Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Law Society of New South Wales v Do [2018] NSWCATOD 151 Hearing dates: 24 August, 2018 Date of orders: 05 September 2018 Decision date: 05 September 2018 Jurisdiction: Occupational Division Before: Hon F Marks, Principal Member M Sindler, Senior Member B G Thomson, General Member Decision: 1. The name of the respondent Tien Ngoc Do (also known as Ngoc Tien Do) is removed from the roll of local lawyers. 2. The respondent is to pay the costs of the applicant in an amount assessed in default of agreement Catchwords: Legal practitioner – application for disciplinary findings – application undefended – numerous incidents of failure to maintain trust account and failure to account for monies received – held respondent guilty of professional misconduct – held removal from roll is appropriate protective order – costs order made Legislation Cited: Evidence Act 1995 Legal Profession Act 2004 Legal Profession Regulation 2005 Category: Principal judgment Parties: Council of the Law Society of New South Wales (Applicant) Tien Ngoc Do (also known as Ngoc Tien Do) (Respondent) Representation: Counsel: C Flax solicitor (applicant) Solicitors: Law Society of NSW (applicant) File Number(s): 2018/0082129 Publication restriction: Non-publication order of the name of any former client of the respondent and any information which may tend to identify any such former client reasons for decision Background 1. The applicant in these proceedings, the Council of the Law Society of New South Wales filed an Application in this Tribunal seeking certain disciplinary findings and orders against the respondent Tien Ngoc Do (also known as Ngoc Tien Do), a legal practitioner formerly practising as a solicitor in NSW. The applicant alleges that in the course of his dealings with eight clients, the respondent conducted himself in a manner which constituted professional misconduct and justifies his removal from the roll of legal practitioners. The respondent did not participate in the proceedings in any way and they were conducted entirely on an ex parte basis. This necessitated the applicant in arranging for personal service of all documentation including evidentiary material necessitated by the failure of the respondent to appear. 2. The background information which follows is based upon material filed by the applicant which we have admitted into evidence pursuant to the provisions of the Evidence Act 1995. 3. For completeness, the findings which we make in these reasons for decision have been made applying the well-known Briginshaw standard, requiring a higher degree of satisfaction in the context of the civil onus of proof. 4. For completeness we note also that the relevant legislation which applies to these proceedings by reference to the dates upon which the misconduct of the respondent which we have found to have been established occurred is the Legal Profession Act 2004 ("the Act"). 5. The respondent was born on [date], 1959. He was admitted to the roll of legal practitioners on 27 August, 1999 and held a NSW practising certificate from that date until 20 April, 2015 when his practising certificate was suspended by the applicant. The respondent was the sole principal of a law practice known as Tien Ngoc Do & Co from 7 April, 2006 to 20 April, 2015. 6. During the period 11 March, 2015 to 18 May, 2015 the applicant received a number of complaints from the Office of the Legal Services Commissioner involving a number of persons who were alleged to be clients of the respondent with a request, ultimately, that the applicant investigate them and initiate formal complaints against the respondent following that investigation. The applicant appointed Mr James Sofiak who was employed within the applicant's Trusts Accounts Department to investigate the complaints. Mr Sofiak conducted a detailed investigation and prepared a report which has become evidence in these proceedings. That report includes extracts from the respondent's files and banking and accounting records as well as records from a receiver appointed by the applicant to the respondent's practice . In addition to this report, affidavit evidence was tendered referable to the circumstances of each of the eight clients of the respondent. The discussion of the circumstances pertaining to each of the clients which follows is based on the evidentiary material which has been tendered before us. 7. We shall now proceed to outline the circumstances with respect to each of the clients of the respondent. In doing so we shall describe those circumstances in a manner which will protect their anonymity. Ms N 1. The allegation is that the respondent breached section 254 of the Act and, in addition, misappropriated trust funds. Section 254 is in the following terms; 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. (4) (Repealed) (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. 1. The evidence is that Ms N instructed the respondent to act on her behalf in about May 2004 in the purchase of an interest in a property, the balance of which she already owned. No purchase price had yet been agreed. She paid $1000 to the respondent on account of his professional costs and a further $1980 in court fees. The respondent advised her some three months later that he had negotiated a purchase price in the sum of $40,000. In fact, as it transpired, no such agreement had been negotiated by the respondent. Between 5 August, 2014 and 13 February 2015 the client paid to the respondent seven instalments of $2000 each for him to hold on account of payment of the purchase price. 2. On 5 March, 2015 Ms N instructed a different solicitor to act for her. A verified statement by that solicitor indicates that he endeavoured to negotiate a return by the respondent of the $16,980 which had been paid by the client who prevaricated to such an extent that he notified the Law Society. 3. On 17 April, 2015 the respondent gave Ms N a bank cheque drawn in her favour in the sum of $15,980. Inquiries conducted by the applicant show that that cheque was purchased by a third party from a cheque account in that third party's name. There is no indication that the monies paid by Ms N were paid into a trust account and, indeed, the evidence in these proceedings is that the respondent did not at any stage operate a trust account as required by the provisions of the Act. 4. We are comfortably satisfied, to the requisite standard, that the respondent was in breach of section 254 of the Act in that the monies paid to him by this client were not paid into a trust account. In that there is no evidence available that would indicate that in some way the respondent had held those particular monies on behalf of this client, it follows that the monies must have been misappropriated in the sense that they had been applied in some manner inconsistent with the creation of a trust over the monies in favour of the client. Mr L 1. The applicant alleges that the respondent acted for this client on the sale of a property and failed to account for the sum of $2,813.94 being part of the proceeds of sale. On 9 September, 2014 the respondent wrote to the purchaser's solicitors authorising a payment in his favour of a bank cheque for the sum of $2,813.94 being part of the proceeds of sale. On the evidence, the client did not authorise the respondent to deduct these monies from the proceeds of sale. Mr Sofiak was able to trace the negotiation of this cheque. It was paid into an account in the name of the respondent which was not designated in any way as a trust account. The deposit was made on 11 September, 2014. Two days later the sum of $2800 was withdrawn from that account in cash. As at the date his practising certificate was suspended, the respondent had not accounted to the client for the monies received on the sale. Nor is there any evidence that the respondent created a tax invoice or any other document which might arguably have justified him in retaining those monies to his own account. 2. We are comfortably satisfied that the respondent inappropriately and without authorisation paid those monies to himself. V and V 1. The applicant alleges that the respondent acted for these persons in the purchase of a property and that he failed to arrange for the registration of the transfer of title to them of that property and failed to account for monies which they had paid to him. 2. The evidence is that these clients made a cash payment to the respondent of $1,249.25 on 12 March, 2014 with respect to stamp duty payable on their purchase. At no stage did the respondent issue them with a receipt for those monies. There is also evidence that these clients gave the respondent a bank cheque which they had purchased in favour of the Office of State Revenue in the sum of $8,835.00. There is an allegation that the respondent failed to account for those monies also. However, in circumstances where that cheque was made payable to a third party and was not intended to be paid to the respondent to be dealt with in accordance with their instructions, we reject any allegation that the respondent was guilty of any misconduct in failing to furnish a receipt for that bank cheque. 3. There is evidence that settlement of the purchase was effected on 14 May, 2014. The respondent informed these clients that he would arrange for registration of the transfer of title. As at the date of his suspension from practice namely 20 April, 2015, that registration had not been attended to. We observe that this represents an inordinate delay in attending to such a routine matter. 4. We are comfortably satisfied that these allegations, confined however to receipt of the cash payment on 12 March, 2014, have been established. Ms H 1. This client instructed the respondent to act for her in connection with an application for divorce. The applicant alleges that the respondent failed; 1. to carry out her instructions with respect to the divorce application 2. to provide her with a costs disclosure agreement 3. to account to her for payments made 4. to provide her with receipts in breach of rule 61 of the Legal Profession Regulation 2005 1. In addition, the applicant alleges that the respondent made threats to this client that he would not complete the work or release documents to her until she had retracted a complaint made about his professional conduct. 2. There is documentary evidence consisting of file notes made by the respondent contained in his file concerning this client recording instructions to act for her given on 2 September, 2013. There is a handwritten notation on those notes indicating that the client had paid the respondent that day two amounts totalling $285. 3. Included within the instructions was the transfer of an interest in a property from the husband. The respondent issued a tax invoice to Ms H dated 7 September, 2013 for professional fees for acting on the financial agreement and transfer of property in the sum of $1,200 said to be inclusive of GST. He issued a receipt that day for payment of that amount. A copy of that receipt is in evidence. It appears to have been issued on receipt books available at news agencies and stationers. A printed number appears on the document followed in handwriting by the date, the name of the client, the amount paid and the fact that it was for "Financial Agreement and Transfer". Then follows a signature. There is no reference to the name of the law practice being conducted by the respondent. As at the date of payment of those monies and the issue of the receipt, it is clear that the respondent could not have performed the work with respect to which the tax invoice had been issued. On this basis, as is obvious, the monies should have been paid into a trust account maintained by the respondent. There is evidence that the respondent did not maintain any trust account. For present purposes we note that the receipt makes no reference to the monies having been paid into a trust account. 4. Rule 61 of the Legal Profession Regulation 2005 is in the following terms; 61 Receipting of trust money (1) This clause applies if a law practice receives trust money that is required to be paid into a general trust account. (2) After receiving the trust money, the law practice must make out a receipt. (3) The receipt must be made out as soon as practicable: (a) after the trust money is received, except as provided by paragraph (b), or (b) in the case of trust money received by direct deposit—after the law practice receives or accesses notice or confirmation (in written or electronic form) of the deposit from the ADI concerned. (4) The receipt, containing the required particulars, must be made out in duplicate, whether by way of making a carbon copy or otherwise, unless at the time the receipt is made out those particulars are recorded by computer program in the trust account receipts cash book. (5) For the purposes of subclause (4), the required particulars are as follows: (a) the date the receipt is made out and, if different, the date of receipt of the money, (b) the amount of money received, (c) the form in which the money was received, (d) the name of the person from whom the money was received, (e) details clearly identifying the name of the client in respect of whom the money was received and the matter description and matter reference, (f) particulars sufficient to identify the purpose for which the money was received, (g) the name of the law practice, or the business name under which the law practice engages in legal practice, and the expression "trust account" or "trust a/c", (h) the name of the person who made out the receipt, (i) the number of the receipt. (6) The original receipt is to be delivered, on request, to the person from whom the trust money was received. (7) Receipts must be consecutively numbered and issued in consecutive sequence. (8) If a receipt is cancelled or not delivered, the original receipt must be kept. 1. There is evidence that Ms H paid a further sum of $285 on 7 September, 2013, but no evidence of any receipt having been issued, even an inadequate receipt of the same kind issued for payment of the sum of $1,200. This client paid a further sum of $500 for professional fees for acting with respect to the divorce application on 20 January, 2015. There is in evidence a handwritten receipt issued that day for that amount, which is in the same form as described above with respect to the payment of $1,200. 2. The report of Mr Sofiak following his perusal of the respondent's file indicates that there was no cost agreement or costs disclosure agreement contained within the papers. 3. There is in evidence a copy of the Application for Divorce prepared by the respondent dated 20 January, 2015, but which was not filed, on the evidence, until 19 March, 2015. 4. The allegations concerning threats made by the respondent that he would not complete the work or release the file unless allegations of misconduct were withdrawn by Ms H were contained in a letter written by the client's son. In that the contents of that letter were not verified in any manner, we are not satisfied that it is appropriate to receive them as proof of the allegations made, and we do not find this aspect of the complaint with respect to this client proven. 5. However, we are comfortably satisfied that the remainder of the allegations made with respect to the conduct of the respondent concerning this client have been made out. There is no evidence of any costs agreement, and the two receipts clearly did not comply with the provisions of Rule 61 set out above because, essentially, there was no reference of any kind to a trust account. Furthermore, there was an unexplained and inordinate delay in prosecuting the divorce proceedings on behalf of the client, despite evidence of her complaints concerning the delay. Mr D 1. The applicant alleges that the respondent failed to carry out the instructions of this client with respect to a divorce application and failed to account for a payment made by the client to him. 2. There is evidence that the respondent was instructed to act with respect to the divorce application in about September 2014. On 17 September, 2014 the client paid the respondent $900 on account of professional fees. The client said that he had never been given a receipt. Investigations carried out by Mr Sofiak indicated that there was no file that could be located in the respondent's records relating to this client, and there was no evidence of the sum of $900 having been received by the respondent in the course of conducting his practice. 3. Mr Sofiak was able to locate a cheque written on 12 February, 2015 on the personal account of the respondent for the sum of $900 made payable to another firm of solicitors subsequently retained by the client to act for him. A letter obtained by Mr Sofiak from those solicitors dated 9 March, 2015 indicated that they had endeavoured to obtain from the respondent the client's file and a refund of the $900 paid. They eventually received the cheque dated 12 February 2015 which was dishonoured by the respondent's bank on presentation. They were informed by the respondent that he did not hold any file in the matter. 4. We are comfortably satisfied that these allegations have been made out. The respondent failed to issue a trust account, or indeed any, receipt for the monies paid, and failed to progress the matter on behalf of the client in an appropriate manner. Ms L 1. The applicant alleges that the respondent failed to carry out instructions given by this client to transfer her father's interest in a property to her, failed to account to her for payments which she made to him and charged her for work which was not performed. 2. There is evidence that the respondent was first instructed in this matter in about April 2014. 3. There is in evidence a report prepared by the receiver appointed by the Law Society to the practice of the respondent concerning this client. The client paid the solicitor $11,265 on account of stamp duty in two payments, the first for $6,735 on 17 April, 2014 and the second for $4,530 on 9 December, 2014. The first payment was paid into a bank account operated by the respondent in the name of his firm as a cash deposit and the second into the same account. This was not a designated trust account. The deposit of the payment of $6,735 on 17 April, 2014 put that account into credit in the sum of $6,232.67. A withdrawal of $2,000 was made from that account on the same day, and two further withdrawals each in the sum of $2,000 were made on 18 April, 2014. This rendered that account in credit in the sum of $232.67. 4. We are comfortably satisfied that the payment by this client of $6,735 on 17 April, 2014 was paid into that account, clearly not being a trust account, and monies were disbursed by the respondent from that account in the manner described. 5. Evidence provided in the receiver's report after perusal of the respondent's file is to the effect that the respondent did not perform any work until December 2014 when he prepared a form of transfer. However the transfer was never registered, nor was a valuation obtained despite the client having paid two sums of $500 and $300 in December 2014 with respect to costs, and $710 for a valuation report on 7 April, 2014. There is no evidence of the respondent having arranged for a valuation to be conducted. There is no evidence of any of these monies having been paid into any trust account, nor of any documentation issued by the respondent which could be characterised as accounting in some manner for payments made by the client. 6. It follows that we are comfortably satisfied that the allegations made by the applicant with respect to this client have been made out. Mr Tr 1. The applicant alleges that this client retained the respondent in connection with the purchase of a business. It is alleged that the respondent failed to carry out his instructions, failed to account for payments made to him by the client and failed to provide the client with receipts for those payments. 2. There is in evidence correspondence from solicitors acting for the vendors of the business addressed to the respondent. This commences in 27 October, 2014 when a request is made to provide the name and address of the purchaser. Further correspondence was forwarded to the respondent on 20 March, 2015 enclosing a copy of a lease and disclosure statement to be inserted in the contract. A draft contract for sale was again forwarded on 17 April, 2015. On 23 April, 2015 the vendors' solicitor advised that the vendor was no longer proceeding with the sale. 3. On or about 30 October, 2014 the client paid the respondent $500 on account of professional fees and on 31 March, 2015 he paid the respondent $6,225 for stamp duty. These payments were made in cash. The client said that he had never received a receipt for the payment of these monies and there is no record in the respondent's files of any receipt having been issued. There is, however, an "instruction sheet" found in the respondent's file noting that $500 was paid on 30 October, 2014 and noting also a payment of $6,225 for "OSR". The Receiver of the respondent's practice was unable to find any record of the payment of those moneys. 4. We are comfortably satisfied on the basis of the evidentiary material made available to us that the allegations concerning this client have been made out. Mr and Mrs T 1. The applicant alleges that the respondent acted for these clients on the sale of a property, and failed to account to them for monies payable to them from the proceeds of sale and failed to provide them with receipts for payments made to him. 2. Evidence provided from the file of the receiver of the respondent's practice including statements made by the clients is that shortly before the proposed settlement of the sale the respondent informed the clients that there was an amount outstanding for land tax in connection with several properties owned by them. The respondent said that he would arrange for an adjustment to be made with respect only to the property being sold and asked the clients to furnish him with the sum of $1,356 for this purpose. They paid him that money in cash. 3. A settlement direction letter issued by the respondent to the purchaser's solicitors bearing date 24 February 2015 requested payment of the balance of purchase monies including an amount of $6,126.65 to the Office of State Revenue, and $4,350 in favour of Ngoc Tien Do. Settlement was effected the following day. The receivers were unable to trace what happened to the bank cheques issued for those amounts. 4. We note that the bank cheque was issued in favour of Ngoc Tien Do. There is evidence in the proceedings that the respondent used this name from time to time in lieu of the name under which he was registered to practice law, namely Tien Ngoc Do. We are comfortably satisfied for the purpose of these proceedings that the respondent used both names. 5. On 23 March, 2015 the respondent issued a tax invoice for payment of his costs of acting on the sale in the sum of $1,100. That amount was paid in cash by the clients. 6. There is evidence that the clients asked the respondent to account to them for the sum of $4,350 which had been deducted from the sale proceeds without authority from them. No payment by way of refund was made by the respondent prior to the date that his practising certificate was suspended, nor subsequently. The clients assert that they have never received a receipt for the payments made for legal fees and on account of land tax, and there is no record in the respondent's files of any such payments having been made. 7. We are comfortably satisfied on the basis of the evidence that these allegations have been made out. Characterisation of the respondent's conduct. 1. The applicant sought a finding that the conduct which we have found proven should be characterised as professional misconduct for the purpose of the Act. Professional misconduct is defined in section 497 as follows; 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. The above definition makes reference to unsatisfactory professional conduct which is defined in section 498 as follows; 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, (b) charging of excessive legal costs in connection with the practice of law, (c) conduct in respect of which there is a conviction for: (i) a serious offence, or (ii) a tax offence, or (iii) an offence involving dishonesty, (d) conduct of an Australian legal practitioner as or in becoming an insolvent under administration, (e) conduct of an Australian legal practitioner in becoming disqualified from managing or being involved in the management of any corporation under the Corporations Act 2001 of the Commonwealth, (f) conduct consisting of a failure to comply with the requirements of a notice under this Act or the regulations (other than an information notice), (g) conduct of an Australian legal practitioner in failing to comply with an order of the Disciplinary Tribunal made under this Act or an order of a corresponding disciplinary body made under a corresponding law (including but not limited to a failure to pay wholly or partly a fine imposed under this Act or a corresponding law), (h) conduct of an Australian legal practitioner in failing to comply with a compensation order made under this Act or a corresponding law. (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. 1. We are able to deal briefly with this aspect of these proceedings, because, as is clear from the findings which we have made, the respondent has contumeliously and egregiously disregarded fundamental obligations and responsibilities which apply to all solicitors who are engaged in the practice of law. The practice of law is an honourable profession, and the community and fellow practitioners expect that those who are privileged to be granted the right to practice law maintain an appropriate and proper professional standard. Acting honourably includes as a fundamental requirement acting honestly and with due regard to the law. It is clear from the recitation of the factual circumstances which we have found proven against the respondent that he failed on many occasions to act honestly and he consistently breached the regulatory regime which applies to the practice of solicitors. 2. We cannot comprehend that any solicitor admitted to the practice of law would fail to understand that he or she is compelled to pay all moneys received from clients to be applied in connection with a transaction the subject of instructions into a trust account, with the well-known exception applying to professional costs which are properly due and payable. Yet the respondent failed to abide by these basic and fundamental principles governing his practice of law. Not only did he fail to ensure that monies received from or on account of clients were paid into a trust account, but he failed to utilise those monies for honest purposes in conformity with instructions which he had received from them. As is clear from the recitation of facts, the respondent dishonestly used some of these monies for his own purposes. Furthermore, the respondent has failed to keep and maintain trust account records, has failed to issue receipts, and has acted tardily on many occasions in pursuing his clients' interests. 3. This contemptible disregard for the interests of his clients, his proven dishonesty, and his blatant disregard of the regulatory environment in which he was compelled to operate render the respondent a person who is not a fit and proper person to be entitled to practice law. In all the circumstances, we regard his proven conduct as constituting an obvious and one of the worst examples of professional misconduct. Protective orders 1. Having found the respondent guilty of professional misconduct, we are empowered under the Act to order, inter-alia, that his name be removed from the local roll pursuant to the provisions of section 562 (2) (a). Protective orders are imposed for the protection of the public, to act as a deterrent to the practitioner involved and to other practitioners and to uphold the integrity of the profession in the eyes of the community. There is no other protective order properly available in the circumstances of these proceedings than the removal of the name of the respondent from the local roll. He is clearly not a fit and proper person to practice law, and in the absence of any evidentiary material or information of any kind volunteered by the respondent to endeavour to explain his conduct, we can only assume that he is likely to be unfit to practise law on an indefinite basis. We cannot comprehend, as we have said, that the respondent would not have known of his obligations and responsibilities under the Act. Accordingly, he has either contumeliously and deliberately disregarded his obligations and responsibilities or ignored them with reckless indifference. On either account his misconduct is so egregious that we must assume that he is likely to be unfit to practise law on an indefinite basis. We propose to order accordingly. Costs 1. This is a costs jurisdiction and the applicant sought an order for costs in its favour. There are no circumstances which would justify any contrary order and we propose to make a costs order accordingly. Orders 1. Consequent upon the finding of professional misconduct which we have made we make the following orders with immediate effect; 1. the name of the respondent Tien Ngoc Do (also known as Ngoc Tien Do) is removed from the local roll 2. the respondent is to pay the costs of the applicant in an amount assessed in default of agreement. ********** 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: 05 September 2018