Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Council of the Law Society of New South Wales v Metleg [2015] NSWCATOD 144 Hearing dates: 23 September 2015 Date of orders: 15 December 2015 Decision date: 15 December 2015 Jurisdiction: Occupational Division Before: D Fairlie, Senior Member M Riordan, Senior Member J Schwager, General Member Decision: 1. The Solicitor is guilty of professional misconduct both at common law and under ss 497 (1) (b) and 498 (1) (a) of the Legal Profession Act 2004. 2. The Solicitor is not a fit and proper person to engage in legal practice and the probability is that she is permanently unfit to practice. 3. The Solicitor's name is removed from the Roll. 4. The Solicitor is to pay the Law Society's costs, as agreed or assessed. Catchwords: Solicitor – disciplinary proceedings – misappropriation – breach of trust account requirements – removal from Roll – absence of 'exceptional circumstances' – order for costs Legislation Cited: Civil and Administrative Tribunal Act 2013 (No. 2) Legal Profession Act 2004 Legal Profession Uniform Law (NSW) No. 16a Legal Profession Uniform Law Application Act (NSW) 2014 No. 16 Cases Cited: Allinson v General Council of Medical Education and Registration [1894] 1 QB 750; Clyne v NSW Bar Association [1960] HCA 40; Council of the Law Society of NSW v Isaac [2012] NSWADT 203; Harvey v Law Society of New South Wales 49 ALJR 362; Incorporated Law Institute of New South Wales v Meagher [1909] HCA 87; Law Society of New South Wales v Foreman 34 NSWLR 408; Law Society of New South Wales v Moulton [1981] 2 NSWLR 736; Meek v Fleming [1961] 2 QB 366; New South Wales Bar Association v Evatt [1968] HCA 20; Prothonotary of the Supreme Court of NSW v P [2003] NSWCA 320; Walter v Council of Queensland Law Society Incorporated 62 ALJR 153; Weaver v NSW Law Society [1979] HCA 35; Wentworth v New South Wales Bar Association [1992] HCA 24; Ziems v Prothonotary of the Supreme Court of NSW [1957] HCA 46. Category: Principal judgment Parties: Council of the Law Society of New South Wales (Applicant) Amina Raafat Metleg (also known as Amina Nasser, Pamela Hilton and Isha Itaoui) (Respondent) Representation: Solicitors: Mr L Pierotti (Applicant) File Number(s): 1520044 Reasons for decision The Application 1. On 13 March 2015, the Council of the Law Society of New South Wales ('the Law Society') filed an Application in the Tribunal alleging that the Respondent solicitor, Amina Raafat Metleg (also known as Amina Nasser, Pamela Hilton and Isha Itaoui) ('the Solicitor'), was guilty of professional misconduct on nineteen (19) grounds, which were formulated as follows: 1. Khalil Ibrahim Baui and Nabil Hamka (i) Failed to deliver the client's files to the offices of Mary Salama Lawyerconcerning the purchase of business and land as requested. (ii) Failed to account the sum of $54,000 paid by Mr Nabil Hamka(Mr Hamka) to the solicitor. (iii) Failed to provide an accounting to Mr Khalil Ibrahim Bazzi andMr Hamka in relation to the settlement of their purchase of land. (iv) Failed to respond to correspondence. (v) Breached section 254 of the Legal Profession Act, 2004. (vi) Breached section 255 of the Legal Profession Act, 2004. (vii) Misappropriated trust money. 2. Mostapha and Jamilah Awed (i) Breached section 254 of the Legal Profession Act, 2004. (ii) Breached section 255 of the Legal Profession Act, 2004. (iii) Misappropriated trust money. 3. Abdulrahman Moussa (i) Breached section 254 of the Legal Profession Act, 2004. (ii) Breached section 255 of the Legal Profession Act, 2004. (iii) Misappropriated trust money. 4. Joe Slyman (i) Breached section 254 of the Legal Profession Act, 2004. (ii) Breached section 255 of the Legal Profession Act, 2004. (iii) Misappropriated trust money. 5. Ziad El Masri (i) Breached section 254 of the Legal Profession Act, 2004. (ii) Breached section 264 of the Legal Profession Act, 2004. (iii) Misappropriated trust funds. 1. The Law Society sought orders as follows: 1. The Solicitor's name be removed from the Roll. 2. The Solicitor pay a substantial fine. 3. The Solicitor pay the costs of the Law Society as agreed or assessed. 4. Such further or other order the Court (sic) deems fit. 1. The Particulars set out in the Application were as follows: 2. In these Particulars: "the Law Practice" means Salah & Metleg Lawyers Pty Ltd trading as Salah & Metleg Lawyers, formerly located at Suite 11, 61-67 Haldon Street, Lakemba, New South Wales. "the Solicitor" means Amina Raafat Metleg "the Society" means The Law Society of New South Wales The Solicitor was a principal and Solicitor Director of the Law Practice from19 June 2009 until the Law Practice was closed on 1 July 2011, as the professional indemnity insurance premium had not been paid for the year ended 30 June 2012. The Law Practice's office account was held with National Australia Bank (account number 56792 4722) in the name of Salah & Metleg Lawyers Pty Ltd. On 2 December 2011, the office account of the Law Practice was closed. The Law Practice did not operate a trust account. A. Khalil Ibrahim Baui and Nabil Hamka 1. The Solicitor acted for Mr Khalil Ibrahim Bazzi (Mr Bazzi) and Mr NabilHamka (Mr Hamka) in respect of the purchase of: (a) A property located at 32 Sunny Crescent, Punchbowl (PunchbowlProperty) from the vendor, Mr Roni Horner in the sum of $980,000. (b) A business known as Roni's Childcare Centre located on thePunchbowl Property (Business) from the vendor, Roni's ChildcarePty Ltd in the sum of $100,000. 2. On 15 June 2011, a bank cheque (numbered 428332) in the sum of $54,000 was drawn on the National Australia Bank and made payable to Salah and Metleg Lawyers in payment of part of the balance of the purchase price of the Punchbowl Property (Bank Cheque). The funds for the Bank Cheque were provided by Mr Hamka. 3. On 17 June 2011, the Bank Cheque was deposited into the office account of the Law Practice. 4. Without the authority or direction of Mr Hamka, the sum of $54,000 wasdisbursed from the office account of the Law Practice for purposes otherthan the payment of the purchase price of the Punchbowl Property. Thesolicitor has failed to account to Mr Hamka for this sum. 5. The solicitor has also failed to provide an accounting to Mr Bazzi andMr Hamka in relation to the settlement of the purchase of the PunchbowlProperty. 6. On 20 October 2011, Ms Mary Salerno, Solicitor of Mary Salama Lawyer(Ms Salama), the then Solicitor for Mr Bazzi and Mr Hamka, sent a facsimileto the Law Practice requesting that the Solicitor release the files concerningthe purchase of the Punchbowl Property and Business and, inter alia,requesting a date upon which the files would be ready for collection from theLaw Practice. 7. On 2 November 2011, the original contract for sale of business and otherdocuments were delivered to Ms Salama's office. These documents did notrepresent the entirety of the Solicitor's files) in respect of the purchases ofthe Punchbowl Property and the Business. 8. On 10 November 2011, Ms Salama sent a letter to the Law Practicerequesting the balance of the files) for the purchases of the PunchbowlProperty and Business. The Solicitor did not respond to this letter. 9. On 14 November 2011, Ms Salama sent a letter to the Law Practicerequesting the balance of the file(s) for the purchase of the PunchbowlProperty and Business from the Solicitor. The Solicitor did not respond tothis letter. 10. On 15 November 2011, Ms Salama sent a letter to the Law Practicerequesting, inter alia, an "urgent response" to the queries as set out in thatletter, including the circumstances concerning the Bank Cheque. TheSolicitor did not respond to this letter. 11. On 7 December 2011, Ms Salama sent a letter to the Law Practicerequesting details concerning the Bank Cheque. The Solicitor did notrespond to this letter. B. Mostapha and Jamilah Awed 1. The Solicitor acted for Mostapha and Jamilah Awad on the purchase of aproperty situated at 96A Banksia Road, Greenacre (Greenacre Property) byauction from Fred Hatem (Vendor). 2. The purchase price of the Greenacre Property was $600,000 and stamp duty payable was $22,510. 3. The deposit payable on the Greenacre Property was $60,000. 4. On 23 July 2011, contracts were exchanged on the Greenacre Property. 5. Only $50,000 of the deposit moneys was paid to the Vendor's real estateagent, Richard Matthews Real Estate. 6. On 9 August 2011, the sum of $10,000 was deposited by Jamilah Awad into the office account of the Law Practice, being the balance of the depositpayable on the purchase of the Greenacre Property. 7. After receipt of the sum of $10,000 into to the Law Practice's office account, the following payments were made: Date Cheque No. Amount Payee 10.8.2011 000735 $3,000 Cash 11.8.2011 000736 $300 Homeside Lending 12.8.2011 000731 $97 LPMA 12.8.2011 000734 $398 LPMA 15.8.2011 BPay $120 SDRO Enforcements 15.8.2011 000738 $2,000 Cash 16.8.2011 000739 $2,000 Cash $7,915.00 8. After the withdrawals referred to in paragraph 7 above, the office accountbalance was $2,087.01. 9. On 17 August 2011, a deposit of $7,500 was credited to the office account of the Law Practice with the narration as "Cash Deposit". After this deposit, the balance in the office account was $9,587.01. 10. From the balance of $9,587.01 the following payments were then made from the office account: Date Cheque No. Amount Payee 17.8.2011 000732 $5,510 OSR 17.8.2011 000737 $97 LPMA 18.8.2011 000733 $162.50 Perpetual LMS 22.8.2011 000740 $1,100 Cash 22.8.2011 000741 $300 Bankstown Council 22.8.2011 000742 $1,100 Cash 24.8.2011 000743 $193 Cash 16.8.2011 000739 $2,000 LPI $9,462.50 C. Abdulrahman Moussa 1. Abdulrahman Moussa (Mr Moussa) instructed the Solicitor to act for him inrelation to the purchase of a property together with a company named KHISHolding Pty Ltd, being Lots 7 and 6 at 263 Noble Avenue, Greenacre, fromNadiezda Lydia Dziano, vendor (the Property). 2. The purchase price of the Property was $626,000. 3. On 16 April 2012, a bank cheque (no. 426517) in the sum of $23,770 waspurchased from Westpac Banking Corporation using funds from an accountheld by Mr Mousse trading as Inaphase Electrical Services (Bank Cheque).The Bank Cheque was to pay stamp duty on the purchase of the Property andwas provided to the Solicitor sometime shortly after it was obtained by MrMoussa. 4. On 19 April 2012, the bank cheque was provided to the Office of StateRevenue and used to pay stamp duty on the following matters not associatedwith Mr Moussa's purchase: Stamp duty on above Haisam Ayoubi and Bahri Korkmazer purchase $8,835.65 Stamp duty on Abdul El Dannaoui purchase for $265,000.00 on (374/259070) (ref 6642000) $7,775 Stamp duty on Mountaha and Habib Taouk purchase for $531,500.00 (1 & 2/1100512) (ref 6642030) $7,159.35 Total $23,770 5. Mr Moussa was not aware of and did not authorize the payments made with the Bank Cheque. 6. On 26 April 2012, the Solicitor sent a letter to Mr Moussa advising of thesettlement date for the purchase of the Property and requested that thefollowing funds be provided to enable settlement: Description Amount 1 Sydney Water $29.06 2 W. O'Connor Removals and Storage $14,550 3 Turner Freeman $1,272.83 4 Nadiezda Lydia Dziano $549,496.07 5 LPMA $95 6 LPMA $95 7 Jacqui Israel Lawyers $578.95 8 Sydney Legal Agents $232.80 7. On 27 April 2012, Mr Moussa obtained, inter alia, bank cheques in payment of items 1-3 and 5-6 in paragraph 6 above. These further bank cheques were provided to the Solicitor. 8. On 27 April 2012, settlement of the subject property took place. 9. Subsequently, the Solicitor informed Mr Moussa that there had been someissue with the payment of stamp duty and that her agent had "mixed up" the stamp duty payment he had made of $23,770. The Solicitor informedMr Moussa that she would attend to the resolution of the issue of payment. 10. As a result of further legal advice obtained by Mr Moussa it was determined by him that he would pay stamp duty again on the purchase of the Property and then seek a refund from the Office of State Revenue for the earlier paid duty. 11. On 12 March 2013, Mr Moussa attended the Office of State Revenue when he was informed that stamp duty payable, including penalty interest, would be $25,780. This last amount was that day paid by Mr Moussa to the Office of State Revenue by way of bank cheque drawn on National Australia Bank. 12. Of the funds provided to the Solicitor [see paragraph 6 above], the bankcheque in the sum of $578.95 payable to Jacqui Israel Lawyers was for amatter involving Abdul Rahim Ghamraoui and Marwan Ghamraoui and hadnothing to do with the settlement of the purchase of the Property. Mr Moussadid not authorize the use of this sum other than for the said settlement. 13. The Solicitor has not repaid the sum of $23,770 to Mr Moussa. D. Joe Slyman 1. In or about 2007, Joe Slyman (Mr Slyman) engaged the Solicitor to act on his behalf in respect of family law property settlement proceedings(Proceedings). 2. In or about May 2010, Mr Dominic Williams of Counsel (Mr Williams) was briefed in-the Proceedings. 3. On 2 December 2011, the office account of the Law Practice was closed. 4. The Law Practice did not maintain a trust account. 5. On 24 June 2011, Mr Williams sent a letter to the Solicitor attaching his taxinvoice in the sum of $1,155. 6. On 21 November 2011, Mr Williams sent to the Solicitor, inter alia, a copy ofhis tax invoice of 24 June 2011 referred to in paragraph 5 above. 7. On 2 May 2012, Mr Williams sent a letter to the Solicitor enclosing a furthertax invoice in the sum of $5,582.50. 8. Around June 2012, Mr Slyman provided the Solicitor the sum of $2,500 incash for part payment of Mr Williams' fees. 9. On 11 July 2012, Mr Williams sent an email to the Solicitor stating, relevantly: "…Joe Slyman contacted me about a week ago and said that he hadpaid monies to you sufficient for my fees previously including a further $2,500 recently. I told him you had not yet paid me but I believed youintended to do so…" 10. On 11 July 2014 the Solicitor sent an email to Mr Williams in reply to his email of the same date stating, relevantly: "Yes Joe has paid me $2500 recently for part payment of frees (sic). Iwill forward that amount to you once I'm out of hospital…" 11. Mr Williams has not been paid any of his outstanding tax invoices. E. Ziad El Masri 1. Mr Ziad El Masri (Mr El Masri) owned a property situated at 61 WangeeRead, Lakemba (Lakemba Property). Messrs Kheir & Associates Solicitorsacted for the purchasers and Wasim Jabakhangi of JN Legal (andsubsequently Messrs Zahr & Zahr Lawyers) acted for Mr El Masri as vendorof the Lakemba Property. 2. On 2 July 2010, a contract for sale was entered into for a purchase price of$500,000. 3. By letter dated 6 July 2010, Zahr & Zahr Lawyers wrote to Kheir & Associates Solicitors. The letter provided for settlement on 8 July 2010 and requested that the allowing cheques be provided for settlement: Payee Amount St George Bank Limited $242,964.06 (Bank cheque) Zahr & Zahr Lawyers $1,468.50 (Bank cheque) Bilal Harmoush $100,000 (Bank cheque) Ziad El Masro $25,507.16 (Bank cheque) Wasim Jabakhangi $1,078.30 (Bank cheque) Samir Adra $75,000.00 (Bank cheque) Canterbury City Council $4,922.25 (Bank/Trust cheque) Sydney Water $273.16 (Bank/Trust cheque) 4. On 8 July 2010, settlement of the sale of the Lakemba Property took place. 5. On 9 July 2010, Messrs Zahr & Zahr Lawyers sent a letter to Mr El Masriconfirming the following cheques totalling $200,507.16 were paid to him fromsettlement: Bilal Harmoush $100,000.00 Samir Adra $75,000.00 Ziad El Masri $25,507.16 $200,507.16 6. On 27 August 2010, Bilal Shahab (also known as Bilal Harmoush) providedthe sum of $100,000 in cash to Mr El Masri. These funds had earlier beengiven to Mr Shahab by Mr El Masri. 7. On 27 August 2010, Mr El Masri attended at the Solicitor's office with Bilal Shahab and provided the Solicitor with the sum of $185,000. Mr El Masriinformed the Solicitor that he wished for her to retain this sum in her trustaccount pending the purchase of another properly. 8. The Solicitor provided to Mr El Masri a receipt dated 27 August 2010, signed by her and witnessed by BiIaI Shahab, which provided: "I Amina Raafat Metleg, principle (sic) of Salah & Metleg lawyers at11161-67 Haldon Street, LAKEMBA NSW 2195 acknowledge receiptof $185,000.00 in cash from Ziad El Masri. These funds are to be heldfor Mr Masri pending purchase of property in the near future." 9. At the time of receipt by the Solicitor of the funds totalling $185,000, the Law Practice did not maintain a trust account. 10. At all material times, Mr El Masri did not authorize or direct the Solicitor to usethe funds in any way other than to hold such funds for him in trust pending thepurchase of a property. 11. The Solicitor has not accounted to Mr El Masri for the sum of $185,000. Relevant Legislation Legal Profession Act 2004 ("the LP Act") 254 Certain trust money to be deposited in general trust account (1) Subject to section 258A, as soon as practicable after receiving trust money, a law practice must deposit the money in a general trust account of the practice unless: (a) the practice has a written direction by an appropriate person to deal with it otherwise than by depositing it in the account, or (b) the money is controlled money, or (c) the money is transit money, or (d) the money is the subject of a power given to the practice or an associate of the practice to deal with the money for or on behalf of another person. Maximum penalty: 100 penalty units. (2) Subject to section 258A, a law practice that has received money that is the subject of a written direction mentioned in subsection (1) (a) must deal with the money in accordance with the direction: (a) within the period (if any) specified in the direction, or (b) subject to paragraph (a), as soon as practicable after it is received. Maximum penalty: 100 penalty units. (3) The law practice must keep a written direction mentioned in subsection (1) (a) for the period prescribed by the regulations. Maximum penalty: 50 penalty units. … (5) A person is an appropriate person for the purposes of this section if the person is legally entitled to give the law practice directions in respect of dealings with the trust money. 255 Holding, disbursing and accounting for trust money (1) A law practice must: (a) hold trust money deposited in a general trust account of the practice exclusively for the person on whose behalf it is received, and (b) disburse the trust money only in accordance with a direction given by the person. Maximum penalty: 50 penalty units. (2) Subsection (1) applies subject to an order of a court of competent jurisdiction or as authorized by law. (3) The law practice must account for the trust money as required by the regulations. Maximum penalty: 50 penalty units. 264 Keeping trust records (1) A law practice must keep in permanent form trust records in relation to trust money received by the practice. Maximum penalty: 100 penalty units. (2) The law practice must keep the trust records: (a) in accordance with the regulations, and (b) in a way that at all times discloses the true position in relation to trust money received for or on behalf of any person, and (c) in a way that enables the trust records to be conveniently and properly investigated or externally examined, and (d) for a period determined in accordance with the regulations. Maximum penalty: 100 penalty units. 497 Professional misconduct (1) For the purposes of this Act: professional misconduct includes: (a) unsatisfactory professional conduct of an Australian legal practitioner, where the conduct involves a substantial or consistent failure to reach or maintain a reasonable standard of competence and diligence, and (b) conduct of an Australian legal practitioner whether occurring in connection with the practice of law or occurring otherwise than in connection with the practice of law that would, if established, justify a finding that the practitioner is not a fit and proper person to engage in legal practice. (2) For finding that an Australian legal practitioner is not a fit and proper person to engage in legal practice as mentioned in subsection (1), regard may be had to the matters that would be considered under section 25 or 42 if the practitioner were an applicant for admission to the legal profession under this Act or for the grant or renewal of a local practising certificate and any other relevant matters. 498 Conduct capable of being unsatisfactory professional conduct or professional misconduct (1) Without limiting section 496 or 497, the following conduct is capable of being unsatisfactory professional conduct or professional misconduct: (a) conduct consisting of a contravention of this Act, the regulations or the legal profession rules, … (2) Conduct of a person consisting of a contravention referred to in subsection (1) (a) is capable of being unsatisfactory professional conduct or professional misconduct whether or not the person is convicted of an offence in relation to the contravention. 562 Determinations of Tribunal (1) Orders generally If, after it has completed a hearing under this Part in relation to a complaint against an Australian legal practitioner, the Tribunal is satisfied that the practitioner has engaged in unsatisfactory professional conduct or professional misconduct, the Tribunal may make such orders as it thinks fit, including any one or more of the orders specified in this section. Legal Profession Uniform Law (NSW) No. 16a ("the Uniform Law") Sch 4 Savings and Transitional Provisions Division 7 Dispute resolution and professional discipline 26 Current complaints and investigations (1) This clause applies to - (a) a complaint made under old Chapter 4 but not disposed of before the commencement day; or … (2) On and after the commencement day - (a) the complaint or investigation is to continue to be dealt with in accordance with the provisions of the old legislation; … Civil and Administrative Tribunal Act 2013 (No. 2) ("the CAT Act") 28(1) - Jurisdiction of Tribunal generally (1) The Tribunal has such jurisdiction and functions as may be conferred or imposed on it by or under this Act or any other legislation. The Law Society's evidence 1. On 13 March 2015, the Law Society filed an affidavit sworn on 12 March 2015 by its solicitor, Ms Anne-Marie Foord; an affidavit sworn on 13 March 2015 by Mr John Ernest Mitchell, Chief Trust Investigator and Supervisor employed by the Law Society; an affidavit affirmed on 6 March 2015 by Nabil Hamka; an affidavit affirmed on 5 March 2015 by Abdulrahman Moussa; an affidavit sworn on 4 March 2015 by Mary Salama; an affidavit affirmed on 3 March 2015 by Nabil Bazzi; and an affidavit sworn on 12 February 2015 by Dominic Williams. On 2 April 2015, it filed an affidavit sworn on 27 March 2015 by Ronald Dunlop, a Trust Account Investigator employed by the Law Society. On 20 April 2015, it filed an affidavit affirmed on 15 April 2015 by Ziad El Masri; and an affidavit affirmed on 10 April 2015 by Bilal Harmoush (also known as Bilal Shahab). These affidavits constituted the Law Society's evidence. The Solicitor's Evidence 1. The solicitor did not file a Reply or any affidavit evidence. The course of the proceedings 1. At the hearing of the Application on 23 September 2015, Mr Pierotti appeared for the Law Society, but there was no appearance by or on behalf of the solicitor. However, the Tribunal noted that Redmond Hale Simpson, Solicitors, filed a Notice of Representation by Legal Practitioner on 4 May 2015. 2. Mr Pierotti provided the Tribunal with a letter from the Solicitor's solicitors to the Law Society dated 26 May 2015, which was in the following terms: "We refer to previous correspondence regarding this matter. We have conferred with Ms Metleg who has instructed us as follows: 1. She does not wish to file a Reply to the Society's Application. 2. She does not wish to file any Affidavit evidence. 3. She does not wish to appear at the ultimate hearing of this matter. 4. Although she appreciates that she cannot consent to an order striking her name from the Roll, she will not be opposing such an Order. We will not be taking any active part in any hearing but will remain on the record for the purpose of your serving any documents…" 1. In view of these documents, the Tribunal is satisfied that the Solicitor was duly notified of the current proceedings; the orders sought by the Law Society; and the hearing date, and we decided that it was appropriate to proceed to determine the Application in her absence. 2. Mr Pierotti made oral submissions and provided the Tribunal with a marked-up copy of the Application cross-referenced with supporting evidence. He made submissions to the effect that the Law Society's evidence is ample to support a determination that the solicitor committed a litany of breaches of the trust account provisions of the Legal Profession Act 2004 ("the Act") and/or misappropriation and that she is guilty of professional misconduct, both statutory and at common law. 3. Mr Pierotti submitted that the Solicitor was not a fit and proper person to remain on the Roll because she had committed a "fundamental breach" of her obligations as a legal practitioner. He relied upon the decision of the Court of Appeal in Law Society of NSW v Jones [decision dated 29 July 1978, Unreported] ("Jones") in which Street CJ (with whom Reynolds and Samuels JJA agreed) and the decision of the Administrative Decisions Tribunal in Council of the Law Society of NSW v Isaac [2012] NSWADT 203 ("Isaac"). , 4. Mr Pierotti argued that in addition to breaching the statutory provisions relating to trust moneys the solicitor is also guilty of professional misconduct at common law, based upon the test formulated in Allinson v General Council of Medical Education and Registration (1894) 1QB 750, as it was conduct which would reasonably be regarded as disgraceful or dishonourable by other legal practitioners of good repute. He therefore argued that in all of the circumstances of this matter, the Tribunal would be satisfied that it was appropriate to make an order that the Solicitor's name be removed from the Roll. 5. As to the Tribunal's role in disciplinary proceedings, Mr Pierotti relied upon the decision of the Court of Appeal in Law Society of New South Wales v Walsh (unreported, dated 15 December 1997) and particularly the statements made by Beazley JA. 6. Mr Pierotti also submitted that the Solicitor should be ordered to pay a significant fine and that pursuant to s 562(7) of the Act the Tribunal may impose a maximum penalty of $75,000. However, he conceded that he is not aware of any decisions in which a solicitor had been both struck off and fined. He also sought an order for costs. 7. At the conclusion of his oral submissions, Mr Pierotti indicated that he would lodge written submissions regarding the jurisdictional amendments that followed the repeal of the Act and the introduction of both the Legal Profession Uniform Law (NSW) and the Legal Profession Uniform Law Application Act 2014. Law Society's Submissions as to Jurisdiction 1. On 23 September 2015, the Law Society lodged a short note headed "Legislation" outlining the jurisdictional amendments following the Act and the introduction of both the Legal Profession Uniform Law (NSW) and the Legal Profession Uniform Law Application Act (NSW) 2014. This submitted, in effect, that the Tribunal's jurisdiction in relation to the determination of this matter was subject to s 302 of the Uniform Law. 2. However, on 17 November 2015, the Solicitor for the Law Society signed further submissions as to Jurisdiction, in which she withdrew the Short Note dated 23 September 2015 and requested that the Tribunal consider the contents of these submissions. 3. In the submissions dated 17 November 2015, the Law Society submitted, effectively, that by operation of sch 4 cl 26 of the Uniform Law Application Act, s 302 of the Uniform Law does not apply to this matter as the proceedings were commenced by way of a complaint made under Chapter 4 of the Act, but they were not disposed of before 1 July 2015. As a result, where the Tribunal makes a finding of professional misconduct or unsatisfactory professional conduct, its power to make orders continues to arise under s 562 of the Act. Considerations and Findings 1. The Tribunal notes that in Walsh, Beazley JA stated (relevantly): … Notwithstanding this, it was submitted by senior counsel for the appellant that there were recent decisions of this Court, which pointed to a general rule to the effect that a finding that a practitioner was not of good fame and character required that the person's name be struck from the roll. I will refer to those decisions shortly. Before doing so it is convenient to consider the principles which govern disciplinary proceedings generally. In doing so, I do not propose to review all the relevant authorities. That has been done by this Court in a number of recent judgments, in particular, Law Society of New South Wales v Foreman (1994) 34 NSWLR 408; and Law Society of New South Wales v Bannister (unreported, Court of Appeal, 27 August 1993). Rather, I propose to focus on the authorities of direct relevance to this matter. It is undisputed that disciplinary proceedings are concerned with the protection of the public: Wentworth v New South Wales Bar Association (1992) 176 CLR 239 per Deane, Dawson, Toohey, and Gaudron JJ at 251; Clyne v New South Wales Bar Association (1960) 104 CLR 186 at 201-202; New South Wales Bar Association v Evatt (1986) 117 CLR 177 at 183-184; Weaver v Law Society of New South Wales (1979) 142 CLR 201 at 207; and Walter v Council of Queensland Law Society Inc. (1988) 62 ALJR 153 at 157. The court's duty to protect the public is not confined to the protection of the public against further misconduct by the particular practitioner who is the subject of the disciplinary proceedings. It extends to protecting the public from similar defaults by other practitioners. Thus, it is relevant to take into account the effect the order will have upon the understanding in the profession and amongst the public of the standard of behaviour required of solicitors. In this sense, any penalty imposed should contain an element of general deterrence, "publicly marking the seriousness of what the instant solicitor has done": Foreman per Mahoney JA at 441; see also 23. Law Society of New South Wales v Bannister (unreported, Court of Appeal, 27 August 1993); McBride v Walton (unreported, Court of Appeal, 15 July 1994). This wider notion of protection of the public involves the Court ensuring that the high standards which are demanded of members of the profession are maintained. As this Court said in Harvey v The Law Society of New South Wales (1975) 49 ALJR 362 at 364: "The function of a Court called upon to consider an application to remove the name of a practitioner from a roll of practitioners is to examine the material proffered to it in order to determine whether that material establishes that the solicitor has failed, by action or inaction, to maintain in his conduct the standards required of him as a member of the profession. The Court's duty is to ensure that those standards of the profession are fully maintained particularly in relation to the proper relationship of practitioner with practitioner, practitioner with the Court and practitioner with the members of the public who find need to use the services of the profession. It is no part of that function to punish the solicitor whose conduct the Court finds to be in breach of those professional standards." The same point had earlier been made in Ex parte Macaulay (1930) 30 SR (NSW) 193 by Street CJ, who stated at 193-4: "...unless the Court insists on a high standard of conduct on the part of solicitors - unless the Court punishes severely any lapse from the proper standard - the public will never be properly safeguarded and the profession will never retain the respect which it ought to have in the community". In Ziems v The Prothonotary of the Supreme Court of New South Wales (1957) 97 CLR 279 at 297-298 Kitto J said that: ''[t]he issue is whether the appellant is shown not to be a fit and proper person to be a member of the Bar of New South Wales. It is not capable of more precise statement. The answer must depend upon one's conception of the minimum standards demanded by a due recognition of the peculiar position and functions of a (practitioner) ". See also Clyne v New South Wales Bar Association at 188, 189. In New South Wales Bar Association v Evatt, the High Court said at 184: "The respondent's failure to understand the error of his ways of itself demonstrates his unfitness to belong to a profession where, in practice, the client must depend upon the standards as well as the skill of his professional adviser". The question of unfitness is not confined to a consideration of the conduct which is the subject of the disciplinary charge. Additional factors may be relevant. A failure to be honest with the Court or with fellow practitioners is one such consideration. In Incorporated Law Institute of New South Wales v Meagher (1909) 9 CLR 655, Isaacs J said at 681: "... if... there be deliberate misleading, or reckless laxity of attention to necessary principles of honesty on the part of those the Courts trust to prepare the essential materials for doing justice, these tribunals are likely to become mere instruments of oppression, and the creator of greater evils than those they are appointed to cure. There is therefore a serious responsibility on the Court - a duty to itself to the rest of the profession, to its suitors, and to the whole of the community to be careful not to accredit any person as worthy of public confidence who cannot satisfactorily establish his right to that credential. It is not a question of what he has suffered in the past, it is a question of his worthiness and reliability for the future." See also Higgins J at 691. In Foreman, Mahoney JA said at 447: "A practitioner must not merely not deceive the court before which she practises; she must be fully frank in what she does before it. This obligation takes precedence over the practitioner's duty to her client, to other practitioners and to herself: Meek v Fleming [1961] 2 QB 366 at 382, 383. The justice system win not work if a practitioner is, for her own purposes, free to put to the court that which she knows to be false." Another relevant factor will be whether the practitioner truly understands the error of his or her ways. Evatt's case, to which I have referred earlier, involved a barrister who did not know that it was wrong to be a party to the organising of extortionate fees by a solicitor when the solicitor had the agreement of his client to charge those fees. The High Court held, at 183, that: "The Supreme Court was... in error in not appreciating that its findings of misconduct demonstrated the unfitness of the respondent to be a barrister, and compelled the conclusion that he should be disbarred." The same principle, that a practitioner's failure to appreciate that the impugned conduct was wrong, was applied to the case of a solicitor who claimed to be ignorant of his duty when using a client's money: Law Society of New South Wales v Moulton [1981] 2 NSWLR 736. Whilst a practitioner's expressed intention not to re-offend is relevant to mitigation, it will have little weight unless accompanied by an understanding of the wrongfulness of the conduct which was the subject of the disciplinary charge. Mahoney JA dealt generally with the question of mitigation in Foreman at 444: "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." His Honour returned to the question of character at 449, observing that "character is tested not by what one does in good times but in bad". In arriving at questions of character the court may take into account an assessment of a practitioner's credibility. Credibility may also be taken into account in seeking to determine what a practitioner is apt to do in the future: see Bannister v Walton (1993) 30 NSWLR 600 at 723-729; Foreman at 450. It is also relevant to take into account whether the conduct in question is "an isolated or passing departure from proper professional standards amounting to something less than proved unfitness... ": Evatt at 183. The various factors to which I have referred are but specific matters relevant to the central question which confronts the Court in determining penalty, namely whether the solicitor is a fit and proper person to be held out by the Court as such. The Court's order must therefore be directed to ensuring that to the extent the practitioner is not, the practitioner's practice is restricted: Foreman at 441 per Mahoney JA. This brings me to the two decisions relied upon by counsel for the appellant. In Law Society of New South Wales v Bannister Sheller JA, with whom Gleeson CJ and Handley JA agreed, stated at 11: ''[T]he supervisory jurisdiction of the Court and of statutory bodies such as the Tribunal is directed in part to ensuring that the requirement enshrined in the Charter of Justice that persons admitted to practise as solicitors befit and proper persons or, in the language of s16 of the Legal Profession Act 1987, of good fame and character is maintained. It follows that if a solicitor is shown not to be a fit and proper person, he or she should be removed from the roll." The Court further said at 12: ''[R]etribution, a purpose of criminal punishment, is no part of the Court's purpose in making an order against a solicitor in the exercise of its supervisory jurisdiction. The exercise of the power to remove from the roll, suspend or fine a solicitor is directed to protecting the public by ensuring that those unfit to practise do not continue to hold themselves out as fit to practise and that high standards are maintained. The maintenance of such standards involves deterring the offender from repeating the offence and deterring others who might be tempted to offend". In my opinion, contrary to the submissions of counsel for the appellant, Law Society of New South Wales v Bannister does not deny the Court's discretionary jurisdiction to make such order as will ensure that the public is protected in the sense to which I have referred. It is dear from the judgment, read as a whole, that, in determining the appropriate penalty the nature and extent of the improper conduct, and the need for specific and general deterrence in order to maintain the high standards demanded of members of the profession are relevant to the exercise of the Court's disciplinary jurisdiction. The Court may also take into account subjective considerations which would mitigate penalty "if the protective exercise being undertaken by the Tribunal requires that they be taken into account": Law Society of New South Wales v Bannister at 12. In McBride v Walton (unreported, Court of Appeal, 15 July 1994) Handley JA. 1. Further, in Jones [decision dated 29 July 1978, Unreported] in which Street CJ (with whom Reynolds and Samuels JJA agreed). stated (at page 10): 49. 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. 50. The Court of Appeal also expressed some further general views about this area in its unreported decision of Dupal v Law Society of NSW (delivered 26 April 1990 - unreported). Kirby P held at p1: In an Appeal such as the present, the Court disposes of the case before it by reference to criteria of general application. They should be clear and simple. They should be such as to leave no doubt in the mind of a practitioner in financial difficulties, exposed to the temptation of using, without clear authority, the funds of another, the consequences that will flow for the right to practice when such misuse of funds is discovered. 51. He also said that: The normal consequence of the misuse of entrusted funds by a solicitor, and a finding of wilful breaches of the statutory prohibition in that regard, is removal of the name of the solicitor from the Role" (at pp2-3). 53. In the same decision Handley JA, with whom Priestly JA agreed, said (at p12): This Court would be departing from a long course of authority if it were to allow the Appeal and substitute a period of suspension for the order of the Tribunal removing the Appellant from the Role. Counsel were not able to refer us to any case where a solicitor found guilty of misappropriation or wilful contraventions of S.41(1) has not been struck off the Role. Any decision to the contrary would signal to the profession and the community that this Court was no longer insisting on solicitors maintaining the highest standards of personal honesty and integrity in their dealings with clients and the public, and in the handling of moneys entrusted to their charge. 1. We note that in Isaac the Administrative Decisions Tribunal held: 41… the Solicitor misappropriated significant amounts of money from barristers whom he had briefed, to pay his own debts. As Mr Baran noted when the Solicitor first informed him of what he had done, this amounted to theft, as well as amounting to a gross breach of trust, for which the only appropriate penalty is that his name be removed from the Roll. 1. Further, we note that in Prothonotary of the Supreme Court of NSW v P [2003] NSWCA 320 ("P"), Young CJ in EQ (with whom Meagher JA and Tobias JA agreed) held that an order striking off the Roll should only be made when the probability is that the solicitor is permanently unfit to practice. 2. We have considered of all of the evidence in this matter and applied the principles expressed in Walsh, Jones and P to that evidence. Having done so we are satisfied that each of the nineteen (19) grounds pleaded in the Application are made out and that the Solicitor is guilty of professional misconduct as defined in ss 497(1)(b) and 498 (1)(a) of the Act. 3. We are also satisfied that the Solicitor is guilty of professional misconduct at common law as her conduct would reasonably be regarded as disgraceful or dishonourable by other legal practitioners of good repute and this is particularly so in the case of the five (5) separate counts of misappropriation of clients' monies. Considerations as to Penalty 1. The Solicitor did not place any evidence before the Tribunal and she chose not to participate in these proceedings. Based upon the evidence before us, we are satisfied that the Solicitor is not currently a fit and proper person to engage in legal practice and that the probability is that she is permanently unfit to practice. We are therefore satisfied that it is appropriate to make an order pursuant to s 562 of the Act that the Solicitor's name be removed from the roll. 2. However, as we have decided to make a protective order, the Tribunal is not satisfied that it is also appropriate to order the Solicitor to pay a fine. We are not bound by the orders sought by the Law Society and we decline to make that order. 3. In relation to costs, the Tribunal notes that Sch 5, cl 23(1) of the CAT Act provides: 23 Costs consequent of adverse conduct findings (1) Despite section 60 of this Act, the Tribunal must make orders requiring a respondent lawyer whom it has found to have engaged in unsatisfactory professional conduct or professional misconduct to pay costs (including costs of the Commissioner, a Council and the complainant), unless the Tribunal is satisfied that exceptional circumstances exist. 1. As the Tribunal has found that the solicitor engaged in professional misconduct, it must make an order requiring him to pay the Law Society's costs unless it is satisfied that exceptional circumstances exist. As previously discussed, there is no evidence from the Solicitor and we are satisfied that no exceptional circumstances exist. As a result, the Solicitor should pay the Law Society's costs, as agreed or assessed. Findings and Orders 1. The Tribunal makes the following findings and orders: 1. The Solicitor is guilty of professional misconduct both at common law and under ss 497 (1)(b) and 498 (1)(a) of the Legal Profession Act 2004. 2. The Solicitor is not a fit and proper person to engage in legal practice and the probability is that she is permanently unfit to practice. 3. The Solicitor's name is removed from the Roll. 4. The Solicitor is to pay the Law Society's costs, as agreed or assessed. I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Registrar ********** 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: 15 December 2015