Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Law Society NSW v Feerick [2017] NSWCATOD 54 Hearing dates: 25 October 2016 Date of orders: 03 March 2017 Decision date: 03 March 2017 Jurisdiction: Occupational Division Before: K O'Connor, AM, ADCJ, Deputy President R Dawson, Senior Member M Bolt, General Member Decision: 1.The Tribunal finds the respondent guilty of professional misconduct. 2.The Tribunal orders that that the name of the respondent be removed from the local roll. 3.The respondent pay the applicant's costs, as agreed or assessed. Catchwords: PROFESSIONAL DISCIPLINE – Legal Profession – Misappropriation – Conflict of Interest – Professional Misconduct - Appropriate Disciplinary Order – Rehabilitation program since suspension from practice – Whether sufficient reformation of character demonstrated – Not yet sufficient – Order for removal of name from roll. Legislation Cited: Civil and Administrative Tribunal Act 2013 Legal Profession Act 2004 Cases Cited: Allinson v General Council of Medical Education & Registration [1894] 1QBD 750 Dupal v Law Society of New South Wales [1990] NSWCA 56 A Solicitor v Council of the NSW Law Society [2004] HCA 1; 216 CLR 253; 204 ALR 8; 78 ALJR 310 Ex parte Lenehan (1948) 77 CLR 403 Ex parte Tziniolos; Re Medical Practitioners Act (1966) 67 SR (NSW) 448 Health Care Complaints Commission v Litchfield [1997] NSWSC 297; (1997) 41 NSWLR 630 Hoile v Medical Board of South Australia [1960] HCA 30; (1960) 104 CLR 157 Law Society of NSW v Shehadie (No 2) [2016] NSWCATOD 151 New South Wales Bar Association v Murphy [2002] NSWCA 138 Petsinis v Victorian Legal Services Board [2016] VSC 389 The Council of the New South Wales Bar Association v Sahade [2007] NSWCA 145 The Prothonotary of the Supreme Court of New South Wales v Dimitrious [2015] NSWCA 258 XY v The Board of Examiners [2005] VSC 250 Category: Principal judgment Parties: Council of the Law Society of New South Wales (Applicant) Thomas Gerard Feerick (Respondent) Representation: Counsel: P Maddigan (Applicant) I Davidson SC (Respondent) Solicitors: KQ Lawyers (Respondent) File Number(s): 1520246 Publication restriction: Order under Civil and Administrative Tribunal Act 2013, s 64: (1) That the name and any other identifying particulars of the witnesses referred to in these reasons as Witnesses A, B and C not be published or disclosed, other than as is required between the parties, their legal representatives, and persons approved by them, in connection with the conduct of the proceedings.(2) That the text of the passages in these reasons marked 'confidential' not be published or disclosed, other than(a) as is required between the parties, their legal representatives, and persons approved by them; or(b) as is required for administration and enforcement of these orders. REASONS FOR DECISION [In our public reasons we have suppressed some aspects of the respondent's personal history, in the interests of the health and welfare of the respondent and because of the sensitivity of that material to third parties who have not been involved in these proceedings.] 1. On 4 December 2015 the applicant, the Council of the Law Society of New South Wales, applied to the Tribunal under the Legal Profession Act 2004 (the LPA) for disciplinary findings and orders to be made against the respondent, Thomas Gerard Feerick, an Australian lawyer. 2. The respondent, born 1969, is now 47 years of age. He commenced study for a degree in law in 1996 and graduated from University of Western Sydney (UWS) in 2000. Between 2000 and 2003 he undertook PhD studies and worked as a law teacher at UWS. He taught a wide range of subjects. He then decided to enter practice. After completing the legal practice requirements, he was admitted on 9 July 2004 at the age of 35. He commenced work as an employee solicitor with a firm in Campbelltown. The firm became the Frontier Law Group in 2006, with him as principal. At the times relevant to these proceedings, the professional staff comprised the respondent and two employed solicitors. 3. The Law Society's application relates to conduct in the years 2010 and 2011. The application seeks findings of professional misconduct and an order striking his name from the roll of practitioners (under s 562(2)(a) of the LPA). The conduct in issue came to notice as part of a routine trust account investigation in late 2012. Most importantly, the investigation found evidence suggesting that he had misappropriated funds held for clients in trust, and had acted for them in circumstances where he had a conflict between their interests and his personal interests. 4. On 18 September 2014 the Law Society suspended the respondent from practice immediately in the public interest (LPA s 78). He has not practised since that time. 5. In March 2014 he had commenced a program of rehabilitation and treatment for alcoholism and stress. Since mid-2015 he has recommenced work, as a senior analyst with a building company. 6. The respondent has admitted that the conduct under notice amounted to professional misconduct. He accepts that his misconduct was very serious. He accepts that a usual order in cases of this kind is one of striking off. However he submits that he has taken substantial steps to put his life back in order, and he should be now be regarded as fit to return to practice under strict conditions including health conditions. 7. The Law Society submits that striking off remains the appropriate order. 8. The respondent's case in mitigation is that his conduct was out of character and was affected by personal stresses and alcoholism that he suffered at the time. Further he refers to the remorse he has shown, the steps he has taken to rectify the financial harm done to his clients, and the personal program of rehabilitation that he has undertaken since the conduct came to light. He submits that he can again be trusted to practise as a solicitor. 9. He has suggested that the following orders might be made, and would adequately address the public interest: (1) a reprimand; (2) a requirement that he successfully complete a course in ethics approved by the Law Society; (3) must not operate or be a signatory to any Law Practice Trust Account; (4) that the Tribunal note the following undertakings of the respondent, to: (a) remain abstinent from alcohol and substantiate this by submitting annual liver function blood test report to the Law Society for the next 2 years; (b) complete the course of psychological therapy, as is advised by Mr James McIntosh; (c) not accept instructions as a legal practitioner in matters involving abuse of children. (We interpolate that condition (c) is connected to an aspect of his history as a child, seen as a cause of stress, to which we refer more fully below.) 1. The respondent accepted that he should pay the costs of the Law Society up to 1 June 2016 or for such other period as the Tribunal sees fit. Material before the Tribunal 1. Law Society: Application for disciplinary findings and orders filed 4 December 2015. Affidavit in support, Anne-Marie Foord (Ex A1), Further Affidavit of Anne-Marie Foord annexing Affidavit of James Sofiak (Trust Accounts Department report) (Ex A2). Submissions, 30 September 2016. 2. Respondent: Amended Reply filed 1 June 2016. Evidence filed May 2016, including medical, psychiatric and other health and lifestyle reports (Dr Stephen Allnutt, Dr Robert Disney, Mr James McIntosh, Ms Beth Berghan); Affidavits from office bearers in Alcoholics Anonymous; affidavits in support, comprising: affidavit of respondent, affidavit of spouse, Leslea Feerick, and affidavits from six work or professional colleagues, named below (Ex R1) and a further report from Dr Allnutt dated 21 October 2016 (Ex R2). Submissions in Reply, 18 October 2016. Misconduct under Notice 1. The Rameli Matter. Mr and Mrs Rameli had been clients of the Frontier Law Group for many years. In early 2010 they engaged the respondent to assist them in establishing a self managed superannuation fund (SMSF) and to assist them in acquiring assets for the fund. At the time the respondent and his wife were in the course of purchasing a property at Campbelltown for $570,000 to be financed in part out of the proceeds of sale of a property they owned at Leumeah, then on the market for $430,000. Leumeah had not sold when they exchanged contracts for Campbelltown. 2. The respondent encouraged the Ramelis to buy Leumeah for their SMSF, and set a price of $470,000. The Ramelis were agreeable in principle subject to obtaining a mortgage. He promised to take steps to find a mortgagor. They made a part payment of the deposit in the sum of $20,000 on 23 February 2010. He used the payment to cover expenses connected with the Leumeah and Campbelltown properties, and credited the balance to the Ramelis' legal costs. 3. The Ramelis later discovered that the property had been on the market, and had not found a buyer at the advertised price of $430,000. They questioned the respondent over the price they had agreed ($470,000). The respondent then promised to refund them $40,000 after completion of the sale. The Ramelis made a further payment, of $140,000, towards the deposit on Leumeah on 28 April 2010. The respondent paid it into a trust account in the name of their SMSF. The respondent used those funds to assist him in settling his purchase of Campbelltown. The funds were used to draw a settlement cheque payable to the vendors ($126,576.81) with the balance going to their real estate agents. In 2014, After this conduct was detected by the Law Society's investigation, the respondent repaid the Ramelis the sum of $160,000. 4. The proposed sale of Leumeah to the Ramelis never proceeded. The respondent did not take any steps to procure the mortgage finance they needed to fund the balance. 5. The respondent has admitted that he was guilty of dealing with money received in trust to his benefit without receiving instructions from his client in that regard, in breach of s 255 of the LPA. 6. He has admitted that he misappropriated the two sums. 7. He admits that he made false representations to the mortgage lender on Campbelltown as to the progress of the sale of Leumeah. 8. He admits that he breached his duty as a solicitor not to act for clients in circumstances where there is a conflict between their interests and his personal interests (Rule 10, Revised Professional Conduct and Practice Rules 1995 (Solicitors' Rules)). 9. As this brief summary, we trust, demonstrates, there was a gross dereliction of his professional duties as a solicitor in this case. 10. Penski Matter. In or about July 2010 the respondent commenced to act for Ms Penski in her capacity as administrator of the deceased estate of her partner, Mr Daw, and in respect of payments due to her as the beneficiary under Mr Daw's life insurance policy and his superannuation. 11. In or about July 2011, he approached Ms Penski, and explained that he had a client in urgent need of immediate funds on a short term basis. Her asked her to lend the money, with a high rate of return. She agreed to assist. He arranged the transaction so that Mrs Penski made the loan to him, and he on-lent the money to the client. She lent a total of $110,000 in two tranches. The first deed of loan is dated 26 July 2011 ($65,000) and the second 5 August 2011($45,000). There were common terms: period of loan, 3 months (i.e. 26 October 2011 and 5 November 2011, respectively); interest at 36% per annum, payable monthly, security by way of a charge and unregistered mortgage over the respondent's half share in the Campbelltown and Leumeah properties. The loans were paid back with interest in due course. 12. Subsequently on 1 March 2012 Ms Penski made a further loan by way of two deeds for the same total sum divided in the same way, subject to the same interest rate and with the same promises as to security. The difference was that these loans had as their expiry dates 26 October 2016, i.e. five years from the date of each of the original loans. The respondent intended to use this money as a fund from which to lend to other clients with short-term needs. 13. He has admitted that, as charged, he breached the prohibition on borrowing from a client (Rule 12, Solicitors' Rules); and further that his conduct breached the conflict of interest rule (Rule 10). 14. He has also admitted that he breached s 674 of the LPA in that he obstructed the trust account investigator's investigation by misleading him. He was queried about the movement of $55,000 from the trust account to the office account on 19 October 2012. He has admitted that he gave an incomplete and false explanation to Mr Napper about the reasons for the movement of sums from Ms Penski's trust account to the office account, and, in particular, did not reveal the existence of a loan. He admits that he lied to Mr Napper. 15. Both deeds of loan purported to charge the Campbelltown and Leumeah properties with the loan monies and 'secure' them with an unregistered second mortgage (see Application pp 42-48, and references there to Ex JS1). The respondent did not enter into a second mortgage with Mrs Penski. She had an equitable interest in the properties. No caveats were lodged. All Ms Penski had to protect her was the charging provision in cl 5.1 of the deeds. No caveat was lodged in respect of that interest. The respondent has admitted each of these failures. Disciplinary Finding 1. The LPA provides at s 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. 1. 'Professional misconduct' is defined inclusively. Accordingly, the primary meaning of professional misconduct at common law is preserved (as set out in Allinson v General Council of Medical Education & Registration [1894] 1QBD 750, and approved by the High Court in Hoile v Medical Board of South Australia [1960] HCA 30; (1960) 104 CLR 157), i.e.: professional misconduct is established '[i]f it is shown that a [practitioner], in the pursuit of his [or her] profession, has done something with regard to it which would be reasonably regarded as disgraceful or dishonourable by his professional [colleagues] of good repute and competency'. 1. This definition uses as its yardstick the opinion of peers of good repute and standing. 2. Importantly modern, statutory definitions of 'professional misconduct' usually also have regard to the judgements of consumers of professional services. It will be seen that the meaning of 'professional misconduct' includes 'unsatisfactory professional conduct' in the degree described by paragraph (a). The definition of 'unsatisfactory professional conduct' directly refers to the judgement of the consumer, with the result that consumer judgment is incorporated into the statutory definition of professional misconduct. Section 496 provides: 496 Unsatisfactory professional conduct For the purposes of this Act: unsatisfactory professional conduct includes conduct of an Australian legal practitioner occurring in connection with the practice of law that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent Australian legal practitioner. 1. There is no dispute by the respondent that the conduct in which he engaged warrants a finding of professional misconduct. We agree. It amounted to professional misconduct in the common law sense. It also amounted to professional misconduct in the sense that the underlying conduct amounted, at the least to unsatisfactory professional conduct, and was of such a substantial degree that it would amount to professional misconduct. Appropriate Disciplinary Order 1. In Dupal v Law Society of New South Wales (unreported, NSW Court of Appeal, 26 April 1990) the Court emphasised in the strongest terms that fidelity in the management and the use of trust funds is at the heart of the confidence reposed in the legal profession by the community, and that a practitioner who engages in misappropriation can expect to be removed from the profession. Kirby P said that in cases of misappropriation the usual order should be one of striking off: ... 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 to the right to practise when such misuse of funds is discovered. 1. Handley JA, with whom Priestley JA agreed, said: Counsel were not able to refer us to any case where a solicitor found guilty of misappropriation or wilful contraventions of [applicable statutory provisions relating to holding of trust moneys in trust] has not been struck off the roll. 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 monies entrusted to their charge.. 1. As noted by Gleeson CJ In A Solicitor v Council of the NSW Law Society [2004] HCA 1; 216 CLR 253; 204 ALR 8; 78 ALJR 310 at [15]: ... [N]ot all cases of professional misconduct justify or require a conclusion that the name of a practitioner should be removed from the roll. Where an order for removal from the roll is contemplated, the ultimate issue is whether the practitioner is shown not to be a fit and proper person to be a legal practitioner of the Supreme Court upon whose roll the practitioner's name presently appears. 1. The Courts have also recognised that: ...[A]n isolated incident, or even incidents which would fall within the Allinson criteria would not necessarily demonstrate unfitness to practice, requiring removal from the roll. Particularly may that be so where the incidents arose in the past and the [practitioner] has taken steps to satisfy the relevant tribunal of his or her present fitness. (The Council of the New South Wales Bar Association v Sahade [2007] NSWCA 145 at [73] per Basten JA) 1. In Ex parte Lenehan (1948) 77 CLR 403 in the context of an application for readmission to the profession by a person whose name had been removed from the roll, Latham CJ, Dixon and Williams JJ said at 422: When … a person applies for reinstatement he is in a more disadvantageous position than an original applicant because he must displace the decision as to probable permanent unfitness which was the basis of his removal. A solicitor may be restored to the roll after he has been struck off, but the power to reinstate should be exercised with the greatest caution and only on solid and substantial grounds. 1. Based on this passage, a principle has developed that a statutory tribunal or the Supreme Court in the exercise of its inherent jurisdiction should only remove a lawyer guilty of professional misconduct from the roll if her or she is 'probably permanently unfit' to practise again. It was put this way by the Victorian Court of Appeal (Warren CJ, Ashley, Weinberg JJA) in Petsinis v Victorian Legal Services Board [2016] VSC 389 at [105]: There is a presumption that, having been struck off the roll, an individual carries a permanent defect that renders them unfit to be admitted to the Australian legal profession. 1. Recently, in Law Society of NSW v Shehadie (No 2) [2016] NSWCATOD 151 at [37]ff the Tribunal reviewed the relevant NSW authorities. They include New South Wales Bar Association v Murphy [2002] NSWCA 138. 2. There Spigelman CJ concluded at [27] that for a lawyer to be struck off the court or tribunal must be satisfied that he is 'permanently, or at least indefinitely, unfit to practise' to be struck off. In addition Giles JA (with whom Priestley JA agreed) said: 111. ...The difference between unfitness to hold a practising certificate and unfitness to be a legal practitioner may not be great in many cases. But the difference can not be overlooked. ... 113 ... Refusal, cancellation or suspension of a practising certificate upon determination of unfitness to hold a practising certificate is not punitive of the legal practitioner. It is protective of the public in the same manner as removal from the roll. Fitness to hold a practising certificate is to be assessed having in mind the high standards required of legal practitioners in the practice of their profession. The standards are required because the relationship between legal practitioner and client, between legal practitioners, and between legal practitioner and court is one of trust in the performance of professional functions, and because there must be confidence in the public and in those engaged in the administration of justice that legal practitioners will properly perform those functions. 1. In the present case, the respondent has engaged in an active program of rehabilitation since his suspension in April 2014, a suspension that he did not contest. In light of the steps he has taken, he submits that he should not be regarded as 'probably permanently unfit to practise' or to use Spigelman CJ's formulation 'permanently, or at least indefinitely, unfit to practise'. He should, he submits, be permitted to return to practice on a restricted basis in the first instance. 2. In our view at the time of the suspension decision, had the issue been whether the respondent had committed acts of professional misconduct, he would have been found guilty, and had it been possible to make a disciplinary order, there would have been an order to strike the respondent's name from the roll. He would have been found to have been a person lacking the good fame and character required of a member of the legal profession. 3. As we see it, we must approach his case in mitigation, in a not dissimilar way to that adopted by the courts in the readmission cases to which we have referred. The question is has the respondent undergone such a reformation of character that the public can be assured that he is now to be regarded as a person who has the good fame and character required of a member of the legal profession. 4. The often-cited statement of Walsh JA in Ex parte Tziniolos; Re Medical Practitioners Act (1966) 67 SR (NSW) 448 at 460-461 (approved Health Care Complaints Commission v Litchfield [1997] NSWSC 297; (1997) 41 NSWLR 630 at 637) applies to a case of the present kind: Reformations of character and of behaviour can doubtless occur but their occurrence is not the usual but the exceptional thing. One cannot assume that a change has occurred merely because some years have gone by and it is not proved that anything of a discreditable kind has occurred. If a man has exhibited serious deficiencies in his standards of conduct and his attitudes, it must require clear proof to show that some years later he has established himself as a different man. The position is somewhat similar to that which exists when application is made by a barrister or a solicitor who has been found guilty of serious misconduct exhibiting a lack of proper standards, seeking reinstatement on the ground that, after a lapse of time, he has become a fit and proper person to be a member of a profession which requires qualities and standards in which he has known to have been deficient. In such cases, it has been frequently said that a heavy onus lies on the applicant ... 1. In The Prothonotary of the Supreme Court of New South Wales v Dimitrious [2015] NSWCA 258, the solicitor had committed repeated acts of misappropriation, and had been convicted and served a term of imprisonment for fraud offences. He did not oppose the Prothonotary's application for his name to be removed from the roll. It remained for the Court to satisfy itself that such an order was appropriate. In that regard it noted that four years had passed since the misconduct under notice had occurred. Meagher JA referred to some matters that might have been raised by the solicitor by way of mitigation, and continued at [26]: 26.However, none of these matters is relied on in support of a submission that the respondent has reformed his character to such an extent that he is presently a fit and proper person to remain on the roll. Specifically, it is accepted that his criminal and other misconduct still speaks as to his present character and fitness to practise. Nor could it be suggested otherwise when the respondent, because of his circumstances, is not able to say that by his conduct over a number of years since his offending he has demonstrated that he is in relevant respects a "different man": see Health Care Complaints Commission v Litchfield [1997] NSWSC 297; (1997) 41 NSWLR 630 at 637 (approving what was said earlier by Walsh JA in Ex parte Tziniolis at 460-461). 1. In our view, this is a similar approach to the one we think should be adopted in this case (albeit a statement made in a case of a more extreme kind than this one). 2. In this case the respondent's essential position is that he has demonstrated in the period of suspension (18 September 2014 to the present time) that he has undergone a reformation of character sufficient to justify his remaining on the roll, in circumstances where without doubt had he not taken the steps to which we refer in further detail below he would have been struck off. The Respondent's Case in Mitigation 1. The respondent's case in mitigation relied on (a) his personal testimony as to the steps he had taken to rehabilitate himself in the period of suspension; (b) a number of medical and health reports; (c) several affidavits from a barrister and five principal solicitors, all of whom had been fully informed as to the nature of the disciplinary charges; and (d) his recent employment history. 1. The respondent gave oral evidence. The barrister, Dr Robert Webb, gave oral evidence in his support. None of the medical and health experts, or other professional referees were required for cross-examination. 2. We will refer, circumspectly in these public reasons, to the respondent's early life history. It is the context for much of what was put to us as an explanation for the respondent's stress and depression, and resort to alcohol, that gave rise to the respondent's misconduct. 3. The respondent grew up in a migrant family that came to Australia from England in 1974 when he was four. There were three children. He had a most difficult childhood, [CONFIDENTIAL]. 4. The psychiatric reports accept that a critical event of his childhood was the death of his mother in 1976 when he was seven. His father remarried, and the respondent personally witnessed violence in the home [CONFIDENTIAL]. He ran away from home at about the age of 14. He became a ward of state. He found the care environments in which he was placed to be supportive, but he missed not having enjoyed a good home life with his biological family. In 1999 he married. 5. The respondent did very well academically at school. He obtained a high score in his HSC. He initially pursued qualifications in accounting (at University of Technology, Sydney) while working in an accounting firm. The firm collapsed. He did not complete his accounting studies. 6. A few years later he commenced a Law degree at UWS and completed it with distinction in the year 2000 at the age of 31. He topped a number of courses, and won an international mooting competition. He was president of the law students' society. He become a member of the staff of the Law School, and worked there between 2001 and 2004. He taught various commercial law subjects and commenced work on a thesis for a higher degree. He decided ultimately to go into practice. As previously noted, he joined the firm that became Frontier Law Group in 2004. He was a founding principal of Frontier Law Group in 2006. (a) Personal Testimony 1. The respondent provided a full and frank apology for his conduct. He acknowledged that he cannot undo anything in his past, but that he had now set out to get assistance 'to identify, understand and eliminate my fragilities and defects of character, of what is right and to improve myself constantly'. 2. He noted that he had made full restitution to the Ramelis and Ms Penski, and to achieve that he had sold his home at Campbelltown. 3. He gave an account of his entry into an alcoholism rehabilitation program in early 2014 with the encouragement of Dr Webb, whose evidence we refer to in more detail below. After three days in the detoxification unit of the Campbelltown Hospital, he spent six weeks in the residential program ('Visible Recovery') in Adelaide from 18 March 2014 to 21 April 2014. In the period April to September 2014 he returned to his law practice part-time, and sought to make full and frank disclosures in relation to his conduct. He had expected that he would be suspended by the Council of the Law Society, as occurred in September 2014. 4. He referred to having a drinking problem well back into the 1990s, and having incurred a number of Driving Under the Influence convictions. He obtained a new driver's licence in 2014, and had not incurred any demerits points since that time, in 21,000 kms of driving. He had commenced consultation with Dr Disney, GP, in October 2014. 5. He had commenced working full-time with a building company with nine employees in January 2015. We refer below to the evidence of the owner of the building company, Mr Duguid. 6. The respondent referred to the lifestyle benefits for him in working in a well-run workplace, that is family friendly and conscious of the need for a work/life balance. He spoke of the strong support Mr Duguid had arranging for him to have life coaching. We refer below to the evidence of the life coach, Ms Berghan. He referred to the ways in his personal and wider family life her suggestions had worked for him. 7. He set out the range of programs and activities he had been involved in at Alcoholics Anonymous since January 2015. It is plain that he is deeply involved in activities such as the Tuesday Promises Meeting and at the higher administrative level of the organisation, as minute taker for meetings of delegates of the AA Service Council of New South Wales. 8. He referred frankly in his affidavit to the difficulties he has had over the years in dealing with feelings of withdrawal and isolation, and how the steps he has taken in the last three years have assisted him in addressing that problem. 9. He referred to the progress he had made in being able to socialise without needing alcohol. While he tended to avoid functions where alcohol might be served, he had continued to go to events of a special kind, such as wider family and social occasions where alcohol might be present. He had been able to manage those situations with increasing confidence. 10. He gave details as to steps he had taken to reintegrate into a wider social life with family, friends and former colleagues. 11. The respondent in his oral evidence said that he saw himself as on a graded path of recovery. If he were to be granted a restricted practising certificate, he believed that Mr Bielli, one of his professional referees, would be interested in employing him on a part-time basis initially. 12. His wife provided an affidavit. She explained that she was about 8 years older than the respondent. They had first met each other in a foster care home. [CONFIDENTIAL]. She said they started dating about 13 years later when he was 25 and a law student. 13. She said that the respondent had a drinking problem that went back before those days. She gave graphic examples, which we will not repeat in these reasons, of the stress the respondent had encountered because of his experience of childhood. [CONFIDENTIAL]. She referred in deeply personal terms to the difficulties that had affected their marriage because of his drinking, [CONFIDENTIAL]. She referred warmly to the efforts he had made since the Law Society investigation to turn his life around, and the many positives of their lives today. (b) Health Reports 1. The expert reports were detailed and comprehensive, especially in relation to the respondent's early life history, his state of mental health in the period under notice in the proceedings and possible explanations for his alcoholism and the way acted in the matters under notice. 2. At the request of the respondent's lawyers, Dr Stephen H Allnutt, forensic psychiatrist, has examined the respondent on three occasions, see reports dated 20 October 2014, 22 March 2016 and 21 October 2016 (four days before our hearing). 3. Dr Robert Disney is the respondent's GP. He provided a report, dated 16 May 2016. In the course of his treatment, he referred the respondent to a psychiatrist, Dr Kathryn Watson, and a psychologist, Mr James McIntosh. They provided reports dated, respectively, 31 July 2015, and 17 May 2016. The Watson report is brief and covers similar ground to Dr Allnutt's report. We will not refer to it any further. 4. In addition, Beth Berghan, who has a substantial background in teaching and psychology, and describes herself as a 'Personal, Business and Executive Coach', has supplied a detailed report, dated 17 May 2016, relating to life coaching sessions she has conducted with the respondent. 5. The following emerges from this material. 6. In his interviews with Dr Allnutt, he spoke of the stress and depression that he has experienced throughout his life. He saw them as founded in his horror childhood, and his seeking of relief as he grew up through alcohol. He gave an account of engaging from his early years in practice in regular binge drinking. He spoke of major episodes of depression when the accounting business collapsed in which he had hoped to make a career, [CONFIDENTIAL]. 7. Dr Allnutt's first report refers to his state of health in the period 2009-2011. In general terms, it describes a person heavily dependent on alcohol and various medications. 8. In that report, Dr Allnutt recorded the respondent as attributing his misconduct in relation to the Ramelis and Ms Penski as due to persistent alcohol consumption at the time. 9. Dr Allnutt considered that the episode in 2001 [CONFIDENTIAL] had triggered a major depressive event. Viewed overall, and as he presented in 2014, Dr Allnutt considered that the respondent has 'likely suffered chronic low-grade fluctuating depression through the years, consistent with what is known ... as a dysthymic disorder and ... is now known as a persistent depressive disorder'. 10. Dr Allnutt explained that this condition gives rise to mood disorders, and sometimes people use alcohol to seek to manage downturns. He said that the respondent's 'alcohol abuse in turn had likely been aggravating his mood'. He would not diagnose him with a personality disorder. 11. Dr Allnutt referred in his conclusions to the respondent's difficult childhood history, the poor parenting of his early years, the traumatic effect of the death of his mother, the fact that after he ran away at 14 that he spent many years until his early 20s in foster care. He referred to the grave level his alcohol dependence had reached after 2006, and how it may well have impaired his professional work on a very regular basis. 12. When the respondent presented for examination, Dr Allnutt considered that he had come to understood the seriousness of his actions, its unprofessional nature and was contrite and remorseful for his actions. Dr Allnutt recommended that he continue his Alcoholics Anonymous program, have regular contact with a drug and alcohol counsellor and consult regularly a psychologist. This has all taken place. 13. In later reports (12 March 2016, 21 October 2016), Dr Allnutt referred positively to the respondent's progress. He considered (12 March 2016) that he 'progressed significantly in his recovery from alcoholism and is regarded as now being in remission'. Dr Allnutt referred to a breadth of social and personal indicators (for example stable relationship with his wife, reaching out to other family members, pursuing regular social interactions with peers and others) that pointed to major life improvements, and had contributed to his symptoms of depression not being active. 14. We are satisfied that the respondent has been abstinent from alcohol since 18 March 2014 when he entered into the six week residential rehabilitation program. He has been actively involved in AA programs since ending that program, as well as wider administration of the AA. 15. In regard to his AA activities, there are affidavits from Witness A, a senior official of the AA Service Council of NSW, Witness B, a recovered alcoholic and long term active member of the AA in NSW, and Witness C, a member of groups that the respondent has been active in. They all spoke in glowing terms of the efforts the respondent has made to address his drinking disorder, and his pastoral contribution to others with similar problems and of his contribution to the wider organisation. 16. His GP, Dr Disney, gave an account of his history of treatment of the respondent, and the results of check-ups in the period 16 October 2014 to 16 May 2016. He emphasised the results of liver function checks which were good, and normal, consistent with a healthier diet, regular exercise, and consistent with the respondent's report of regular abstinence from alcohol. 17. Mr McIntosh's report (17 May 2016) is the result of seven treatment sessions, and includes some scorecard tables going to such matters as shifts in anxiety, stress and depression levels across those sessions. They each show significant progressive reductions in levels of anxiety, stress and depression. [CONFIDENTIAL]. The report referred positively to the steps he is now taking to manage his childhood trauma. It referred positively to improvements in the management of his personal life, health, and well-being. Mr McIntosh considered that the respondent had presented as an individual with 'an extensive and considered network of mental health supports that was well established'. 18. Ms Berghan's report (17 May 2016) referred to 31 coaching sessions of about an hour that had taken place since 9 July 2015 and usually about a week apart. She referred positively to the progress the respondent has achieved in such matters as managing anger and frustration, and in owning his feelings and behaviours. She referred to his acknowledgment of the wrongness of his actions, and the role the failure to manage his personal life had in their occurrence. She described him as very intelligent and very committed to his recovery. She noted that his relationship with his wife had improved, he had reconnected in a positive way with a sister, he worked well with his colleagues in the workplace, and generally had improved relations with his former colleagues and peers. (c) Professional Testimonials 1. The respondent's professional colleagues universally expressed surprise and dismay over the conduct in which he had engaged. Equally they spoke positively of the competence he had displayed in their dealings with him. We found Dr Robert Webb's affidavit and oral evidence to be of great value. 2. Dr Webb had been regularly briefed by the respondent in serious criminal matters over several years between 2006 and 2014. They have become friends. We accept Dr Webb's evidence that the respondent had in his experience shown a deep respect for the law, and that he has profound intellectual capacities. 3. Dr Webb considered that some of the criminal cases in which they had worked together had themselves had a deep psychological impact on the respondent. He referred in particular to two cases where the victim was a young child, and the evidence and circumstances had deeply affected the respondent. In the first of these cases the respondent had acted for a father ultimately found guilty of both the murder of his eight year old daughter and her mother, his wife. In the second case his firm had acted for a school principal accused of engaging in serious sexual misconduct with a number of students. In Dr Webb's judgement, the subject-matter of these cases revived in the respondent's mind his own experience of abuse in his childhood home. Our understanding is that it is this concern that gave rise to the respondent's proposal that a practice condition be imposed that did not allow him to work on cases involving violence to children and the like. 4. Dr Webb referred in his affidavit to his observations of the respondent's difficulty with alcohol in the period 2008 to 2011. He became aware of the problem when they worked together on the murder case mentioned. He described the respondent at that time as a heavy drinker, and 'functioning alcoholic'. He observed the respondent in significant states of inebriation on occasions, and noticed that he was remaining in the CBD after work and drinking for some time before returning to Campbelltown. 5. Over the summer of 2012-13 he encouraged the respondent to deal with his drinking, and encouraged him to consider joining Alcoholic Anonymous. The respondent did not act on the suggestion at that time, and continued to drink heavily. He did mention to Dr Webb the disciplinary complaint in the Rameli matter. He offered to assist him professionally. Dr Webb continued to encourage the respondent to deal with his drinking problem, and this time the respondent accepted his advice. He entered into a six week residential rehabilitation program in early 2014, held in South Australia. Dr Webb has continued to have regular contact with the respondent. 6. Dr Webb said that the respondent had expressed to him deep embarrassment and shame over what he had done. He had no doubt that the respondent has abstained from alcohol since March 2014. He had often spoken to him by phone in the evenings and he was clear in mind and speech. 7. He promised to stand by the respondent. He recommended that in the early stages of any return to practice by the respondent, he should not take instructions in matters involving the grave abuse, murder or sexual molestation of children. In Dr Webb's view, they are difficult for the respondent given his experiences in the course of his formative years. 8. Several of the solicitors who provided themselves were, like the respondent, from the western Sydney area, and gave detailed accounts with a strong personal flavour of their relationship with the respondent. They referred very positively to the assistance the respondent had given to many of them, and about his alcoholism at the time of the conduct under notice. 9. Mr John Karacan, solicitor, Auburn, said that he had known the respondent since 2001 when he, Mr Karacan, was a later-age student in law at UWS Macarthur Campus. The respondent lectured in company law. Mr Karacan spoke very positively about his qualities as a teacher and the comprehensiveness and quality of his teaching materials. He spoke positively of the respondent's communication skills and teaching ability. He recounted how shocked he was when the respondent told him about the disciplinary charges, and referred to the respondent's acknowledgement of the wrongs he had committed. He considered that the steps the respondent had taken by way of rehabilitation had been very successful, and the respondent had now turned his life around. 10. Mr Carlos Bielli, solicitor, Campbelltown, gave a frank account of his observations of the respondent's descent into alcoholism, for example that it was common knowledge that he would not be contactable after noon on Friday, as he would be having a long lunch. He had maintained regular contact with the respondent during his suspension. He had noticed a considerable improvement in him, and spoke positively of his attendance at social gatherings, with his wife, and his refusal to have any alcohol though it is served at these events. He felt that he had made significant strides in his recovery. He spoke positively on the positive effect of the AA programs. 11. Mr Tihomir Novakovic, solicitor, Edmonson Park, also gave a very personal account of his interaction with the respondent, as did Mr John Stonham, solicitor, Campbelltown. They, like the other referees, considered that the respondent could be trusted to return to practice, and expressed strongly the belief that he was most unlikely to reoffend. Recent Employment 1. Mr Daryl Duguid, a friend since 2004, has given the respondent strong support in his efforts at rehabilitation. Mr Duguid is a builder, and his building company's work includes small development work projects. He has employed the respondent in his company since November 2014, initially on a part-time basis, and since January 2015 on a full-time basis. 2. He gave a very detailed account of the way in which the respondent had worked with staff, been open with him and them about his personal history and recent problems, and the contribution he made to assisting workmates and others with personal problems. He like a number of the professional referees gave an account of the respondent's heavy drinking in the years in and around 2004 to 2013. He gave an account of what the respondent had told him in 2013 about his disciplinary problems, and his decision in 2014 to undertake rehabilitation. He, like the professional referees, spoke very positively of the way the respondent had turned his life around. He expressed the strong view that the respondent had transformed himself. 3. He detailed the nature of the respondent's duties with the business. He undertakes, under Mr Duguid's general direction, all the work required to progress the small residential property development projects that the company undertakes. This includes such work as identifying and researching potential development sites, and making proposals to owners, developing the documentation required, liaising with council and other development authorities, preparing submissions and making representations. He spoke highly of his organisational skills, his ability as a communicator and negotiator and his meticulousness with paperwork and computerised files. Assessment 1. Disciplinary orders serve a range of purposes. Most importantly they serve to protect the public against practitioners who lack honesty, integrity or competence to the degree that their continuation in practice presents a danger to the public. Disciplinary orders also serve to remind other members of the profession who may be tempted to engage in similar conduct of the consequences that will befall them if they do. 2. 'Lawyers are expected to act and must act with scrupulous honesty when discharging their obligations generally, and specifically with respect to the receipt and payment of monies on behalf of client': Dimitrious at [21] per Meagher JA. The transfer of money out of trust and into a general office or personal account is always a serious step which must be undertaken strictly in accordance with relevant rules and requirements. Often those rules and requirements can be complex, but they must be observed, most notably those that require specific authorities from clients. That is why the breach of trust account rules when accompanied by dishonesty will most likely result in the removal of the practitioner from the profession. 3. In this instance the respondent offended gravely in matters of honesty (misappropriation) and integrity (conflict of interest). His general competence is not in issue in the proceedings. 4. There is, we think, little doubt that the respondent has undertaken a serious multi-faceted program of rehabilitation, which has sought to address in specific ways the defects of character and lifestyle that gave rise to his misconduct. 5. In his adult life he has recorded a number of impressive achievements (his exceptional academic record, his success in a number of other capacities at UWS, establishing a law practice), especially when set against the disadvantage and trauma of his childhood and teenage years. He has a number of professional referees who know him well, have been there for him in his struggle with alcoholism and stress, and have remained highly supportive. He has been frank with them in relation to his misconduct. He has maintained a stable personal and home life, in difficult circumstances, with the strong support of his wife, as we have explained. 6. As we have explained above, a respondent who has been under suspension in the public interest pending the conduct of professional discipline proceedings must satisfy us that he has undergone a reformation of character that shows he is now a different person. 7. We accept that the respondent is now actively confronting the behaviours, notably dependence on alcohol, which was marked during his years as a practitioner. 8. We accept that the respondent has taken significant steps to address his past addiction to alcohol in a determined way, which has been successful, and is likely to remain so. He has re-engaged with his surrounding community in a positive way. He has not hidden his history and failings from those close to him, and other practitioners. We have no doubt that his childhood history has had a significant ongoing effect on him. We expect that this will remain a psychological and emotional hazard for him. He is addressing that. 9. We accept that he is genuinely remorseful for his actions, and contrite. We think that there is little likelihood that he will reoffend. 10. He has used the period of his suspension to get his life back in good shape. He has made a success of his return to the workforce. His employer has been very supportive, and his analytical and organisational skills are being used to good effect. He is active in the affairs of AA. 11. We remain uncertain as to the degree to which it can be said that alcohol contributed to acts of misconduct under notice in these proceedings. His case is that the condition that gave rise to his misconduct was the impairment of his judgement occasioned by the degree of his alcoholism. Dr Allnutt did canvass in his report the possibility that he had a diminished ethical understanding of his obligations due to his alcoholism but reached no final conclusion. 12. On its face, the respondent chose consciously to do whatever it took at that time to secure the Campbelltown property, and acted out of greed. His conduct involved a high degree of organisation and planning. He took a number of administrative steps that were perfectly executed to procure the Campbelltown purchase and divert the Ramelis' money to that end. Clearly he took advantage of the Ramelis' established and trusting relationship with him. He comprehensively abused that trust. Similarly, he let down Mrs Penski in not ensuring that the protective arrangements were in place (caveats) in relation to the interest she had acquired as a lender on the security of the Campbelltown and Leumeah properties, and in not ensuring that the second unregistered mortgage he had promised was executed. 13. We did not have any material before us from a psychiatrist or health practitioner that addressed precisely the interconnection between the respondent's stress and depressive attributes and the conduct which occurred. Dr Allnutt's reports were guarded, in our opinion, in that respect. 14. The professional assessment is that his alcoholism is now in remission. We think that a longer period of remission than two to three years needs to be demonstrated, before we could be satisfied that the respondent's reformation of character has reached the point that we could conclude that he is presently fit to practise. 15. The respondent referred us the decision of the Supreme Court of Victoria (Habersberger J), XY v The Board of Examiners [2005] VSC 250 in which the Court overruled that State's admission body, the Board of Examiners, and declared that the appellant was a fit and proper person to be admitted to legal practice. She had a history of alcoholism, a criminal history and had suffered from psychiatric disorders. The critical difference between the history with which the Court was dealing there and the present case is that the appellant's prior history involved personal conduct and behaviours unconnected with the practice of law. It is clear that the Court was satisfied that the point had been reached where the impediments to the appellant's application for admission had been thoroughly addressed. We consider that the misconduct of which he has been found guilty continues (adopting the words of Meagher JA, cited earlier, in Dimitrious) to speak to his present character and fitness to practise . 16. However we do not think that this is an irreparable situation. We would wish to encourage the respondent to continue on the course of rehabilitation he has started. We do not think it not out of the question that he might be permitted to return to the practice of law, perhaps first as a law clerk, in the near term. Our view is similar to that expressed by Kirby P in the closing paragraphs of Dupal. It is clear that the respondent is putting in place good building blocks for an application for reinstatement to the profession. 17. We have therefore concluded that the appropriate order is, as submitted by the Law Society, one that his name be removed from the roll of lawyers. 18. Because of this conclusion, we need not focus on the detail of the orders proposed by the respondent, which essentially involved the placement of practice and health conditions on the practising certificate. We will however comment on one of them, in case the issue arises again in future. We do not think there is any point to be served by a restriction on dealing with cases involving children. Such a condition would suggest to those made aware of it that there might be something in the respondent's past by way of misconduct towards children that has given rise to the condition. That was not the basis of the proposal in this case. The proposal was made to assist the respondent to avoid the stress and trauma that might be caused by the revival of memories of abuse he had suffered or been exposed to. 19. In our view, as the Law Society submitted, the practice of law cannot be sensibly carried on with a restriction of this kind. It is for the respondent to demonstrate in due course that his state of mental health is such that he can be trusted to practise in cases where the interests of children are involved in a manner which does not give rise to a health crisis that might lead to misconduct. This issue is one we think that is best managed within a health conditions framework rather than a practice conditions framework. Costs 1. The Law Society applied for its costs of the proceedings. It is entitled to an order for its costs where, as here, there is a finding of professional misconduct against the practitioner, unless the Tribunal is satisfied that there are 'exceptional circumstances' warranting no such order: Civil and Administrative Tribunal Act 2013, Sch 5, cl 23(1). The respondent did not oppose such an order up until 1 June 2016 (the date of filing of the Amended Reply). The respondent had, as we understood the submissions, hoped that the matter could be resolved by agreed orders with conditions along the lines of his proposed orders in this matter (see para [55] of the submissions). The submission depends for the establishment of 'exceptional circumstances' or an outcome in the Tribunal which is favourable to the respondent's proposed disposition. The Tribunal has not reached that conclusion. There are, therefore, no arguable exceptional circumstances that might warrant a departure from the usual rule. Orders The Tribunal finds the respondent guilty of professional misconduct. The Tribunal orders that the name of the respondent be removed from the local roll. The respondent pay the applicant's costs, 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: 10 April 2017