court of Australia at Parramatta ("Custody and Property Proceedings"). ii. Application for Divorce in the Federal Circuit Court at Parramatta. iii. Preparing a Will for Client B. iv. Apprehended violence order. 2. On 20 September 2010, a sum of $2,700 was paid by Client B and deposited into the Law Practice's trust account. 3. The solicitor admitted he received the sum of $11,881.05 in cash from Client B and did not account to the Law Practice for that money. C. Client 'C' 1. Sometime in March 2013 instructions were provided by Client C ("Client C") for the Solicitor to act on her behalf with respect to the adjustment of property interests and parenting issues with her former partner, Mr C. No formal Court proceedings had been commenced by correspondence had been exchanged with the solicitor for Mr C. 2. Client C paid a total of $5,275 to the Solicitor in cash and also by direct deposit. These moneys were deposited into the Solicitor's Account and not accounted for to the Law Practice. 3. The Solicitor has admitted receiving the sum of $5,275 from Client C and not accounting to the Law Practice for that money. D. Client 'D' 1. Instructions were received by the Solicitor to act on behalf of Client D in proceedings relating to an Application for an Apprehended Violence Order by the former partner of Ms G in the Local Court at Liverpool ("AVO Proceedings"). 2. Ms G paid the sum of $2,125 by way of direct deposit to the Solicitor on behalf of Client D and in connection with AVO Proceedings. These monies were paid direct to the Solicitor's account. 3. On 18 December 2012, Client D paid the sum of $2,750 by way of an electronic funds transfer payment to the Law Practice's trust account. 4. On 19 December 2012, the Solicitor generated Tax Invoice No. 6319 in the sum of $2,090 for "attendance at Court" in the AVO Proceedings, including disbursements (recorded as counsel's fees) in the sum of $1,100. 5. Subsequently a transfer of funds requisition [in the sum of $600] was completed and signed by the Solicitor for payment to a Ms S of Counsel via direct deposit into a nominated account, being the Solicitor's Second Account. 6. In support of the invoice referred to in paragraph 5 above, the Solicitor prepared a memorandum of fees dated 10 April 2013 in the sum of $660 allegedly sent by Ms S of Counsel. The Memorandum of Fees for work allegedly undertaken by Ms S of Counsel was provided by the Solicitor to the accounts clerk. 7. Ms S of Counsel was not briefed in the AVO Proceedings. 8. On 12 April 2013, the subsequent payment of $600 was made by direct deposit into the Solicitor's Second Account. Ms S of Counsel was still not briefed in this matter. 9. The solicitor has admitted that: i. He generated tax invoice no. 6319 dated 19 December 2012 in the sum of $2,090. ii. Ms S of Counsel was not briefed and was not aware of the AVO Proceedings. iii. He completed and signed the transfer of funds requisition in the sum of $1,100 for payment into the Solicitor's Second Account. The requisition is false in that it claims payment to Ms S of Counsel when she was not briefed on the matter and further false in that the alleged details of Counsel's bank account were the personal account details of the Solicitor's Second Account. iv. He prepared a memorandum of fees dated 10 April 2013 in the sum of $660 allegedly sent by Ms S of Counsel. He submitted a false memorandum of fees with details of payment totalling $660 to be made to his personal bank account. E. Client 'E' 1. Instructions had been received for the Solicitor to act on behalf of Client E ("Client E") in respect of an urgent application in the Local Court at Campbelltown seeking orders that his five year old daughter live with him. An application and supporting Affidavit was prepared by the Solicitor for filing. 2. Client E paid a total sum of $2,640 directly, in cash, to the Solicitor – as to $1,650 on 30 April 2013 and of $990 on 1 May 2013. 3. The Solicitor had admitted that the sum of $2,640 was appropriated by him and not paid into the Law Practice's trust account. 4. The Application and Affidavit were not filed by the Solicitor with the Local Court. F. Client 'F' 1. Instructions were received to act on behalf of Client F ("Client F") to file an Application in the Federal Circuit Court of Australia seeking orders pursuant to the Family Law Act, 1975. An Application and supporting Affidavit was prepared by the Solicitor, but not filed. 2. Client F paid do the Solicitor the sum of $1,980 - $1,480 of which was deposited directly into the Solicitor's Account on 11 April 2013 and the balance - $500, being paid to the Solicitor in cash. 3. The Solicitor has admitted receiving the sum of $1,980 by way of cash (totalling $500) and direct deposit (totalling $1,480) from Client F when he was an employee of the Law Practice and did not account to the Law Practice for that money. G. Client 'G' 1. Instructions were received by the Solicitor to act on behalf of Client G ("Client G") in relation to the issue of care arrangements for his children pursuant to the Family Law Act, 1975. 2. Proceedings were commenced in the Local Court at Campbelltown and thereafter transferred to the Federal Magistrates Court at Parramatta ("Initial Proceedings") where they were finalised by orders made on 20 November 2012 ("Orders"). 3. In relation to the Initial Proceedings, the sum of $700 was paid by Client G into the Law Practice's trust account on 6 December 2011. 4. On 7 December 2011, a cheque in the sum of $243 was drawn from the Law Practice's trust account for the filing of Client G's Initiating Application in the Initial Proceedings. 5. When the matter was subsequently transferred to the Federal Magistrates Court, a further $243 was withdrawn from the Law Practice's trust account on 18 September 2012. This second sum was subsequently repaid into that trust account on 21 September 2012. 6. On 21 September 2012 a further sum of $255 was drawn from the Law Practice's trust account payable to the Collector of Public Monies on account of "filing fees". This subsequent filing fee did not relate to Client G's matter as there was no further Application filed on his behalf in the Federal Magistrates Court. The Solicitor had prepared the cheque requisition and it was false. 7. The parties, pursuant to Orders made, undertook DNA testing for which Client G was ordered to pay. 8. Two cheque requisitions by the Solicitor and drawn to the "Sonic Clinical Institute for DNA Testing", in the sum of $940 and $90 (totalling $1,030) respectively, were presented against monies held in the Law Practice's trust account in a ledger for a Mr S, being matter no. 2110719. There was no DNA testing undertaken in Mr S's matter. It was an entirely unrelated matter to Client G. 9. Subsequent instructions were received in or about April 2013 to act on behalf of Client G to commence contravention proceedings as a result of the failure of Client G's former partner to make the children available to spend time with him pursuant to the Orders ("Contravention Proceedings"). An Application and supporting Affidavit were prepared by the Solicitor but not filed. 10. In relation to the Contravention Proceedings, Client G paid a total sum of $1,800 directly to the Solicitor and which monies the Solicitor retained. 11. The Solicitor has admitted receiving the sum of $1,800 from Client G by way of cash for legal costs and disbursements in advance and failing to account for same to the Law Practice. H. Client 'H' 1. Instructions were provided by Client H ("Client H") to the Solicitor to act on his behalf in relation to a number of charges of sexual assault and in relation to an application for an Apprehended Violence Order. 2. The matter first came before Campbelltown Local Court on 16 April 2013 and was adjourned to 3 June 2013. On 3 June 2013, the matter was further adjourned to 29 July 2013. 3. Client H was provided with a Costs Agreement dated 9 April 2013 and was given an Updated Costs Agreement on 8 May 2013. 4. In the period 11 April 2013 to 20 May 2013, Client H paid the Solicitor, either by cash or by direct deposit into the Solicitor's Account, the sum of $6,360 as follows: Date Amount 11 April 2013 $800 15 April 2013 $800 22 April 2013 $600 30 April 2013 $660 8 May 2013 $1,800 9 May 2013 $400 16 May 2013 $400 20 May 2013 $900 Total $6,360 5. The Solicitor has admitted that he received the sum of $6,360 from Client H. He did not account to the Law Practice for the money received. I. Client 'I' 1. The Law Practice acted on behalf of Client I ("Client I") in relation to a number of charges of sexual assault which were listed in the District Court at Campbelltown. 2. Mr W of Counsel had been instructed by Legal Aid to act in the matter. The matter was subsequently listed for trial on 19 August 2013. 3. On receipt of the grant of Legal Aid, the Solicitor sent an invoice to Legal Aid on 15 August 2012 for an amount of $5,964.50. By that stage, the work on behalf of Client I had not been completed. 4. On 31 August 2012 the sum of $5,835.50 was received from Legal Aid and credited to the Law Practice's general account.' 5. On 31 August 2012 the Solicitor directed payment be made to Mr D of Counsel for $5,758.50 and $75 – a total of $5,835.50. 6. The payment to Mr D of Counsel represented fees owing to him for acting on a matter for Ms H and in which matter the Solicitor had received cash from the client totalling approximately $18,000 and had failed to account to the Law Practice for that money. 7. The Solicitor subsequently created a memorandum of costs in the sum of $1,650 dated 27 November 2012 in the name of Ms S of Counsel with the bank details being the Solicitor's Second Account. 8. On 11 December 2012, an amount of $1,650 was paid from the law Practice's trust account in respect of the matter of Ms H, which was described in the trust ledger as being paid to "Ms S of Counsel" but was in fact, paid to the Solicitor's Second Account. J. Client 'J' 1. The Solicitor acted on behalf of Client J ("Client J") in relation to the charges of aggravated sexual assault and detaining a person with intent to obtain advantage occasioning actual bodily harm. As a result of these offences, Client J was held in custody. 2. The Solicitor made arrangements with X College ("the College") for the refund of school fees that had been paid by Client J to that school for his son in the sum of $4,362.50 ("the funds"). 3. Instead of the funds being directed to the account of Client J, the Solicitor, by e-mail dated 14 June 2012, directed the College to pay the funds into the Solicitor's Account, but which he advised was conducted by Client J. DISCUSSIONS AND CONCLUSIONS 1. The Tribunal is comfortably satisfied that the solicitor's conduct as particularised in the Agreed Statement of Facts amounted to serious professional misconduct involving dishonesty. The protection of the public is paramount at all times particularly in relation to the handling of trust funds. Chief Justice Street in the case of The Law Society of New South Wales v. Jones, Unreported NSW CA 333 of 1977 said, 'reliability and integrity in the handling of trust funds are fundamental prerequisites in determining whether an individual is a fit and proper person to be entrusted with the responsibilities belonging to a solicitor. Members of the public, many of them wholly inexperienced and unskilled in matters of business or of law, inevitably must put great faith and trust in the honesty of solicitors in the handling of moneys on their behalf. The court must ensure that this trust is not misplaced.......' 2. The facts set out in the Agreed Statement of Facts shows the solicitor failed numerous times in his obligations as regards his dealing with trust funds. 3. The solicitor admitted the conduct complained of and co-operated with the council in its investigations. In a letter written by the solicitor to the Law Society dated 12 November, 2011 he attributed his conduct to a long standing addiction to gambling and advised that since the time of his suspension from practice and the termination of his employment from Dignan and Hanrahan he had been attending meetings of Gamblers Anonymous (GA) up to three times each week and had also consulted his GP and a psychologist to assist him with the aim of overcoming his illness and maintaining a balanced lifestyle. He had taken on an active role in GA which included chairing the weekly meetings, setting up and packing up the meeting rooms and also assisting other members travelling to and from such meetings. He said that once he had completed the 12-step Program it would be essential to become a sponsor himself to help other compulsive gamblers to understand and overcome their illness. He was then currently employed on full time basis in the hospitality industry and undertaking further study to complete a Diploma in Hospitality. 4. At the hearing of these proceedings, Ms Shaw informed the Tribunal that the solicitor continued to attend GA meetings and had commenced a repayment plan with his former employers by paying a lump sum of $20,000 and making monthly payments of $800. Ms Shaw submitted that the solicitor viewed these actions as a necessary part of his recovery. 5. The solicitor's desire and actions to re-order his life is praiseworthy. He is a young man and it may be that ultimately he will be able to re-establish himself as a fit and proper person to practice law. However, in our view, the dishonesty involved in his conduct is so egregious that no order other than an order that his name be removed from the roll will meet the circumstances. That is not of course to say that resumption of a practice in the law is lost to him forever but it is upon him to establish his fitness over what would undoubtedly be a lengthy period. 6. We make the following findings and orders: 1. That Matthew John Fulham is guilty of professional misconduct. 2. That the name of Matthew John Fulham be removed from the local roll. 3. That Matthew John Fulham pay the costs of the Council of the Law Society of New South Wales as agreed or assessed. I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar 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. Decision last updated: 25 September 2015