Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Council of the Law Society of New South Wales v Konstantinidis [2019] NSWCATOD 104 Hearing dates: 20 February 2017; 26 May 2017; 29 and 30 August 2018; 11 and 12 December 2018 Date of orders: 03 July 2019 Decision date: 03 July 2019 Jurisdiction: Occupational Division Before: D Fairlie, Senior Member P Moran, Senior Member J Schwager, General Member Decision: 1. The Tribunal finds that the Respondent, Simon Konstantinidis, is guilty of professional misconduct in respect of Application Grounds 1 and 2; 2. The Tribunal finds that the Respondent, Simon Konstantinidis is guilty of unsatisfactory professional conduct in respect of Application Ground 3(a); 3. Application Ground 3(b) is dismissed; 4. The Registry is directed to list the matter for directions for the allocation of a Stage 2 Hearing. Catchwords: PROFESSIONS AND TRADES – legal practitioner - professional disciplinary proceedings - professional misconduct and unsatisfactory professional conduct - failure to account for balance of settlement monies following sale of property - breach of section 255 of the Legal Profession Act 2004 (NSW) - failure to comply with undertakings Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW) Legal Profession Act 2004 (NSW) (repealed) Revised Professional Conduct and Practice Rules 1995 (repealed) Cases Cited: Allison v General Council of Medical Education and Registration [1894] I KB 750 Batrouney v Forster [2016] VSCA 80 Briginshaw v Briginshaw [1938] 60 CLR 336 Council of the Law Society v Konstantinidis [2017] NSWCATOD 105 Konstantinidis v Council of the Law Society [2018] NSWCA 59 Law Society of New South Wales v Hinde [2005] NSWADT 199 Law Society of New South Wales v Davidson [2007] NSWADT 264 Law Society of New South Wales v Waterhouse [2002] NSWADT 204 Legal Services Board v Gillespie-Jones (2013) 249 CLR 493; [2013] HCA 35 Law Society of New South Wales v Jones (Court of Appeal (NSW), 27 July 1978, unrep) Robb & Anor v Law Society of the Australian Capital Territory [1996] 72 FCR 225 Russo v Dupree [1989] 217 ALR 54 Stewart v Strevens [1976] 2 NSWLR 321 Vincent Coffini [1994] NSWLST 25 Texts Cited: Nil Category: Principal judgment Parties: Council of the Law Society of New South Wales (Applicant) Simon Konstantinidis (Respondent) Representation: Counsel T Wong; S Jeliva (Applicant) T Lynch SC (Respondent) Solicitors Law Society of New South Wales (Applicant) TA Williams (Respondent) File Number(s): 2016/00378572 Publication restriction: Nil REASONS FOR DECISION Background/Application 1. By Application lodged with the Tribunal on 8 January 2016 the Council of the Law Society of New South Wales (the Law Society or Applicant) sought disciplinary findings and orders, alleging that the Respondent solicitor, Mr Simon Konstantinidis (the Solicitor), is guilty of professional misconduct in respect of two complaints; firstly, by brothers Apostolas and Ilias Stoikos of failure to account for the balance of settlement monies on the sale of premises in Morgan Street, Earlwood (the Premises) and breach of s 255 of the Legal Profession Act 2004 (the 2004 Act); secondly, by John Truong of failing to comply with undertakings. 2. The allegations raised in the Application, and the Solicitor's Reply, are recorded in [1] - [3] of The Council of the Law Society of New South Wales v Konstantinidis [2017] NSWCATOD 105 where the Tribunal determined preliminary jurisdictional issues. There are three grounds in the Application. These are that the Solicitor: 1 Failed to account for (the) balance of settlement money on the sale of premises; 2 Breached s 255 of the Legal Profession Act 2004; and 3(a) Did not present the complainant's memorandum of fees and disbursements to the relevant insurer upon successful completion of the matter; and 3(b) Did not liaise with the complainant in respect of any negotiations for costs and disbursements. 3. The Respondent's appeal of the determination on jurisdiction was dismissed on 27 March 2018 (Konstantinidis v The Council of the Law Society of New South Wales [2018] NSWCA 59). Following dismissal of the appeal, the proceedings were heard by the Tribunal on 29 and 30 August 2018 and 11 and 12 December 2018. We set out in these Reasons for Decision the issues between the parties requiring determination, the relevant evidence (oral and documentary) presented by the Applicant and the Solicitor in respect of the pleaded complaints, the submissions of each of the parties, and our findings and reasoning on material questions of fact and law. There will need to be a further hearing as to what disciplinary orders ought to be made. 4. The proceedings before the Tribunal: 1. were commenced on 8 January 2016; 2. involved conduct of the Solicitor occurring in mid-2012 in respect of the Apostolos and Ilias Stoikos complaint, and in May 2013 in respect of the John Truong complaint; 3. concerned an alleged failure to account - over a period of 4.5 years - for monies held on trust; 4. involved an analysis of facts dating back to early 2012; and 5. were first the subject of complaint by Mr Ilias Stoikos to the Office of the Legal Services Commissioner on 8 June 2012, to the Professional Standards Department of the Law Society of New South Wales by Ilias and Apostolos Stoikos on 11 July 2012, and by Mr Truong to the Legal Services Commissioner on 5 August 2014. 1. When one includes the first two days (20 February 2017 and 26 May 2017) where submissions on the preliminary/jurisdictional issue were heard, the proceedings have already occupied 6 days of hearing. The procedural history of the proceedings is, regrettably, inconsistent with the guiding principle of the Tribunal, prescribed in section 36(1) of the Civil and Administrative Tribunal Act 2013 (NSW), namely the facilitation of the just, quick and cheap resolution of real issues in proceedings before the Tribunal. We are concerned that the Tribunal's ability to resolve and determine these disciplinary proceedings justly, cheaply and quickly has not been assisted by the manner in which the proceedings have been approached and conducted by the parties. We note the duty to cooperate found in s 36(3). Nevertheless, having received lengthy closing submissions in relation to the numerous issues for determination identified by the parties (see below), we have considered it necessary to deal with each of these issues. This has resulted in these Reasons for Decision being longer and more detailed than would usually be the case. Issues for Determination A Jurisdiction 1. The Tribunal concluded in The Council of the Law Society of New South Wales v Konstandinitis [2017] NSWCATOD 105 at [12] – [15] that the law to be applied in these proceedings is the 2004 Act. The New South Wales Court of Appeal in Konstandinitis v Council of the Law Society of New South Wales [2018] (NSWCA59) (Payne and White JJA; Emmett AJA) at [1] agreed with this conclusion. Both the Law Society and the Solicitor in their submissions also agree that in hearing and determining these proceedings the 2004 Act applies. B Issues Requiring Determination 1. Both parties in their written submissions dated 15 February 2019 (Applicant) and 14 February 2019 (Solicitor) provided each party's Statement of Issues for the Tribunal's determination. Regrettably, only limited issues are agreed (illustrative of the concern we have expressed above concerning sub-sections (1) and (3) of s 36). Cumulatively the parties contend that there are 24 issues requiring our determination. The agreed issues are: 1. In respect of the Stoikos complaint (Grounds 1 and 2), for the purpose of s 255 of the 2004 Act, were Ilias (Ilias) and Apostolas (Toly) Stoikos as a matter of law ". . . . . the persons on whose behalf . . . . ." the sum of $33,000.00 held in the Solicitor's trust account on and from 4 July 2012 onwards ". . . . . was received . . . . ."? 2. In respect of the Truong complaint (Ground 3), having regard to the circumstances and terms in which they were given were the Truong undertakings (as set out in the letter from the Solicitor to Mr Truong dated 6 September 2011), to be performed by the Solicitor personally? 3. In respect of Undertaking 1 in the 6 September 2011 letter was there a mistake, common to the Solicitor and Mr Truong, at the time the undertaking was given as to its applicability to, and efficacy for, the matter in respect of which it was given? If there was such a mistake, did it constitute a lawful basis upon which the Solicitor was relieved of his obligation to comply with the undertaking? 4. In respect of Undertaking 2 in the 6 September 2011 letter was there, between the period 6 September 2011 and 1 December 2014, liaison with Mr Truong about any costs and disbursements? Would any such liaison constitute a lawful basis upon which the Solicitor was relieved of his obligation to comply with the undertaking? 1. The Law Society contends that the following additional issues require determination: (5) Did the Solicitor hold the funds deposited into his trust account on or about 30 May 2012 in respect of the sale of the Premises (Funds) exclusively for the benefit of Ilias and/or Toly pursuant to s 255(1)(a) of the 2004 Act? (6) In respect of the amount of $33,000.00 held in the trust account during the period from 4 July 2012 to 20 December 2016, being the balance of the funds: 1. did the Solicitor have an obligation to account to Ilias and/or Toly? 2. did the Solicitor have an obligation to comply with s 255 of the 2004 Act? In particular, on the assumption that the direction of Ilias and Toly to the Solicitor dated 6 July 2012 was effective as a direction for the purposes of s 255(1)(b) of the 2004 Act, was the failure of the Solicitor to disburse the remaining funds then held in the trust account a disbursement of that money for the purposes of that provision and thus a contravention of it? (7) Did the letter dated 6 July 2012 constitute a direction from Ilias and Toly to disburse the remaining funds to Toly (July Direction)? (8) If the answer to (7) above is yes, did any of the following matters constitute a lawful basis upon which the Solicitor could refuse to pay the monies to Toly in accordance with the July Direction? (a) An alleged direction given by Ilias to the Solicitor and/or an alleged agreement between Ilias and the Solicitor, in both cases given or entered into prior to 5 June 2012, to pay amounts received from the sale of the Premises to the Solicitor for any outstanding legal costs and debts owed by Ilias to the Solicitor. (b) The alleged inability of the Solicitor to determine which of Ilias or Toly was entitled to the monies held in the trust account. (c) The alleged entitlement to claim a lien in respect of unpaid legal costs in the amount of $8,009.78. (d) The alleged entitlement to withhold payment of the trust monies to Toly on the Grounds that claims could be made against the monies by: 1. The Trustee of the bankrupt estate of Nawaf Chaouk 2. Dennis Richard Lowe 3. Tom Powers 4. Amgad Ghabrial, Zhi Rui Zhou, Jia Xian Chen, Li Juan Ma, Dennis Mei and Xiao Hong Chao 5. Ian Charles Francis 6. The Estate of the late Nicolas Stoikos (9) If the answer to (8) (a), (b), (c) and (d) is no, has the Solicitor failed to account to Ilias and Toly in respect of the trust monies (Ground 1 of the Application)? (10) If the answer to (8) (a), (b), (c) and (d) is no, has the Solicitor breached s 255 of the 2004 Act (Ground 2 of the Application)? 1. The Solicitor contends that there are additional issues for determination being: (11) Did the Solicitor disburse $3,000.00 in satisfaction of purported advances made by him to Ilias for living expenses? (12) On the assumption that the direction of Ilias and Toly to the Solicitor dated 6 July 2012 was effective as a direction for the purposes of s 255(1)(b) of the 2004 Act, was the Solicitor's failure to disburse the $33,000.00 then held in the trust account a disbursement of that money for the purposes of that provision and thus contravention of it? (13) Has the Law Society proved as a matter of fact that as at 6 July 2012 and until 20 December 2016 Ilias and Toly were the persons absolutely entitled to the then balance of the trust account and thus entitled to terminate the trust upon which that sum was held? (14) In respect of the Truong complaint, did any of the following matters constitute a lawful basis upon which the Solicitor was relieved of his obligations to comply with the undertakings? 1. The explanation of the Solicitor that his then employee, Kevin Ramsay, a non-lawyer, had carriage of the Nguyen matter. 2. The explanation of the Solicitor that Mr Ramsay never told the Solicitor that the Solicitor was in breach of the undertakings. (15) If the answer to (14) (a) or (b) above is no, did the Solicitor fail to comply with Undertaking 1 (Ground 3 (a) of the Application)? (16) If the answer to 14 (a) or (b) above is no, did the Solicitor fail to comply with Undertaking 2 (Ground 3 (b) of the Application)? (17) In respect of Undertaking 1, was the Ramsay/Truong correspondence dated 13 December 2011, and Mr Truong's acquiescence in the observation therein made, a waiver of its performance? (18) Having regard to the findings made in respect of Grounds 1, 2, 3 (a) and 3 (b) of the Application, is the Solicitor guilty of professional misconduct in respect of any one or more of those grounds? (19) Further, or in the alternative, is the Solicitor nevertheless guilty of unsatisfactory professional conduct in respect of any one or more of those grounds? Evidence A The Evidence before the Tribunal 1. The documentary evidence comprised the affidavits of Anne-Marie Foord sworn 22 July 2015 (other than paragraph 34) and documents exhibited to that affidavit (other than the letter located behind tab 27 of that Exhibit) ("Foord Affidavit" and "Exhibit AMF-1" respectively), Ilias Theodore Stoikos sworn 18 January 2016 and documents at pages 18-30 and 31-33 exhibited to that affidavit ('Ilias Stoikos Affidavit" and "ITS-1"), John Truong sworn 5 October 2016 ("Truong Affidavit"), Kevin John Ramsay sworn 16 September 2016 ("Ramsay Affidavit"), and of the Respondent, Simon Konstantinidis sworn 6 September 2016 (other than paragraphs 6, 23, 24, 25, 26, 27, 28 and 29, the words "as to paragraph 24" in paragraph 30, the words, "as to paragraph 25" in paragraph 31, the words "as to paragraph 29", in paragraph 32, 45, 46, the words "as to paragraph 17" in paragraph 47, 49, 50, 55, the words "as to paragraph 38" in paragraph 56, 57, 58, 59, 60, 61, 62, 63, 64, 65, 66, 67, 68, 69, 70, 71, 72, 73, 74, 75, 76, 77, 78, 79 and 80) ("the Solicitor's Affidavit"). 2. Oral evidence was given by Mr Truong, Mr Ramsay and the Solicitor. Rulings were made during the course of the hearing consequent upon the non-appearance by Ilias Stoikos; the Solicitor's legal representatives having given notice that they required Ilias for cross examination. After hearing completed submissions, we rejected the Law Society's tender of an affidavit of Apostolos (Toly) Stoikos sworn 14 March 2016. On 30 August 2018, we ruled on the admissibility of certain parts of the Foord Affidavit. On 11 December 2018, we ruled on the admissibility of the Ilias Stoikos Affidavit as to certain pages of the exhibit to that Affidavit. B Relevance 1. Whilst the Tribunal has considered all of the admitted evidence, in these Reasons we concentrate on the evidence we consider relevant to the Issues Requiring Determination referred to earlier in paragraphs 7-9. C Trust Account Monies (Application Grounds 1 and 2 - the Stoikos complaints) 1. Much of the documentary evidence referrable to Application Grounds 1 and 2 is found in Exhibits AMF-1 and ITS-1. 2. On 21 February 2012, the Solicitor, by his firm Konstan Lawyers, forwarded a letter to Illias and Toly referrable to the sale of the Premises (Earlwood). The letter was addressed to Ilias and Toly at Earlwood and referred to a sale to Meng and He. The letter commenced with the Solicitor thanking Ilias and Toly for instructions to act on the sale. Schedule 1 of the letter set out the work that Ilias and Toly required the Solicitor to do. Throughout the letter "you" was used, however there is no specific differentiation between Ilias and Toly. The letter is addressed to both of them. 3. A Land and Property Information title search bearing the search date 12 January 2012 appears at page 31 of AMF-1. The First Schedule of the title search records Ilias and Toly as registered proprietors of Earlwood as joint tenants. The second schedule discloses a mortgage to Perpetual Trustees Victoria Limited and caveats lodged by Nawaf Chaouk, Denis Richard Lowe, Tom Powers, Ang Pngad Ghabrial, Zhi Ruizhou, Ji Xian Chen, Li Juan Ma, Denis Mei, Xiao Hong Chao, and Ian Charles Frances. 4. Schedule 1 of the Solicitor's 21 February 2012 letter outlined the work that the firm would perform including: 1. Acting in relation to the sale of the property, including one hour of negotiating the terms of the contract; 2. Acting in relation to the discharge where the mortgage is secured by Perpetual; 3. Acting in relation to the withdrawal of the caveat of Mr Chaouk; and 4. Acting in relation to the lapsing of 4 separate caveats noted on the title of the property. 1. Schedule 2 of the letter indicated the costs proposed to be charged being $1,750 for the acting on the sale, a further $350 for work in relation to discharge of mortgages secured by the property, a further $350 for work involving the Chaouk caveat, and $500 for work in relation to each of the 4 other caveats. For each item GST was to be added. In correspondence with solicitors acting for a caveator (Kemp Strang), dated April 2012, the Solicitor indicated that his instructions were that the selling agents had indicated to the registered proprietors that a sale price of the property would probably be in the vicinity of $850,000 to $900,000. 2. Paragraph 16 of the Solicitor's 21 February 2012 letter, under a heading "Your acceptance" says: "Upon your acceptance of this offer you will be regarded as having entered into a cost agreement so this means you will be bound by the terms and conditions set out in this document, including being billed in accordance with it. We ask you sign, date and return the enclosed copy of this document to us, however, we will regard your acceptance upon your continuing to retain us in this matter after you receiving this document." 1. A copy of the first page of a Contract for Sale is in evidence. It records the Morgan Street Earlwood premises as the property being sold, Konstan Lawyers, as the vendors' solicitor, and the vendors being both Ilias and Toly. McGrath Real Estate is recorded as the vendor's agent. The Contract is dated 4 April 2012 and records a sale price of $925,000. 2. Toly sent an email to the Solicitor dated 7 June 2012 (Exhibit A5, Tab 1, p16). It reads: "I understand that you have had some discussions about costs owing to you for work done with my family. I also note you are holding the proceeds of the sale of [ ] Morgan Street since 29 May 2012 on my behalf. I note that all of the proceeds of the sale are to be paid to myself. Please pay the proceeds to me as soon as possible - I authorise Ilias to collect a cheque from you. You are authorised to deduct the following amounts from the proceeds: 1. The amount of $5,500 as agreed for costs and disbursements of the sale. 2. The amount of $4,600 as agreed for the costs and disbursements of the dispute with the lender. 3. The amount of $3,500 for the balance due to you ($1,500 already paid by father). The costs and disbursements due for Nawaf Chaouk. Total of $13,600. I have been told that you are claiming an amount for costs in excess of the amount agreed for the Chaouk matter. In that case if you disagree with my proposed payment please release all funds and submit your bill for assessment. Please respond to me as soon as possible but no later than close of business 7 June 2012. Trusting we can resolve this matter amicably. Toly Stoikos/Director/Wholesale Banking/National Australia Bank Limited". 1. Pages 18 to 30 of ITS-1 (part of Exhibit A3) comprise a letter of the Solicitor of 28 June 2012 to the Earlwood address and to "Messrs IT and A Stoikos". It is headed "Stoikos sale to Meng and He" and opens with the confirmation of "your sale" having taken place on 29 May 2012. The letter: 1. enclosed what is described as the Solicitor's "settlement letter" dated 30 May 2012; 2. confirms "your instructions" that "… a number of accounts and other monies owed to this firm are to be paid from the proceeds of the sale of your property"; 3. notes that the addressees "… did not anticipate that [their] discharging mortgagee will charge and add to your discharge figure substantial amounts in respect of default interest, legal fees and other default expenses"; 4. notes that the addressees were to decide if they wished to pursue a complaint with the Financial Ombudsmen concerning Perpetual Trustees; 5. lists a reconciliation of the Solicitor's accounts and encloses copies of invoices totalling $76,562.00; 6. advises that on a without prejudice basis the Solicitor was prepared to reduce the fees to a total of $65,336.35; 7. confirms that the Solicitor had received a total of $107,075.09 and that after an adjustment of a $270.00 error referred to in an enclosed Trust Statement, says there was a "… balance due to you in the sum of $41,468.74"; and 8. encloses a cheque in that amount. 1. At the foot of page 19 of ITS-1 there is a photocopy of a 28 June 2012 cheque payable to Ilias from the Trust Account of Konstan & Associates with the National Australia Bank in the amount of $41,468.74. 2. The Solicitor's 28 June 2012 letter attached a 30 May 2012 letter which, again advised settlement of the sale of the property on 29 May 2012 and which, enclosed (i) a Schedule showing the amounts paid over on settlement, (ii); another Schedule showing the disbursement of the monies (iii), a copy of the front page of the Contract, and (iv) a tax invoice. The letter is addressed to "Messrs IT and A Stoikos" at the Morgan Street, Earlwood address. It records that the Solicitor was successful in the lapsing of 4 of the caveats and that after negotiations with the Trustee in Bankruptcy, that Trustees' caveat was also "successfully lapsed". The letter further indicated that the remaining caveat was withdrawn on settlement and that, after negotiations, the mortgage was discharged. 3. Also attached to the Solicitor's 28 June 2012 letter were a number of tax invoices of the Solicitor to Ilias involving matters unrelated to the sale of Earlwood, such invoices being dated 23 January 2016 (in the amount of $3,100.35), 31 August 2007 (in the amount of $4,136) and 28 May 2012 (in the amount of $3,214.90). Additionally, the letter attached a tax invoice of the Solicitor addressed to Toly dated 21 September 2010 in the amount of $18,297.97. 4. The letter also enclosed a tax invoice of the Solicitor addressed to both Ilias and Toly, dated 29 May 2012, referrable to acting in the sale of the Earlwood property and reporting total costs and disbursements of $7,476.32. Additionally, there is a further tax invoice also addressed to both Ilias and Toly, also dated 28 May 2012, this time referable to "dispute with Perpetual Trustees Victoria Limited" in the amount of $8,136.46. 5. The 28 June 2012 letter also attached a document headed "Trust Account", "Stoikos sale to Meng and He". It records sale proceeds of $107,075.09 being received, the words, "cheque to you" adjacent to a figure of $41,468.74, and other deductions being: 1. Adjustment to vendor due to error $270; 2. Costs and disbursements $5,500; and 3. Konstan Lawyers outstanding accounts $59,846.35. 1. The Solicitor by his Amended Reply to the Law Society's Application (Reply) admits that the net proceeds of sale of Earlwood of $107,075.09 were paid into the trust account of Konstan Lawyers of which the Solicitor was the sole principal. The document headed "Trust Statement" attached to the Solicitor's 28 June 2012 letter indicated that the entire proceeds of the sale of Earlwood were accounted for. It included an amount of $59,836.35 adjacent to the words "Konstan Lawyers Outstanding Accounts". An amount of $33,000 remained in the Solicitor's trust account between the date of settlement of the sale of Earlwood on 29 May 2012 and 20 December 2016 when it was paid by the Solicitor to the Office of State Revenue. 2. A number of amounts were withdrawn from the Konstan Lawyers Trust Account, debited against the settlement proceeds of the property; 1. $5,500 on 4 June 2012 to the Konstan Lawyers Office Account for legal fees connected with the sale of the property; 2. $4,600 on 4 June 2012 to the Office Account in respect of legal fees in acting on the dispute with Perpetual Trustees; 3. $270 on 27 June 2012 to the City of Canterbury Council for council rates; 4. $41,468.74 on 28 June 2012 to Ilias by cheque; 5. $7,236.35 to the Office Account in respect of legal fees in acting for Ilias on two unrelated court matters; 6. $15,000 on 3 July 2012 to the Office Account for legal services in acting for Ilias and Toly in respect of proceedings commenced by Mr Chaouk. 1. The payments set out above amount to $74,075.09. On 3 July 2012 the amount remaining in the trust account in respect of the proceeds of the sale of Earlwood was $33,000. The Law Society does not now make any complaint regarding any of the amounts comprising the $74,075.09. During the early stage of the investigation the Law Society complained about other transactions, although by the time it came to lodge its Application the complaint was limited to the $33,000 figure remaining in the trust account. By complaint form dated 15 June 2012, Ilias and Toly complained about the Solicitor's conduct to the Office of the Legal Services Commission (AMF-1 Tab 1 pages 3 to 7). Investigation of the complaint was referred to the Law Society by the Office of the Legal Services Commissioner by letter of 21 June 2012 (AMF-1 Tab 1 page 1). The covering email of Ilias to the Office of the Legal Services Commissioner included "Solicitor will not release funds from trust account and we fear that he may have utilised funds". Attached to the complaint form was a document dated 8 June addressed to the Commissioner. It relevantly asserted: 1. The "family home" had been sold; the settlement occurred on 29 May 2012, but that the main proceeds of the sale had been obtained by the Solicitor but had yet to be released; 2. There was a dispute in relation to bills; 2 of the 3 bills had been negotiated and a third was yet to be resolved; 3. Toly Stoikos held a first caveat and unregistered second mortgage on the home and therefore was the beneficiary to all remaining proceeds; 4. There had been discussions at the home of the Stoikos' parents on 5 June 2012. The Solicitor attended that meeting; 5. There was no resolution of discussions concerning the Solicitor's accounts; 1. The next relevant document is a letter of 6 July 2012 of Ilias and Toly to the Solicitor (ITS-1, Exhibit A3 pp 31-33). In it Ilias and Toly: 1. Refer to having received the Solicitor's 28 June 2012 letter; 2. Note that the Solicitor had ignored their previous instructions to release the funds held by him; 3. Contend that all funds were to be received on behalf of Toly "… as the first person entitled to the surplus funds after the first mortgagee"; 4. Say that the Solicitor was aware of that fact; 5. Advise that the Solicitor's conduct was referred to the Office of the Legal Services Commissioner on 15 June 2012; 6. In responding to the Solicitor's 28 June 2012 letter, deny that the Solicitor was ever instructed to pay any of the amounts claimed as owing to him as Items 1 to 7 of that letter; 7. Contend that at all relevant times there were no retainer agreements entered into with Ilias and Toly or relevant costs disclosure made by the Solicitor or his firm; 8. Deal with each of the items referred to in paragraphs numbered 1 to 7 of the Solicitor's 28 June 2012 letter; 9. Say "for the purposes of clarity" that all funds were due and payable to Toly and that "therefore most of your alleged outstanding accounts are not matters for [Toly]"; 10. Note that the Solicitor had "deliberately, incorrectly" paid a cheque in the amount of $41,468.74 to Ilias; 11. Indicate that "these funds" were accepted on the basis that Ilias would bank the funds as trustee for Toly and then upon clearance pay his money to him. Further, that the funds were a part payment only and demands that the Solicitor pays the balance of $52,006.35 within the next 7 days; 12. Contend that the Solicitor had no authority from either Ilias or Toly to disburse the funds to the Solicitor's firm or to himself. 1. The Law Society provided the Solicitor with a copy of the 15 June 2012 complaint, by letter of 19 September 2012. 2. The letter set out the issues arising in respect of the complaint and sought a written response to it by 4 October 2012. The Solicitor responded by letter of 20 November 2012 (AMF-1 Tab 3 - pages 20 to 66). The Solicitor in his Affidavit (Exhibit R2) deposes that the statements and assertions of fact in his 20 November 2012 letter to the Law Society (and in his letter of 6 December 2012 referred to below) were true and correct in respect of those statements and assertions of fact that were within his knowledge; further, any statements or assertions of fact in which he relies on any records or other information provided to him were true and correct to the best of his knowledge, information and belief. In respect of the Trust Account Monies/Stoikos Complaint Grounds the Solicitor in his 20 November 2012 letter: 1. denied that he had failed to account to Ilias and Toly for the balance of sale proceeds of Earlwood; 2. encloses a copy of his 28 June 2012 letter in which - he says - a full account was provided; 3. says that "Messrs Stoikos" [which the Tribunal takes to mean both Ilias and Toly] owed Konstan Lawyers substantial monies and fees for several matters; 4. says that it was agreed that these monies and fees would be repaid from proceeds of the sale of the property; 5. says that "they" [which the Tribunal takes as being a reference to both Ilias and Toly] instructed Konstan Lawyers to act on the sale; 6. says that Ilias Stoikos when giving instructions for the sale of Earlwood, indicated that he wanted to pay all his outstanding fees "… including monies paid on his behalf by the writer arising from the repossession by BMW Finance of his motor vehicle a BMW Mini"; 7. responds to complaints numbered 2 to 4 inclusive; 8. denies complaint number 5, namely the contention that he had breached s 255 of the 2004 Act. He says "the funds held in trust were fully accounted for and disbursed as directed by the client"; 9. responds to complaints numbered 6 and 7 concerning, inter alia, the charging for work for a PCA matter and the charging for work in respect of a license suspension matter. 10. contends that there was never any agreement for the sale proceeds (after the first mortgage was discharged) to be paid to Toly; 11. refers to the meeting at the home of the parents of Messrs Stoikos and being told at that meeting by Ilias that the proceeds of sale were "… not his but his parents". His letter then states, "I responded that the property was at all times in the name of Ilias and [Toly] Stoikos …". 1. The Law Society on 21 November 2012 sought further information consequent upon the content of the Solicitor's 20 November letter. The Solicitor responded by letter of 6 December 2012 (AMF-1 Tab 5 - pages 69 to 131). Relevantly: 1. The Solicitor attaches a copy of his 21 February 2012 costs disclosure letter - addressed to Messrs IT and A Stoikos; and 2. In responding to the Law Society's request for further information as to the Solicitor's earlier contention that the "funds held in trust were fully accounted for and disbursed as directed by the client", says "the authority was always verbal and clearly understood by all parties". He further says, "… Mr Stoikos instructed this firm to act on the sale knowing full well that these were owed to this firm and contrary to his current assertions the fees were to be paid from the sale of his property". 1. In his Affidavit (Exhibit R2), the Solicitor deposes that his instructions in relation to the sale of Earlwood came from Ilias; further, that Ilias had made a number of statements to him "over a period of some years" and that he - Ilias - was the beneficial owner of Earlwood. He did not, he says, receive any instructions personally from Toly in relation to the sale. Attempts were made to discuss the sale with Toly but no such instructions were provided. He says the only email he received from Toly was the email of 7 June 2012 referred to earlier - being the email directing that all the proceeds for sale were to be paid to Toly. He says that Toly took no part in the marketing or auction process in relation to the sale of the property, to his knowledge. Ilias had taken the Real Property Act transfer in respect of the Earlwood premises and returned it to the Solicitor purportedly signed by Toly and witnessed. 2. The Solicitor further deposes (paragraph 13 of Exhibit R2) that Toly took no part in the discussions concerning the distribution of the proceeds of sale; the Solicitors instructions coming from Ilias. The Solicitor concedes (paragraph 16 of Exhibit R2) that he did have a conversation where he contends Toly said to him, amongst other things "you will have to speak to Ilias about the proceeds …"; further, that during the same conversation the Solicitor informed Toly that he was a joint owner of the house. 3. The Solicitor concedes in his Affidavit (paragraph 22) that although Ilias "made all of the arrangements" he did provide a cost agreement to Toly. He further admits (paragraph 30) receipt of the 6 July email referred to earlier in these Reasons. He deposes that the authority referred to in the 6 July email was "meaningless" and "did not reflect any agreement or appropriate resolution". As to payment of the balance of the sale proceeds, and who had the benefit of such proceeds, the Solicitor deposes in paragraph 31 of Exhibit R2: "… it was my understanding and belief based upon my conversations with both Ilias and Toly that Toly had no beneficial entitlement and had made no financial contribution entitling him to any part of the proceeds of the sale either by virtue of the sale or the Deed of Settlement. My instructions from Ilias were to the effect that the only person beneficially entitled was Ilias and that to the extent that Toly had a legal entitlement, he could only have been as Trustee for Ilias. My instructions from Ilias in that regard were clear, and it was also clear to me at the time from my conversations with Toly that he acknowledged that position and that he had disavowed any interest or entitlement". 1. The Solicitor further deposes in his Affidavit: 1. That the sum of $33,000 remained [as at the time of swearing the Affidavit on 6 September 2016] in his Trust Account; 2. That he remained [at the time of swearing his Affidavit] uncertain as to the person to whom he should account for the sum of $33,000 held in Trust; 3. Had he been given any instructions or direction by the Law Society to account for the money, being an instruction or direction which would be binding on him at law, then he would have complied with that direction or instruction; 4. In the circumstances, he remains [at the time of swearing the Affidavit] uncertain as to who was the person to whom the money should be paid and accounted. If he paid it to Toly he believed that he would be exposed to a claim by Ilias on the basis that, having regard to the matters which are set out in his Affidavit, Ilias was the person entitled to receive any surplus, and the Solicitor had acted to that point [6 September 2016] in that belief. 5. The matter was rendered further uncertain having regard to the analysis and consideration of the matters triggered by an investigation by the complainants which have been made against him; 6. It may well be that the entitlement to the net proceeds of sale after payment of the first mortgagee rest with the Trustee of the bankrupt estate with Nawaf Chaouk, and if that claim is not pressed, it may rest with the caveators whose entitlements were subsequent in priority to the Chaouk caveat; 7. He maintains his entitlement to the funds which had been paid in respect of his costs and disbursements. 1. When giving evidence, the Solicitor in cross examination maintained that, at the time of the hearing, he still considered the $33,000 in the trust account to be his money (Transcript Day 3 page 99.18). 2. When cross examined as to his view following receipt of the Stoikos brothers 6 July 2012 direction, the Solicitor said "I think I have already indicated what my view of the matter was at that time. I think I indicated to you, and I have said it before, that in my view I was entitled to claim that money, and it was because I had an agreement and also a Direction …". D Breach of Undertaking (Application Ground 3 - the Truong Complaint) 1. By letter dated 29 August 2011, Konstan Lawyers wrote to Alliance Compensation and Litigation Lawyers. The letter advised that the firm had received instructions from Mr Quan Ngyuen to assume conduct of his workers compensation matter. A written authority was enclosed. 2. The complainant in respect of Ground 3, Mr John Truong (Mr Truong) was the managing partner of Alliance Compensation and Litigation Lawyers ("Alliance"). He responded to the 2 September 2011 letter of Konstan Lawyers - addressing the letter to "Mr S Konstantinidis Konstan Lawyers" - and asked "… would you please provide the following undertakings prior to us releasing the file to your office". The undertakings sought were: "(1) Present our memorandum of fees to the relevant insurer upon successful completion of this matter; and (2) Liaise with us in respect of any negotiations for costs and disbursements and return the file to us if any agreement cannot be reached; and (3) Provide us an update of the status of the matter on request; and (4) Obtain such agreement from any solicitors to whom the file may be forwarded." We will refer to these undertakings hereafter as Undertakings Nos.1, 2, 3 and 4. 1. The letter of Konstan Lawyers of 29 August 2011 and the letter of Alliance seeking undertakings of 2 September 2011 are at pages 218 and 222 respectively behind Tab 3 of Exhibit AMF-1. 2. The undertakings were given by letter of Konstan Lawyers to Mr Truong at Alliance on 6 September 2011, (Exhibit A5 - Tab 39 - page 248). The letter refers to Mr Truong's 2 September 2011 letter, and in the second paragraph says: "In any event we are happy to provide the undertakings outlined in your letter of 2 September 2011, specifically: 1. We will present your tax invoice dated 2 September 2011 to the relevant insurer at the successful completion of the matter; 2. We will liaise with you in respect of any costs and disbursements and will return your file to you if any agreement cannot be reached; 3. We will provide you with updates as to the status of the matter on request; 4. We will obtain the same undertakings from any legal representative who may assume conduct of this matter in the future; We look forward to receiving your file as soon as possible". 1. The letter concludes: "Yours faithfully Konstan Lawyers Simon Konstantinidis Contact: Kevin Ramsay" 1. The Solicitor admits in his Reply that on 6 September 2011 Konstan Lawyers sent a letter to Mr Truong providing the undertakings. The term "undertakings" is defined in the Law Society's Application as meaning the undertakings "… provided by the Solicitor to Mr Truong by letter dated by 6 September 2011…". 2. The Solicitor further admits in his Reply that he has been the sole principal of Konstan Lawyers since 7 April 2006. He further admits that he "signed the undertaking at the request of an employee …". 3. In cross examination the Solicitor was asked about responsibility for compliance with the undertakings. The following question and answer were given: Ms Wong: "… who had primary responsibility for compliance with the undertakings? Mr Konstantinidis: "Mr Ramsay and myself as the supervising solicitor". 1. Earlier in the cross examination, the following exchange occurred: Ms Wong: "To the extent that Mr Ramsay was providing services on behalf of Konstan Lawyers in relation to the Nguyen file, you were the supervising lawyer in relation to that matter, is that correct?" Mr Konstantinidis: "Yes". Ms Wong: "There were no other lawyers, qualified lawyers, who were responsible for supervising the Nguyen matter?" Mr Konstantinidis: "No". 1. Further questions and answered included: Ms Wong: "These full undertakings were solicitors undertakings?" Mr Konstantinidis: "Yes on behalf of the firm". Ms Wong: "Who had primary responsibility for compliance with the undertakings?" Mr Konstantinidis: "Mr Ramsay and myself as the supervising solicitor". 1. The reference to Mr Ramsay arises from the fact that he was at material times a managing clerk in the employ of Konstan Lawyers. The Solicitor deposes in Exhibit R2 (paragraph 93) that Mr Ramsay had "carriage of" the Nguyen matter. He says he has no specific recollection of his discussion with Mr Ramsay at the time of him signing the undertaking but that (per paragraph 95) he did read the undertakings. 2. By complaint dated 5 August 2014, Mr Truong asserted that the undertakings given had been breached in that there was no presentation of Mr Truong's memorandum of fees to the insurer upon successful completion of the Nguyen matter, nor liaison in respect of the negotiations for costs and disbursements (Exhibit AMF-1 - Tab 34 - pages 212 to 232). 3. On 6 August 2014, the Office of the Legal Services Commissioner referred the complaint to the Law Society for investigation. The Law Society informed the Solicitor of the Truong complaint and enclosed a copy of it. It asked for his specific response by 12 September 2014. In Exhibit R2 (paragraph 92) the Solicitor relies on the statements and facts set out in his letters to the Law Society of 4 November 2014 (appearing at AMF-1 Tab 39 - pages 238 to 263), 19 November 2014 (pages 265 and 266 of the same Exhibit), and of his solicitor T A Williams to the Law Society of 9 March 2015 (pages 276 to 278) of the same Exhibit. 4. Relevantly, the Solicitor says in his 4 November 2014 letter to the Law Society: 1. Konstan Lawyers was first instructed by Mr Nguyen on 26 August 2011; 2. By letter dated 2 September 2011, Mr Truong (who was then representing Mr Nguyen) requested undertakings prior to releasing the file; 3. By letter dated 6 September 2011, those undertakings were given to Mr Truong; 4. By letter dated 10 September 2011, Konstan Lawyers received the file from Mr Truong, together with that firm's memorandum of costs and disbursements; 5. By letter dated 13 September 2011, Konstan Lawyers advised Mr Truong that his professional costs seemed excessive. 6. An outline assessment of costs and disbursements of Konstan Lawyers was sent to the Workers' Compensation insurer. 7. The costs and disbursements claimed in Mr Truong's 10 October 2011 tax invoice were not claimable in the Worker's Compensation proceedings; 8. By letter dated 22 May 2011, Mr Truong wrote to Konstan Lawyers outlining the history of the matter and requesting details of the settlement and costs and disbursements received; 9. On 20 January 2014, Konstan Lawyers wrote to Mr Truong advising of the status of the matter, enclosed a general account cheque for translator's fees in the amount of $139 and suggested his firm's claimed costs and disbursements were excessive for the work performed. An offer was made to settle Mr Truong's costs in the sum of $1,500 plus GST. 1. The Law Society sought further information from the Solicitor by letter of 6 November 2014. In his reply the Solicitor said: 1. The undertaking given to Mr Truong was given in good faith, albeit in error; 2. Any costs and disbursements claim by Mr Truong presented by Konstan Lawyers to the Workers' Compensation insurer would have been rejected. In those circumstances the undertaking provided to Mr Truong would have no effect on the insurer's liability to pay his costs; 3. "… in other words Mr Truong should not, with respect, have asked for an undertaking and this firm should not have given an undertaking". 4. "It is our view that any undertaking given in good faith is always subservient to the law and Mr Truong's position is no worse or better regardless of whether or not his account was presented to the insurer. In the circumstances there was no basis to accede to the undertaking for in actuality it was a fallacy". 1. T A Williams, acting for the Solicitor, in his letter to the Law Society of 9 March 2015 said: "The undertaking was submitted by Mr Kevin Ramsay to Mr Konstantinidis for signing. Mr Konstantinidis signed the undertaking at the request of Mr Ramsay, an experienced employee but did not turn his mind to the significance of the paragraph which required the presentation of '… our memorandum of fees to the relevant insurer upon successful completion of the matter …' ". 1. The Solicitor deposes in his Affidavit (Exhibit R2 paragraph 97) that he was never advised by Mr Ramsay that Konstan Lawyers had not complied with the undertaking to present Mr Truong's 2 September 2011 invoice to the insurer for payment, and then liaise with Mr Truong in respect of any costs and disbursements. He only became aware of the non-compliance by Mr Ramsay of what he says in his Affidavit was "the firm's undertaking" to Mr Truong after he received the complaint from the Law Society. He further deposes to an offer being made to, and being accepted by, Mr Truong as to an appropriate amount for costs and Mr Truong - thereafter - notifying the Law Society that he wished to withdraw his complaint. The Solicitor says that, in the circumstances, he believes that "the true intended nature of the undertaking was as understood by [him] and that so construed [his] firm complied with the undertaking". 2. After the 6 September 2011 undertakings had been given, the Law Practice wrote to Mr Truong on 13 December 2011 asserting Mr Truong's costs seemed excessive (Exhibit A5 - Tab 39 - page 253) but, including: "We would be more than happy to discuss the extent of your entitlement to professional costs once the matter is finally resolved. We will keep you informed as to the status of the matter". 1. In his oral evidence Mr Truong said that between 13 December 2011 and 22 May 2013 he did not receive any notification from Konstan Lawyers that the Nguyen matter had settled. 2. On 22 May 2013, Mr Truong wrote to Konstan Lawyers (Exhibit A5 - Tab 39 - page 258) about the completion of the Nguyen matter. The letter says: "We note that we had contacted your office and were advised that the matter settled with costs paid to your office early this year. However, you failed to notify our office and in breach of your undertakings in relation to costs under your cover letter dated 13 December 2011." 1. Mr Truong's further evidence is that between 22 May 2013 and 4 August 2014, he sought to communicate with Konstan Lawyers. He estimates that he made a minimum of 5 to 6 telephone calls and sent more than 2 emails. Mr Ramsay, when giving evidence, did not deny that Mr Truong may have attempted to call him and may have emailed him. He also said that at no time after receiving the 22 May 2013 letter did he provide Mr Truong with the details of settlement and costs and disbursements received in the matter. The Solicitor admits in his Reply that he did not present Mr Truong's tax invoice to the relevant Workers' Compensation Insurer on the completion of the Nguyen matter. 2. Mr Truong, when giving oral evidence, considered that all 4 of the undertakings had been breached and that he made his complaint because Mr Ramsay had not responded to his correspondence. 3. Mr Ramsay, in giving his oral evidence, said that he did not have a practicing certificate and that he conducted the Nguyen Workers' Compensation matter under the supervision of the Solicitor. He also conceded that he drafted the undertakings, provided them to the Solicitor to sign, and that the Solicitor did in fact sign the undertakings. 4. Mr Ramsay further conceded that he did not present Mr Truong's tax invoice to the Workers' Compensation insurer, nor did he make a request of Mr Truong to be released from the undertakings. He further conceded that he did not respond to Mr Truong's enquiries within a reasonable period of time and that the Solicitor did not make any enquiry of him as to compliance with the undertakings given. Submissions re: - Trust Account monies (Application Grounds 1 and 2 - the Stoikos Complaints) The Solicitor's submissions 1. The Solicitor refers to Application Grounds 1 and 2 being expressed cumulatively rather than as alternatives; both Grounds relating to the same conduct. He submits that the pleading of those Grounds in such a manner was a deliberate decision by the Law Society; pointing to the contention in the Society's written submissions that upon it demonstrating a failure to make a payment as directed under s 255, a breach of the fiduciary obligation to account will also occur. The Solicitor contends that to the extent of any inconsistency between the statutory schemes regulating the conduct of the Solicitor's trust account and the operation of the general equitable rules about the operation of trusts, the statutory scheme prevails. The Solicitor submits that the statutory ground of breaching s 255 of the 2004 Act excludes the operation of a concurrent substantive equitable failure to account, to the extent that failure to account is required for demonstrating a breach of s 255. 2. The Solicitor submits that the Law Society's case is founded upon the 6 July letter from the Stoikos brothers in which there was an assertion that ". . . . .all funds [being the proceeds of settlement] are due and payable to [Toly] Stoikos . . . . .", and a ". . . . . demand that you [the Solicitor] pay $52,006.35 within the next seven (7) days . . . . .". 3. The Solicitor was overseas from 2 July 2012 for several weeks. When he gave evidence he was uncertain as to when, upon his return, he read the 6 July correspondence. He did not ever respond directly to the 6 July letter because - he submits - the matter became the subject of investigation by the Law Society. 4. The Solicitor points to the specific contention in paragraph 56 of the Application of failing to disburse the amount of $33,000.00 held in the trust account ". . . . .as authorised or directed by Toly and/or Ilias in breach of s 255 of the Legal Profession Act 2004". He contends that in respect of trust money that has been deposited into a general trust account a breach of s 255 will occur when, but only when, trust money is "disbursed" from a practitioners general trust account otherwise than in accordance with a direction. The Solicitor says that there has been no "disbursement" of the $33,000.00 on or after 3 July. He says that a ". . . . .failure to disburse . . . ." is incapable of being its opposite, namely a disbursement. 5. The Solicitor submits that neither of the two cases relied upon by the Law Society as authority for a contrary construction of s 255, namely Stewart v Strevens [1976] 2 NSWLR 321 or Law Society of New South Wales v Davidson [2007] NSWADT 264, involved a non disbursement. He contends that in Stewart the issue was whether the Solicitor who had disbursed money from his trust account to his general account to satisfy a personal debt to him from his client had implied authority for that disbursement. In Davidson, the Solicitor contends that the Application Grounds there involved either a non deposit of trust money into a general trust account or a disbursement of trust money from a trust account without a direction to do so. 6. The Solicitor maintains that up until 20 December 2016 there had been no transaction involving the $33,000.00 held in the Solicitor's Trust Account; hence there was no breach of s 255. 7. The money in the Trust Account was on 20 December 2016 dealt with as unclaimed money. The Solicitor submits that the 20 December 2016 dealing is not the subject of the Application; it was a payment to the Office of State Revenue pursuant to, and at the suggestion of, the Law Society. The December 2016 transaction is - he says - therefore, incapable of being a disbursement from a trust account without authority. The Solicitor contends that what was required of him in the period between when he came to hold the $33,000.00 and when he dealt with it in December 2016 was that he not pay that sum to himself; and that he did not do. 8. In his written submissions the Solicitor refers to his concession in his Reply that: "Despite the demands of Ilias and Toly in their letter dated 6 July 2012 the Solicitor did not refund or repay the amount of $52,006.35". The Reply denied the further contention of failure to account for the balance of the proceeds of the sale of Earlwood. 1. The Solicitor submits that underlying the allegations in Particulars 36 and 51 of the Law Society's Application is the contention that the effect of Part 3.2 of Division 4 of the 2004 Act was that a law practice is required to hold a client's money exclusively for the law practice's client on whose behalf the money was received and disburse the money in accordance with the direction given by the client. He contends that the consequence of that construction is that the balance of the proceeds of sale of Earlwood, upon being deposited in the Solicitor's trust account, were monies to which Ilias and Toly were exclusively entitled. He submits that the answer to the question of on whose behalf were the proceeds of the sale of Earlwood received is "the person or persons in truth entitled to those proceeds". The Solicitor refers to the Law Society's approach that the proceeds must be dealt with in accordance with a direction from the Stoikos brothers, even if they afterwards unequivocally advised the Solicitor that the trust money received by him from them was, at the time of its receipt, the money of others. The Solicitor submits that it would be unlikely that a law practice would be required to disburse trust money to the disadvantage of the person who at the time of its receipt was in truth apparently entitled to it. 2. The Solicitor submits that s 255(1)(a) does not, in terms or by necessary implication, identify the client as the person on whose behalf the money is always received. He cites Stewart v Strevens at 324, when dealing with s 41 of the Legal Profession Act 1898, the language of which was – the Solicitor contends – relevantly indistinguishable from that in s 255 of the 2004 Act where it was held: ". . . . . the Section . . . . . envisages that money may be received by a Solicitor from his client other than "for and on behalf of" that client." 1. The Solicitor disputes the Law Society's contention that the minority judgement of Bell, Gageler and Keane JJ in Legal Services Board v Gillespie- Jones [2013] HCA 35 supports the Law Society's proposition. 2. The Solicitor then contends that the Law Society has not established that the Stoikos brothers were entitled to the trust monies. 3. The Solicitor submits that the allegation in Application Ground 1 of failure to account requires the Law Society to prove that Ilias and Toly were together: 1. all of the beneficiaries of the trust of the $33,000.00, and 2. they were together possessed of an absolute, vested and indefeasible interest in that sum. He contends that the Society has not proved those issues. He relies on Ilias, when giving instructions for the sale of the Earlwood property, saying that he – Ilias – wanted to pay all his outstanding legal fees including monies paid on his behalf by the Solicitor arising from repossession by BMW Finance of a motor vehicle; further, Ilias after settlement purporting to query his previous authorisation to deduct fees and monies owing to the Solicitor. The Solicitor further contends that Toly clothed Ilias with actual or alternatively apparent authority to make arrangements in respect of the settlement funds by leaving it to Ilias to retain and instruct the Solicitor, and in declining to engage with the Solicitor about the transaction. The Solicitor says that he gave consideration to the promises made to him by Ilias (about Ilias wanting to pay outstanding fees and other monies paid on his behalf) when agreeing to undertake the retainer and in the performance of the retainer. He says those promises were made by Ilias with the actual or ostensible authority of Toly, and as such bound each. They were – the Solicitor contends – directions for the purposes of s 255 of the 2004 Act as to the net proceeds of sale. The Solicitor contends that, being promises given for consideration, they were irrevocable directions not capable of being unilaterally withdrawn. 1. The Solicitor further submits that Ilias and Toly were not entitled to the $33,000.00, let alone absolutely. He refers to his 20 November 2012 letter to the Law Society (AMF1 tab 3 page 25) where he says that at a meeting at the home of the parents of Ilias and Toly after settlement of the sale he was informed by Ilias that the proceeds of sale were not his but his parents. The parents repeated the contention. The Solicitor submits that the conversation at the home of the parents was notice to him of a claim by the parents on the proceeds to the exclusion of Ilias and Toly; a claim that – the Solicitor contends – was admitted by Ilias, and on the basis of the actual or ostensible authority referred to above, also by Toly. The Solicitor pleads that this admission by Ilias, and ostensibly by Toly, of the proceeds of sale being the parents' was inconsistent with the contention implicit in the 6 July 2012 letter that no one but Ilias or Toly had any interest in the proceeds. Accordingly, the Solicitor submits that he came to believe that persons other than himself and Ilias and/or Toly might have a claim to the balance of the trust money held by him. 2. Accordingly, the Solicitor contends that the Law Society has not proved that the Stoikos brothers together were all of the persons entitled to the $33,000.00. As such, he contends that the allegation of failure to account as a trustee should be dismissed. The Law Society's Submissions 1. The Law Society submits that the Solicitor held the funds deposited into his Trust Account on, or about, 30 May 2012 in respect of the sale of Earlwood exclusively for the benefit of Ilias and/or Toly pursuant to s 255(1)(a) of the 2004 Act. There are two possible findings; either that the funds were received on behalf of, and held exclusively for the benefit of, both Ilias and Toly; alternatively, that the funds were received on behalf of, and held exclusively for the benefit of only Ilias, but not Toly. As to the first alternative the Law Society points to the law practice entering into its Costs Agreement for the sale of Earlwood with both Ilias and Toly, and to both Ilias and Toly being registered proprietors. The proceeds of sale deposited into the Trust Account of Konstan Lawyers were recorded as being received in a ledger in the names of both Ilias and Toly. The Solicitor answered in the affirmative the question put to him by Ms Wong "The proceeds of sale of the Earlwood property were deposited into your firm's trust account in both of their [meaning Ilias and Toly] names". Both were named as Vendors on the Contract for Sale (Exhibit A5, tab 3, page 30). 2. The Law Society submits that, on this documentary evidence, the Tribunal ought to conclude that both Ilias and Toly were the clients of the Solicitor and that when money was received form the proceeds of sale of Earlwood that money was received on their behalf as the Vendors of the property. It says that if the Tribunal is satisfied that the law practice received the proceeds of sale on behalf of both Ilias and Toly then it would hold, in accordance with s 255(1)(a) of the 2004 Act, that the proceeds of sale were held on trust exclusively for Ilias and Toly. 3. In respect of the second alternative finding, the Law Society refers to the evidence of the Solicitor in cross examination denying that Toly was a client of the firm in respect of the sale, that Toly did not have any involvement in the matter and that the Solicitor received all instructions from Ilias. It also points to the Solicitor's evidence that he believed Ilias had the beneficial interest in the property and Toly was simply on the title. It also points to the Solicitor's acknowledgement in evidence that even if the law practice did not hold the proceeds of sale on trust for Toly, it certainly held the proceeds of sale on trust for Ilias. The Law Society points to the Solicitor's evidence in cross examination (Transcript day 2, page 64, point 17) that notwithstanding that the trust account lists with both Ilias and Toly's names at the top of the ledger, the monies were received on behalf of "one of those persons" and that the person on whose behalf the monies were received into trust was solely Ilias (Transcript day 2, page 65, line 27). 4. While the Solicitor may have formed the view that only Ilias was beneficially entitled to the proceeds of sale, he was acting on the transaction of the registered proprietors of the property, being the parties named on the Contract for Sale. He therefore received those monies on behalf of those with legal title to the property, in the absence of any written document in which Toly acknowledged that he had relinquished any claim to be beneficially entitled to those proceeds. 5. The Law Society therefore submits that the proceeds of sale were deposited into the general trust account of the law practice, and that the Tribunal can confidently find that the proceeds of sale were received on behalf of Ilias, or in the alternative, Ilias and Toly. Therefore, the Law Society submits, the proceeds of sale were deposited into the law practice's trust account and, pursuant to s 255 of the 2004 Act held exclusively for Ilias, or alternatively Ilias and Toly. 6. The Law Society further points to the Solicitor's concession under cross examination of receiving nothing in writing from either Ilias or Toly that Toly was not entitled to any of the sale proceeds. 7. The Law Society contends that in respect of the amount of $33,000.00 held in the Solicitor's trust account during the period 4 July 2012 to 20 December 2016 he had: 1. An obligation to account to Ilias and/or Toly, 2. An obligation to comply with s 255 of the 2004 Act, and 3. In particular, on the assumption that the 6 July 2012 direction was effective as a direction for the purposes of s 255(1)(b) of the 2004 Act, the failure of the Solicitor to disburse the $33,000.00 pursuant to the 6 July direction was a disbursement of that money for the purposes of that provision, and thus a contravention of it. 1. As to the obligation to account, the Law Society points to Part 3.1 of the 2004 Act dealing with trust money and trust accounts. Section 243 defines "trust money" as "money entrusted to a law practice in the course of or in connection with the provision of legal services by the practice", and relevantly included "money received by the practice on account of legal costs in advance of providing services". A "trust account" was "an account maintained by a law practice with an approved ADI to hold trust money". The Law Society points to the statutory duties of a law practice to account for trust money in s 255. That section provides: 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 personMaximum penalty: 50 penalty units (2)Subsection (1) applies subject to an order of court of competent jurisdiction or as authorised by law. (3) The law practice must account for the trust money as required by the Regulations.Maximum penalty: 50 penalty units" 1. The Law Society then submits that the circumstances by which withdrawals could occur were set out in s 261 of the 2004 Act as follows: " 261 Dealing with trust money: legal costs and unclaimed money (1) A law practice may do any of the following, in relation to trust money held in a general trust account or controlled money account of the practice for a person: (a) exercise a lien, including a general retaining lien, for the amount of legal costs reasonably due and owing by the person to the practice, (b) withdraw money for payment to the practice's account for legal costs owing to the practice if the relevant procedures or requirements prescribed by this Act and the Regulations are complied with, (c) after deducting any legal costs properly owing to the practice, deal with the balance as unclaimed money under section 266 (Unclaimed money). (2) Sub-section (1) applies despite any other provision of this Part but has effect subject to Part 3.2 (Cost Disclosure and Assessment)...." 1. The Law Society refers to the definition of legal costs in s 4 of the 2004 Act as meaning: ". . . . . amounts that a person has been or may be charged by, or is or may become liable to pay to, a law practice for the provision of legal services including disbursements but not including interest". 1. The Law Society submits that the effect of Part 3.1, Division 2 was that the law practice was required to hold the client's money exclusively for the law practice's client on whose behalf the monies were received and, to disburse the money only in accordance with a direction given by the client. The Society submits that a law practice would contravene s 255 if it refused to pay monies in accordance with directions given by the client, where they had no statutory authority to withhold such payment. It cites Stewart v Strevens [1976] at 326, and Law Society of New South Wales v Davidson. The Law Society further cites Legal Services Board v Gillespie- Jones (2013) 249 CLR 493 per Bell Gageler and Keane JJ that the effect of a requirement that a law practice hold trust money "exclusively for the person on whose behalf it is received" was to cause the practice to be a "trustee in the ordinary sense" of the client's money. The High Court – the Law Society submits – rejected the proposition that the statutory regime in issue in that case, the Legal Profession Act 2004 (Vic), was consistent with a law practice holding trust monies on trust for any person other than the client. Their Honours concluded that the statutory obligations were consistent only with the law practice holding the money on trust exclusively for the benefit of the client and subject to the instructions of the client; rejecting the proposition that a person other than the client would be entitled to claim a beneficial entitlement to funds entrusted by the client to the law practice; and further, that the relevant statutory provisions considered by the High Court in Gillespie Jones were not materially different to the provisions of the 2004 Act under consideration in these proceedings. The principles set out by their Honours in Gillespie Jones are therefore properly applied to the interpretation of s 255 of the 2004 Act. 2. The Law Society further submits that the fiduciary "duty to account" encompasses several different duties, including the duty to pay amounts that the trustee is obliged to pay to the beneficiaries of the trust. It says that on the Law Society demonstrating a failure to make payment as directed under s 255, a breach of a fiduciary obligation of a legal practitioner to account to beneficiaries for trust monies held on their behalf will also occur. 3. The Law Society refers to the Solicitor's submission that there can only be a contravention of s 255(1)(b) if there has been a disbursement of trust monies, that is, where a Solicitor makes disbursement but does not do so in accordance with a direction from the person on whose behalf the money was received. It points out that the effect of the position for which the Solicitor contends would be that a Solicitor could fully comply with the requirements of s 255(1)(b) by leaving the monies in their trust account and making no disbursement whatsoever, even though the client had properly and lawfully requested that payments be made from those funds (assuming that the Solicitor had no entitlement to a lien or payment of legal costs under s 261). This, the Law Society submits, would be antithetical to the purpose of the 2004 Act as evidenced by Division 2 of Part 3.1 which is to require the law practice to deal with trust monies in accordance with directions given by a client and in accordance with the law practice's duties as a trustee. It submits that the proper construction of the sub-section that is in accordance with its ordinary and grammatical meaning, and gives effect to its purpose, is that the "law practice must . . . . . disburse the trust monies" in circumstances where a direction has been given by a person, and that such disbursement must be "only in accordance with" the direction that was given. 4. Whether the Solicitor held the proceeds of sale on trust solely for Ilias or on behalf of both Ilias and Toly is – the Law Society submits – irrelevant. It contends that the direction was given by both of them at the same time in identical terms and that the Solicitor's failure to comply with the direction – being the 6 July direction – was therefore capable of constituting a failure to comply with that direction. 5. The Law Society then submits that the 6 July 2012 letter constituted a direction from Ilias and Toly to disburse the remaining $33,000.00 in trust funds to Toly. It contends that the direction was plain in its terms and was from both of the Stoikos brothers and co-signed by them. 6. The Society refers to evidence of the Solicitor that he understood from the terms of the 6 July letter that it was a direction that he should pay the balance of the proceeds of sale to Toly (Day 3, Transcript 102.14-19). Further, that he accepted that Ilias and Toly, as between each other, could reach an agreement as to how they wanted the money disbursed. He accepted the characterisation of the direction as a combined position as to where Ilias and Toly wanted the surplus funds paid. 7. The next issue was whether the 6 July direction was operative in light of the explanations offered by the Solicitor as to his failure to comply with it. The Law Society contends that none of the matters raised by the Solicitor relieved him of his obligation to account for, and disburse, the $33,000.00 in accordance with the 6 July direction. He was not entitled to refuse to pay the money to Toly. The Law Society points out that the Solicitor has given different explanations for his conduct, one of which being that all times the $33,000.00 belonged to him by reason of an agreement that he struck with Ilias prior to the settlement of the sale of the property. The other being that he was uncertain as to who was entitled to the money. 8. The first factor raised by the Solicitor concerns the alleged direction given to him by Ilias prior to 5 June 2012 to pay the amounts received from the sale of Earlwood to the Solicitor for outstanding legal costs and other debts owed by Ilias to the Solicitor. The Society submits that even if there was a direction or agreement between Ilias and the Solicitor prior to 5 June 2012 it did not constitute an operative direction that prevailed over the 6 July direction. Firstly, the Solicitor has failed to prove that a legally binding agreement was entered into between himself and Ilias that contained as one of its terms a direction with which the Solicitor was required to comply under s 255(1)(b) of the 2004 Act. There are no documents evidencing the terms of the alleged agreement; the Solicitor's evidence being that all discussions concerning an earlier direction were oral, and with Ilias only. 9. It was open to the Solicitor – the Law Society contends – to seek a joint written direction from Ilias and/or Toly effecting Ilias's alleged oral agreement or direction, however that did not occur. Secondly, the Law Society submits that there is uncertainty as to the alleged terms of the earlier direction. It points to the fact that at the time of the alleged earlier direction the net proceeds of sale of the property were not known. If the earlier direction existed it would appear to have been contingent on the proceeds of sale of Earlwood being greater than what they in fact were. 10. Thirdly, the Law Society submits that if the Tribunal finds that an earlier direction did exist it was either reneged upon or superseded by the 6 July direction such that it was no longer in force. We have earlier in these Reasons referred to evidence given by the Solicitor concerning the Solicitor meeting with Ilias and Ilias and Toly's parents on 5 June. The Solicitor conceded in cross examination that at that meeting "whatever was directed, authorised or otherwise said in the past became an issue". He accepted that Ilias had reneged on previous instructions. 11. The Law Society further points to an email the Solicitor received from Toly on 7 June 2012 authorising him to deduct a total of $13,600.00 from the proceeds of sale but requiring the Solicitor to pay the balance of the money to Toly. At the time of receiving that email the Solicitor understood – the Law Society submits – that Ilias had reneged on his earlier instruction about the payment of the Solicitor's costs. He conceded in cross examination (Transcript Day 2 page 102, point 12) that the time of receiving Toly's 7 June email he understood that he ". . . . . had no instructions from the Stoikos' to deduct monies in respect of . . . . . costs"; that they had ". . . . . reneged on their instructions". 12. The Law Society further points to the Solicitor's evidence that clients could not change their mind about how they want money to be disbursed, before money is paid from a trust account, without the acquiescence of the Solicitor. The Solicitor considered (Transcript Day 3, page 115/4.01) the earlier direction to be irrevocable and that his consent was required before the instructions given by Ilias could be changed. He accepted, however, that it was open to Ilias and Toly to agree between themselves as to how the money was to be disbursed. The Society contends that there is no authority for the proposition that a direction, once given, cannot be revoked. It says that it is contrary to common sense and the proper interpretation of the 2004 Act to suggest that a Solicitor is able to disburse trust money in accordance with a direction that a client has withdrawn, or that a revoked direction prevails over a subsequent direction. 13. The Law Society's position is that the 6 July 2012 direction was given by both Ilias and Toly at a point when $33,000.00 remained in the Solicitor's trust account. Even if Ilias had given an earlier direction, that direction was countermanded by the 6 July direction which was given by both the registered proprietors of Earlwood. 14. The Law Society submits that absent any evidence of a new revokable authority the monies in the trust account belonged to Ilias and/or Toly; they were entitled to direct the Solicitor as to how to disburse the money held in the Trust Account so long as it remained in that account. 15. The Law Society then deals with the Solicitor's contention of an inability on the Solicitor's part to determine which of Ilias or Toly was entitled to the monies held in the trust account. It refers to the letter of T A Williams to the Law Society of 13 January 2014 (Exhibit A5, AMF1 Tab 18) where it was said: ". . . . . With respect to Toly's position as a Registered Proprietor [the Solicitor] is not in a position to decide what the relative entitlements of the two owners might be to any surplus arising on the sale." 1. The Law Society contends that it was not for the Solicitor to make a determination about the relative entitlements of Ilias and Toly to the $33,000.00. He accepted, as indicated above, that it was open to Ilias and Toly to agree between themselves as to how the money was to be disbursed. He was given an express direction by both of them on 6 July to pay the money to Toly. He was obliged – the Law Society contends – to comply with it. 2. The Law Society then deals with the Solicitor's contention of an entitlement to claim a lien in respect of unpaid legal costs in the amount of $8,009.78. It again refers to the letter of the Solicitor's lawyer to the Law Society of 14 April 2014 indicating that the Solicitor maintained a lien over $8,009.78 of the $33,000.00. The lien was said to be claimed in respect of the unpaid balance of three invoices referred to in the letter from the Solicitor to Ilias and Toly dated 28 June 2012. That letter listed a number of accounts said to be owing. On the second page of the letter the Solicitor indicated his preparedness to compromise certain of those accounts. The lien claimed was over the difference between the total amount payable for invoices dated 21 September 2010, 29 May 2012 and 28 May 2012, less amounts already paid from the proceeds of sale of Earlwood. 3. The Law Society points to the Solicitor's evidence that in May 2012 he reached agreement with Ilias and Toly in respect of the invoices and that he had abandoned his entitlement to the "additional sums referred to in the first column" of page 2 of the 28 June letter. The Solicitor, in giving evidence, disagreed with the suggestion that, given the content of the 28 June letter, he had abandoned his claim to the additional amounts sought. The Law Society contends, however, that on a plain reading of page 2 of the 28 June 2012 letter it conveys the Solicitor giving effect to an agreement previously reached regarding costs. The Solicitor deducted those costs from the trust account accordingly. His conduct was – the Society contends – unequivocal and inconsistent with him later asserting an entitlement to charge the balance of the invoices. Accordingly, the Law Society contends that the Solicitor has waived any entitlement to the balance of the invoices and therefore had no basis to assert a lien over the $8,009.78. 4. The Law Society's submissions then deal with the contention by the Solicitor of an entitlement to withhold payment of the $33,000.00 to Toly on the ground that claims could be made against that money by one or more of the parties listed in the Issues for Determination 8(d)(i) to (vi) including namely the trustee of the bankrupt estate of Mr Chaouk, the caveators and the estate of the late Nicholas Stoikos. 5. The Law Society contends that, in relation to the parties listed in the Issues for Determination 8(d)(i) to (v), the caveats lodged by those parties had either lapsed or were withdrawn prior to or upon settlement. In respect of the remaining prospective claimant namely the estate of the late Nicholas Stoikos, the Law Society contends that on Day 3 of the Hearing the Solicitor appeared to suggest that the proceeds of the sale of the property were to be paid to the father of Ilias and Toly (Transcript Day 3, page 115, line 08). Additionally, the Society points to the Solicitor conceding, at the time of sending a 20 December 2016 letter to the Office of State Revenue, that no proceedings had been commenced by any of the parties at (i) to (v) in respect of the $33,000.00, nor had the Solicitor received a demand from any of those parties. Additionally, he was not aware of any legal proceedings having been commenced by, nor had received any demand from, the estate of the late Nicholas Stoikos. In the circumstances, the Law Society submits that the Tribunal would not be persuaded that the Solicitor had a legitimate basis to withhold the $33,000.00 from Toly because the money may have been the subject of claims by any of the parties listed at (i) to (vi) of Issue for Determination 8(d). The Law Society further submits that, in any event, the monies were being held exclusively by the Solicitor for Ilias and/or Toly unless or until a judgement was handed down by a Court requiring the Solicitor to pay the proceed of sale to a third party. The Society cites Legal Services Board v Gillespie-Jones (2013) 249 CLR 493 in support of the proposition that even if third parties may have had a claim against either Ilias or Toly, that did not give them any beneficial interest in the monies held on trust by the Solicitor; such monies being held exclusively for the benefit of Ilias and/or Toly. 6. The Law Society contends that Ground 1 of the Application has been made out for the following reasons. As none of the matters listed at (a) to (d) in Issue For Determination (8) constituted a lawful basis on which the solicitor could refuse to pay the $33,000.00 to Toly in accordance with the 6 July direction, the Solicitor has failed to account to Ilias and Tolyu in respect of those trust monies. This is a breach of the Solicitor's duties to pay amounts owing to beneficiaries to which they are entitled.The Law Society then makes its submissions as to whether the Solicitor has breached s 255 of the 2004 Act, arguing that it has made out Ground 2 of the Application. 7. The Law Society points out that the Solicitor did not pay the $33,000.00 to Toly in accordance with the July direction; instead retaining the money until 20 December 2016 when payment was made to the Office of State Revenue as unclaimed money. As the Solicitor was not entitled to refuse to disburse the $33,000.00 from the Trust Account by reason of any of the circumstances contemplated by s 261(1) of the 2004 Act. The money in the trust account was held exclusively for Ilias and Toly and he was required to disburse the money as they directed. He had no statutory entitlement to withhold the $33,000.00 contrary to the express 6 July direction. He therefore contravened – the Law Society contends – s 255(1)(b). 8. The Law Society disputes the contention that the statutory obligations in Part 3.1, Division 2 of the 2004 Act exclude the operation of a concurrent substantive equitable failure to account. It submits that the obligations co-exist. It further refutes the Solicitor's submission that a breach of s 255 of the 2004 Act will only occur where money is disbursed from a trust account, noting that the Solicitor cites no authority in support of the proposition. It contends that the Solicitor may contravene s 255 not only by making an incorrect disbursement, but also by failing to comply with the statutory mandate, namely that the Solicitor "must . . . .disburse the trust money" in accordance only with a client's direction. 9. The Solicitor, by way of further reply, submits that the mere fact that the Stoikos brothers were the registered proprietors of the property, were the Solicitor's clients and that the trust account ledger was in their name, is not determinative of who was the person or persons exclusively entitled to the trust monies. He points out that neither Ilias nor Toly gave oral evidence and that that represents a critical vacuum in the Law Society's evidentiary case. Neither attended to give evidence at the hearing, and, consequently, rulings were made as to the admissibility of their affidavit evidence. The Solicitor contends that his evidence as to being informed by Ilias, prior to receipt of the 6 July 2012 direction, that it was the parents who were entitled to receive the proceeds of sale, is uncontradicted and that in the absence of evidence from the Stoikos brothers the Tribunal does not know who was, in truth, exclusively entitled. Submissions re: - Breach of Undertaking (Application Grounds 3 - the Truong Complaint) 1. The Law Society points to the admission by the Solicitors in his Reply that on 6 September 2011 his law practice sent a letter to Mr Truong providing the undertakings referred to in the Application. The Solicitor has been sole principal of the firm since April 2006 and therefore operated the law practice Konstan Law as a "sole practitioner", being defined in s 4(1) of the 2004 Act as: "An Australian legal practitioner who engages in legal practice of his or her own account". 1. The law practice is not a separate legal entity to the Solicitor. By reason of the definitions "law practice" and "sole practitioner" in the 2004 Act, where a law practice consists of a sole practitioner the two are one and the same. 2. The Law Society also relies on the Solicitor's admission in evidence as to whether the 4 undertakings in the relevant 6 September 2011 letter were his undertakings. He responded "Yes, on behalf of the firm". The Law Society further relies upon the Solicitor's admission in his Reply that he "signed the undertaking at the request of an employee …", and the concession in his Affidavit [at paragraph 94] that the letter providing the undertakings was presented to him for him to sign, and he signed it. 3. The Law Society submits that this is not the case of a solicitor giving undertakings unbeknown to a supervising solicitor or partner of the firm. Moreover, the Solicitor was the only supervising lawyer in relation to the Nguyen matter (the subject of the undertakings) (Transcript Day 4, page 18, line 02). 4. He conceded (Transcript Day 4, page 19, line 08) that he, as the supervising partner, and Mr Ramsay had primary responsibility for compliance with the undertakings. 5. The Law Society relies on Vincent Coffini [1994] NSWLST 25 when the then Legal Services Tribunal of New South Wales said: "… the undertakings are personal to the practitioner and bind that practitioner, not as a matter of contract but as a matter of professional conduct and comity, and will be enforced by the courts because legal practitioners are officers of the court and without enforcement undertakings would be worthless, persons in courts would be unable to rely on the word of a legal practitioner and this aspect of legal practice, that demands compliance for legal efficacy would collapse". 1. The Law Society concedes that the Solicitor was not required to personally take all necessary steps to honour the undertakings given to Mr Truong. It refers to the Revised Professional Conduct and Practice Rules 1995, being the rules that were in force in September 2011 when the undertakings were given. 2. The 1995 Rules did not require the Solicitor to personally perform the undertakings. 3. In its Application, the Law Society complains that the Solicitor: 1. Did not present the complainant's [Mr Truong's] memorandum of fees and disbursements dated 2 September 2011 to the relevant insurer at the successful completion of the matter; and 2. Did not liaise with the complainant in respect of any costs and disbursements. 3. There is no allegation that Undertakings Nos 3 and 4 were not complied with. 1. In providing particulars, the Law Society contends that the Solicitor sent a letter to the Workers Compensation Insurer - Allianz - on 12 December 2012 which failed to include Mr Truong's memorandum of fees in accordance with the undertaking; further, that in breach of the undertakings the Solicitor did not present the tax invoice to the relevant insurer upon completion of the matter and that in further breach, the Solicitor did not liaise with Mr Truong in respect of any costs and disbursements. 2. The Solicitor submits that on the facts before the Tribunal there was no breach of either undertaking and that, if there was a breach, it was not a breach by the Solicitor personally. The Solicitor refers to the 29 August 2011 transfer of the Nguyen file to Konstan Lawyers, and the seeking of the undertakings by Mr Truong of 2 September 2011. The Solicitor refers to the letter giving the undertakings having Mr Ramsay's correspondence reference upon it, the subsequent confirmation by Mr Truong of the sufficiency of the undertakings on 10 October 2011 and at the same time provision by Mr Truong of a tax invoice for $4,564.30 inclusive of disbursements. 3. The Solicitor submits that Mr Truong had at all times been dealing with Mr Ramsay rather than the Solicitor and that the undertakings were not, in their terms, personal to the Solicitor. He says there was nothing in the correspondence that suggests that Mr Truong was seeking to rely upon the performance of the undertakings by the Solicitor personally, as distinct from the person within the firm with carriage of the Nguyen matter, that is, Mr Ramsay. 4. On the allegation of failure to liaise, the Solicitor points to Mr Ramsay's 13 December 2011 letter suggesting that Mr Truong's costs and disbursements seemed excessive. This was, the Solicitor submits, "liaison". 5. The Solicitor further submits that pursuant to the Workers Compensation regime, the undertaking, being for a Workers Compensation matter, could not have been effective even if the invoice of Mr Truong had been presented to the insurer. 6. In answer to the Solicitor's submission that the employee, Mr Ramsay, relevantly had carriage of the Nguyen matter, the Law Society contends that the Solicitor was the lawyer ultimately responsible for the matter. It points to the Solicitor's concession that he was the only supervising lawyer in respect of the matter. It submits that the obligations of the Solicitor do not permit the shifting of responsibility for the clients to an employed non lawyer. It says that even if the Solicitor properly sought to delegate the performance of the undertakings to Mr Ramsay, the Solicitor still was required to ensure the timely and effective performance of the undertakings, which he did not do. 7. As to what steps the Solicitor personally took to discharge his responsibilities, the Law Society refers to the Solicitor's affidavit which indicated that during the period 6 September 2011 (when the undertakings were given) to approximately 22 August 2014 (when the Solicitor was notified of the complaint made by Mr Truong), those steps consisted solely of delegating performance to Mr Ramsay (Affidavit - paragraph 97). 8. The Law Society submits that there is no evidence of the Solicitor making any other efforts to discharge his responsibilities prior to Mr Truong making his complaint. 9. The Law Society contends that having regard to the fact that the undertakings were given personally by the Solicitor, the Solicitor is legally responsible for any failure to comply with the requirements of the undertakings; further, that it constituted a binding contractual obligation of the Solicitor to Mr Truong: Russo v Dupree [1989] 217 ALR 54. The fact that the Solicitor asked somebody else to comply with the undertakings on his behalf did not - the Law Society submits - relieve him of any personal obligations in the event the undertakings were not honoured. 10. The Law Society also submits that there is no evidence of the Solicitor asking Mr Ramsay about the status of the undertakings; this in response to the Solicitor's contention that Mr Ramsay never told him that there was a breach of the undertakings. 11. As to the Solicitor's contention that it was not appropriate for Undertaking No 1 to be given in the context of a Workers Compensation matter (and that there was a mistake, common to both the Solicitor and Mr Truong as to its applicability and efficacy), the Law Society submits that the solemnity of solicitors' undertakings demand that careful attention be paid to the terms of any undertaking before being given. It also points to the Solicitor's concession in his affidavit (paragraph 95) that he did not give thought to the fact that the precise wording of the undertaking was not appropriate to a Workers Compensation matter. It points to failure on the Solicitor's part to approach Mr Truong, after giving the undertaking, to be released from it. 12. As to the Solicitor's submission that there was in fact liaison with Mr Truong about costs and disbursements, the Law Society points out that on the evidence of Mr Truong, between 13 December 2011 to mid May 2013, he did not receive any notification from Konstan Lawyers that the Nguyen matter had settled. Mr Truong gave further evidence of seeking to communicate with Konstan Lawyers and Mr Ramsay about his outstanding costs between the period 22 May 2013 and 4 August 2014. He estimates that he made a minimum of 5 to 6 telephone calls and sent more than 2 emails. 13. The Law Society points to Mr Ramsay's evidence (Transcript Day 1, page 107, line 20), that at no time after receiving the 22 May 2013 letter did he provide Mr Truong with details of the settlement and did not deny that Mr Truong may have attempted to call him, and may have emailed him. It further points to Mr Ramsay's evidence, (Transcript, Day 1, page 110, line 02), that in the period 22 May 2013 to January 2014, he did not negotiate with Mr Truong about Mr Truong's costs. There is no evidence, the Law Society submits, that the Solicitor himself sought to liaise with Mr Truong in respect of costs and disbursements prior to Mr Truong making his complaint. Consideration, Findings and Reasoning on Material Questions of Fact and Law A Standard of proof 1. Unless otherwise stated in these Reasons, findings made by the Tribunal are made on the basis that we are comfortably satisfied in respect of each to the standard in Briginshaw v Briginshaw [1938] 60 CLR 336. B Issues Requiring Dermination (1), (5) - (13) - Trust Account Monies (Application Grounds 1 and 2 - the Stoikos Complaints). Issue (1) - In respect of the Stoikos complaint (Grounds 1 and 2) for the purpose of s255 of the 2004 Act, were Ilias (Ilias) and Apostolas (Toly) Stoikos as a matter of law ". . . . . the persons on whose behalf . . . . ." the sum of $33,000.00 held in the Solicitor's trust account on and from 4 July 2012 onwards ". . . . . was received . .." 1. The evidence in our view demonstrates that the funds deposited into the trust account of the Solicitor on or about 30 May 2012 in respect of the sale of Earlwood were exclusively for the benefit of Ilias and Toly pursuant to s 255(1)(a) of the 2004 Act. The evidence demonstrates that Ilias and Toly were the persons on whose behalf the money was received by the Solicitor. The subsection identifies the person "… on whose behalf [the money] is received". The statutory obligation is for the Law Practice to hold the trust money exclusively for that person or persons. 2. The Solicitor entered into a cost agreement in respect of the sale of Earlwood with both Ilias and Toly. Earlwood was registered in both of their names. The Solicitor's 21 February 2012 letter, referrable to Konstan Lawyers acting on the sale, was forwarded to both Ilias and Toly to the Morgan Street, Earlwood premises the subject of the sale. The Solicitor's letter acknowledged receipt of instructions from both Ilias and Toly in relation to the sale. There is no evidence before the Tribunal that the letter did not reach both Ilias and Toly, or that the address of either of them was other than the Earlwood address. Although the Tribunal has the benefit of the first page of a counterpart Contract for Sale, which appears to be executed by the purchasers, it is reasonable to conclude that the exchange would not have occurred unless the purchaser's solicitor obtained on exchange a counterpart contract bearing the signatures of both Ilias and Toly, and those signatures being witnessed. The Solicitor's retainer commenced approximately 2 months prior to exchange. 3. The Solicitor's post settlement 28 June 2012 letter, also forwarded to the Earlwood address and addressed to both Ilias and Toly, confirms the sale having taken place and, amongst other things, confirms receipt by the Solicitor of $107,075.09. The 28 June letter itself attached the Solicitor's 30 May 2012 letter which, amongst other issues, showed the amount paid over by the purchasers on settlement. The 28 June 2012 letter attached a document headed "Trust Account" recording a sale price of $107,075.09 being held in the Solicitor's Trust Account. 4. There is also in evidence the email of Toly sent to the Solicitor and dated 2 June 2012 which noted the Solicitor was holding the proceeds of sale. 5. We find that the proceeds of sale were received by the Solicitor on behalf of Ilias and Toly as the registered proprietors and vendors of Earlwood. There is no evidence, as at the time of completion of the sale on 29 May 2012 and - on that occasion - receipt by the Solicitor of the balance of sale proceeds into his trust account, of anyone other than both Ilias and Toly being the persons on whose behalf the Solicitor received the trust money. 6. There is no evidence from the date of the Solicitor first being retained to act on the sale and the date of settlement of 29 May 2012 and receipt by the Solicitor of the sale proceeds into his trust account, of the solicitor receiving the monies on behalf of anyone other than the registered proprietors and vendors. There is no evidence of the Solicitor being on notice, as at 29 May 2012 when the trust monies were received, of the monies being legally or beneficially owned by anyone other than Ilias or Toly, or that anyone other than the Stoikos brothers made claim to the money. The letter to Ilias and Toly's parents of 30 May 2012, referred to them remaining in occupancy of the premises following settlement. Hence it is reasonable to conclude that letters sent to the Stoikos brothers to the Earlwood address in the February to June 2012 period would have come to the attention of both of them. In particular, the 30 May letter refers to the lapsing of the caveats that had been lodged on title prior to settlement and the registered mortgage being discharged on settlement. The letter does not suggest that the Solicitor was on notice of any claim to any part of the settlement monies by either the discharging mortgagee or by any of the caveators. Nor did the letter mention the Stoikos' parents having a claim to the proceeds. Issue (5) - Did the Solicitor hold the funds deposited into his trust account on or about 30 May 2012 in respect of the sale of Morgan Street, Earlwood (Funds) exclusively for the benefit of Ilias and/or Toly pursuant to s255(1)(a) of the 2004 Act? 1. The Solicitor was required to hold the funds deposited into his trust account on or about 30 May 2012 in respect of the sale of Earlwood exclusively for the benefit of Ilias and/or Toly pursuant to s 255(1)(a) of the 2004 Act. Having found in respect of Issue (1) that Ilias and Toly were the persons "on whose behalf [the money was] received" pursuant to the subsection, the statutory obligation was for the law practice to thereafter hold the trust money so deposited exclusively for those persons. The statutory obligation to do so remained until 3 December 2016 when the $33,000 settlement proceeds that had remained in the trust account was paid to the Consolidated Fund - Unclaimed Monies. Issue 6(a) - In respect of the amount of $33,000.00 held in the trust account during the period from 4 July 2012 to 20 December 2016, being the balance of the funds - did the Solicitor have an obligation to account to Ilias and/or Toly? 1. The Solicitor, we find, did during the period 4 July 2012 to 20 December 2016 had an obligation to account to Ilias and/or Toly in respect of the amount of $33,000 held in the trust account. 2. By their 6 July 2012 letter, Ilias and Toly jointly directed the Solicitor to pay the balance of the sale proceeds then in the trust account to Toly. The Solicitor did not pay the $33,000 to Toly in accordance with the signed joint direction as to dispersal of the trust monies. 3. The Victorian Court of Appeal in Batrouney v Forster [2016] VSCA 80 at [89] said: "The existence and proper maintenance of trust accounts has been and remains a central feature of a solicitors practice. In holding their clients' funds in trust accounts, solicitors are trustees. As such they are subject to the general law of fiduciary obligation; they are also subject to the statutory obligations imposed by the [Legal Profession Act 2004 (VIC)]. Compliance with those obligations secures the integrity of a significant aspect of legal practice; it is at the heart of the administration of justice." 1. We agree with the Law Society's submission that a legal practitioner who receives money from a client to be held for and on behalf of the client is a trustee in the ordinary sense. The solicitor is required to deal with trust monies in accordance with the legal practitioner's statutory and equitable duties in respect of those monies. 2. The Solicitor, therefore, owed - in addition to the statutory duties set out below - a fiduciary duty to account to Ilias and Toly for the trust funds. 3. As Bell, Gageler and Keane JJ in Legal Services Board v Gillespie-Jones (2013) 249 CLR 493 at [113], found: "[U]nless there is something in the circumstances of the case to indicate otherwise, a person who has 'the custody and administration of property on behalf of others' or who 'has received, as and for the beneficial property of another, something which he is to hold, apply or account for specifically for his benefit' is a trustee in the ordinary sense.' A legal practitioner who receives money from a client to be held for and on behalf of the client for another person archetypally answers that description." 1. Their Honours went on to discuss the statutory obligations applicable in that case; obligations that were materially similar to s 255 of the 2004 Act, then went on at [123] to find that those obligations were: "consistent only with [the solicitor] holding the money on trust exclusively for the benefit of the client and subject to the instructions of the client." (our emphasis) Issue 6(b) - In respect of the amount of $33,000.00 held in the trust account during the period from 4 July 2012 to 20 December 2016, being the balance of the funds - did the Solicitor have an obligation to comply with s 255 of the 2004 Act? In particular, on the assumption that the direction of Ilias and Toly to the Solicitor dated 6 July 2012 was effective as a direction for the purposes of s 255(1)(b) of the 2004 Act, was the failure of the Solicitor to disburse the remaining funds then held in the trust account a disbursement of that money for the purposes of that provision and thus a contravention of it? 1. We find that the Solicitor did have an obligation to comply with s 255 of the 2004 Act in respect of the $33,000 held in his trust account during the period 4 July 2012 to 20 December 2016 on the assumption that the direction of Ilias and Toly to the Solicitor of 6 July 2012 was effective as a direction for the purposes of s 255(1)(b) of the 2004 Act. The failure of the Solicitor to disburse the remaining funds held in the trust account was, we find, a dispersal of that money for the purposes of that provision and thus, a contravention of it. 2. As the Law Society submits, the Solicitor was required to disburse the money only in accordance with a direction given by clients, s 255(1)(b). The only exception to the obligations of a law practice under s 255 are those set out in s 261(1) concerning where a lien was exercised, for payment of legal costs if the relevant procedures or requirements of the Act are complied with, or when being dealt with as unclaimed money under s 266. 3. The Solicitor, we find, contravened s 255 of the 2004 Act by refusing to pay the monies in accordance with the 6 July 2012 direction given by the clients, and where the Solicitor had no statutory authority to withhold such payment. We do not accept the Solicitor's submission that in respect of trust monies that have been deposited into a general trust account, a breach of s 255 will occur when, but only when, trust money is dispersed from a practitioners general trust account otherwise than in accordance with a direction. 4. The effect of the Solicitor's submission would be that a law practice could leave money in a trust account and make no disbursement of the monies whatsoever, even in circumstances where the client had properly and lawfully requested payment be made from such an account, (assuming there was no entitlement to a lien or payment of legal costs under s 261), yet contend that there has been compliance with, and no breach of, s 255(1)(b). We agree with the Law Society's submission that such an outcome would be contrary to the purpose of the 2004 Act as evidenced by Division 2 of Part 3.1, requiring a law practice to deal with trust money in accordance with directions given by a client and in accordance with the law practice's duty as a trustee. 5. The proper construction of s 255(1)(b) of the 2004 Act, in accordance with its ordinary and grammatical meaning, is that a law practice must disburse trust monies in circumstances where a direction has been given by the person or persons on whose behalf the money is received; further, such disbursement must be only in accordance with the directions of the client or clients. Here, the direction was given - we find - by the persons on whose behalf the money was received namely, Ilias and Toly. The Solicitor's failure to comply with the 6 July 2012 direction from Ilias and Toly collectively was therefore, capable of constituting a failure to comply with that sub-section. 6. The Solicitor cites no authority to support his submission that a breach of s 255 of the 2004 Act will only occur when money is disbursed from the trust account. Neither party is able to refer the Tribunal to any authorities that squarely deal with the point in issue. Nevertheless, our view is that a solicitor may contravene the section not only by making an incorrect disbursement, or a disbursement contrary to a client's direction, but also by failing to comply with the obligation opposed by the section, namely that a solicitor "must … disburse the trust money" in accordance only with the client's direction. 7. It is noted that the Law Society does not make a complaint about the conduct of the solicitor after 20 December 2016. It says that the failure to disburse commenced on 6 July 2012 being the date of the joint direction from Ilias and Toly. Issue (7) - Did the letter dated 6 July 2012 constitute a direction from Ilias and Toly to disburse the Remaining Funds to Toly (July Direction)? 1. The 6 July 2012 letter from Ilias and Toly to the Solicitor constituted a direction by them to the Solicitor to disburse the remaining funds in the trust account to Toly. 2. The letter was plain in its terms and was co-signed by both Ilias and Toly. The Solicitor conceded when giving oral evidence that he understood from the terms of the letter that it was a direction that he was to pay the balance of the proceeds of sale to Toly. 3. The Solicitor agreed with the proposition put to him in cross examination in relation to the 6 July 2012 letter; "So you understood from that that they were directing you, whether you agreed with it or not, the direction was that you should pay the balance of the proceeds of sale to [Toly]. You understood that's what they were saying" (day 3, page 102, lines 14-19). 4. During the same passage of cross examination, the Solicitor conceded that he received the letter and did not send any letter to Ilias and Toly by way of response. He also conceded that, at that time, the $33,000 remained in his trust account. Further, the Solicitor conceded in cross examination that Ilias and Toly, as between each other, could reach an agreement as to how they wanted the money disbursed, and that the 6 July 2012 letter was the presentation by the two of them to the Solicitor of a combined position as to where they wanted the surplus funds paid. 5. The 6 July 2012 letter was a clear direction to the Solicitor by both Ilias and Toly that the Solicitor was to pay the balance of the monies sitting in his trust account to Toly within 7 days. 6. The letter was, we find, a direction, as that word is used in s 255(1)(b), and one given by the persons on whose behalf the trust money was received, as those words are used in subsection (1)(a). Issue 8 - If the answer to (7) above is yes, did any of the following matters constitute a lawful basis upon which the Solicitor could refuse to pay the monies to Toly in accordance with the July Direction - (a) An alleged direction given by Ilias to the Solicitor and/or an alleged agreement between Ilias and the Solicitor, in both cases given or entered into prior to 5 June 2012, to pay amounts received from the sale of Morgan Street, Earlwood to the Solicitor for any outstanding legal costs and debts owed by Ilias to the Solicitor 1. Neither the alleged direction given by Ilias to the Solicitor nor the alleged agreement between Ilias and the Solicitor, either given or entered into prior to 5 June 2012, to pay amounts received from the sale of Earlwood to the Solicitor for outstanding legal costs or debts owed to the Solicitor, constituted a lawful basis on which he could refuse to pay the moneys to Toly in accordance with the 6 July 2012 direction. 2. Whilst the Solicitor gave evidence of having been authorised prior to 5 June 2012, by Ilias, to deduct legal fees and debts owing to the Solicitor from the sale proceeds, any such earlier direction coming from Ilias in early June 2012 would not prevail over the 6 July 2012 joint direction for the following reasons. Firstly, the statutory obligation to disburse trust money only in accordance with the directions given by the persons on whose behalf it is received is not satisfied if the direction is only given by one such person when there are 2 persons on whose behalf the money was received. For any pre 5 June 2012 direction to be an operative direction it would need to have come from both Ilias and Toly. 3. Secondly, other than the Solicitor's evidence of the conversations that he contends he had with Ilias there is no document evidencing the terms of the alleged agreement or direction. The Solicitor conceded in cross examination that these earlier arrangements were oral only. The Tribunal is not persuaded to the Briginshaw standard as to the existence or terms of any pre 6 July 2012 agreement or direction. This is so especially in circumstances where it was open to the Solicitor, in the event of any agreement being reached or direction given in the pre 5 June 2012 period, to seek a joint written direction from the two clients for whom he was acting in the sale of Earlwood, (and on whose behalf he was receiving the balance of the sale proceeds into his trust account) reflecting any oral agreement with Ilias or direction from him. 4. Thirdly, even if there was an earlier agreement reached between the Solicitor and Ilias, or a direction given by Ilias to the Solicitor, the Solicitor in cross examination conceded that during the course of the 5 June 2012 meeting with Ilias and with Ilias and Toly's parents "whatever was directed, authorised or otherwise said in the past [by Ilias] became an issue". The Solicitor agreed with the proposition put to him in cross examination (day 2, page 102, line 26), that at the 5 June 2012 meeting: "They reneged any previous instructions they gave. You now understood that they no longer gave those instructions." 1. Additionally, as to the efficacy of any pre 6 July 2012 instruction or agreement the Tribunal is persuaded by the Solicitor's affirmative answer to the following question (day 2, page 102, line 30): "So, it's the case, then, that at the time of receiving Toly's email of 5, 7 June 2012 you understood that you had no instructions from the Stoikos' to deduct amounts in respect of your costs. That they had reneged on their instructions." 1. We do not accept the Solicitor's submission of inconsistency between the 6 July 2012 letter (to the effect that no one but Ilias and/or Toly had any interest in the proceeds) and what the Solicitor was told at the meeting with Ilias and the parents on 5 June 2012, namely the statement that the parents were entitled to the proceeds. Firstly, there is no evidence of the alleged claim of the parents to be entitled to the proceeds being evidenced in writing to the Solicitor; either by the parents or by Ilias. Secondly, there is no evidence of any enquiry being made by the Solicitor, or the parents or by Ilias as to the basis upon which the parents might be so entitled. The only evidence before the Tribunal is that it was simply a stated assertion during the course of the meeting. Thirdly, there is no evidence of Toly being informed of the proposition that the parents considered the proceeds to be theirs, nor of Toly accepting that proposition. 2. Fourthly, there is no evidence of the Solicitor seeking from his clients, Ilias and Toly, written instructions in relation to the parent's contention, nor as to what the client's directions to the Solicitor were - jointly - referable to the monies held in trust. Fifthly, s 255(1)(b) requires a law practice to comply with a direction given by the person or persons on whose behalf the trust money is received. Here, as we have found, those persons were Ilias and Toly, not the parents. Whatever unparticularised oral assertion might have been made by persons other than the Solicitor's clients could not be a direction from the clients. It could not be a direction from the persons on whose behalf the trust money is received. Issue 8(b) - the alleged inability of the Solicitor to determine which of Ilias or Toly was entitled to the monies held in the trust account 1. Any inability of the Solicitor to determine which of Ilias or Toly was entitled to the trust monies did not constitute a lawful basis on which the Solicitor could refuse to pay the trust monies to Toly in accordance with the 6 July 2012 direction. 2. The Solicitor's statutory obligation under s 255(1)(b) does not require, prior to compliance, a solicitor to make a determination about the relative entitlements, equitable or otherwise, of persons/clients on whose behalf - jointly - trust money is received. The 6 July 2012 letter was an express direction by both of them to pay the money to Toly. It contained no contention, or even suggestion, as to the relative entitlements of Ilias and Toly to the $33,000 other than the clear direction that "… all funds are due and payable to [Toly] Stoikos…". Even if there were equitable, contractual or other claims or rights as between Ilias and Toly to the $33,000, the Solicitor had no lawful basis to refuse to pay the trust funds in accordance with the 6 July 2012 joint written direction. Nor, on the evidence before us, was there any request by either Ilias or Toly to investigate for either of them any such equitable or contractual or other rights, or advise either of them in respect of such rights. The retainer agreement gave the Solicitor no authority to explore or advise in respect of such issues. 3. As at the time of the receipt of the 6 July 2012 letter, there was no dispute or issue as to which of Ilias or Toly was entitled to the monies. They had jointly instructed the Solicitor, and issued him with a direction that the money was to be paid to Toly. 4. We do not agree with the Solicitor's submission that the Law Society needs to prove, in respect of Application Ground 1, that Ilias and Toly were together all of the beneficiaries of the trust of the $33,000 or whether they were together possessed of an absolute, vested and indefeasible interest in that sum. 5. For reasons earlier discussed, we find that whatever direction may have been given by Ilias to the Solicitor prior to 6 July 2012, and whatever agreement may have been reached by the Solicitor and Ilias concerning payments of legal costs and other debts from the proceeds, the 6 July 2012 joint direction countermanded any earlier agreement between Ilias and the Solicitor, or direction given by Ilias to the Solicitor. Further, there is no inability of the Solicitor by and after 6 July 2012 to determine which of Ilias or Toly was entitled to the monies in the trust account because he had received on 6 July 2012 a clear and express written instruction from them jointly that Toly was entitled to the money from the trust account. The same letter constituted a direction for payment to Toly. There is no evidence in the documentation or given orally by the Solicitor of anyone other than Ilias and Toly being beneficiaries of the trust amount of $33,000 as at 6 July 2012. Nor is there any evidence of anyone other than Ilias and Toly being possessed of an interest in that sum, including - for the reasons that we have given earlier - the parents. 6. We further disagree with the Solicitor's submission that any directions given by Ilias to the Solicitor prior to 6 July 2012 (either on his own account or jointly with Toly if one accepts that Toly had clothed Ilias with actual or ostensible in the pre 6 July period), were directions that were irrevocable and therefore not capable of being unilaterally withdrawn. Firstly, there is no evidence on which we could comfortably find that in the pre 6 July 2012 period Toly had clothed Ilias with actual or apparent authority. Secondly, the alleged direction of Ilias to the Solicitor of early June 2012 and the alleged agreement between Ilias and the Solicitor in the same period were not, on the evidence before the Tribunal, irrevocable directions. There is no evidence of the Solicitor responding to the 6 July 2012 letter, either immediately upon its receipt or at all, suggesting that he was not obliged to comply with it by reason of earlier arrangements with Ilias being irrevocable. Issue (8)(c) - The alleged entitlement to claim a lien in respect of unpaid legal costs in the amount of $8,009.78 1. The alleged entitlement to claim a lien in respect of unpaid legal costs in the amount of $8,009.78 did not constitute a lawful basis upon which the Solicitor could refuse to pay the trust monies in accordance with the 6 July direction. 2. This issue arises from the Solicitor's lawyer's letter to the Law Society of 14 April 2014 indicating that the Solicitor maintained a lien over $8.009.78 of the $33,000.00; the lien arising in respect of the unpaid balance of three invoices referred to the a letter from the Solicitor to Ilias and Toly dated 28 June 2012. That letter listed a number of amounts said to be owing and, on the second page, stated a preparedness by the Solicitor to compromise certain of those accounts. The lien was claimed as the difference between the total amount payable for the three invoices, less amounts already paid to the Solicitor from the proceeds of sale. Cumulatively, the difference for the three invoices came to $8,009.78. 3. Given that the Solicitor, when cross examined [Transcript Day 3, page 128, point 10] conceded that he had abandoned his entitlement to the additional sums referred to in the 28 June letter, and the clear indication in the letter itself that the Solicitor was prepared to reduce the amount payable to him in respect of his invoices, we find that the Solicitor has waived any entitlement to the balance of the invoices and was therefore not entitled to maintain a lien. Issue (8)(d) - The alleged entitlement to withhold payment of the trust monies to Toly on the Grounds that claims could be made against the monies by: (i) The Trustee of the bankrupt estate of Nawaf Chaouk, (ii) Dennis Richard Lowe, (iii) Tom Powers, (iv) Amgad Ghabrial, Zhi Rui Zhou, Jia Xian Chen, Li Juan Ma, Dennis Mei and Xiao Hong Chao, (v) Ian Charles Francis, (vi) The Estate of the late Nicolas Stoikos 1. There was no lawful basis on which the Solicitor could refuse to pay the trust account funds to Toly in accordance with the 6 July 2012 direction on the ground that claims could be made against those funds by the Trustee of the bankrupt Estate of Mr Chaouk, the caveators, or the Estate of the late Nicholas Stoikos. 2. This is so for the following reasons. 1. In respect of the Trustee of the bankrupt Estate of Mr Chaouk and the caveators, the caveats lodged by those parties on title had either lapsed or were withdrawn prior to settlement. 2. Secondly, in respect of the Estate of the late Nicholas Stoikos, a contention that a claim might be made by him is inconsistent with the Solicitor's position that, based on the 5 June 2012 conversation with Ilias and the parents of Ilias and Toly, the proceeds of sale were to be paid to the parents. 3. Thirdly, by the time the trust monies came to be deposited with the Office of State Revenue in December 2016, no proceedings had been commenced by any of the parties referred to above in respect of the $33,000.00 to the Solicitor's knowledge; further, he had not received a demand from any of those parties. 4. Fourthly, as we have found earlier in these Reasons, the monies were held by the Solicitor exclusively for Ilias and/or Toly. This was subject to an order of a Court of competent jurisdiction requiring the Solicitor to pay the proceeds of sale to someone other than Ilias and/or Toly. Further, applying the reasoning of Bell, Gageler and Keane JJ in Legal Services Board v Gillespie Jones, even if any of the parties mentioned above may have had a claim against either Ilias or Toly, that did not give any of them any beneficial interest in the monies held on trust by the Solicitor; monies which, per the 2004 Act, were to be held exclusively for the benefit of Ilias and/or Toly. Their Honours said (at [126]): "The legislature is not to be taken to have intended to facilitate the creation of the kind of conflict of interest and duty abhorred by the law and thereby to expose clients to the expense and uncertainty of disputing with their lawyers over the beneficial ownership of trust money." Issue (9) - If the answer to (8) (a), (b), (c) and (d) is no, has the Solicitor failed to account to Ilias and Toly in respect of the trust monies? (Ground 1 of the Application) 1. As none of the four matters referred to in Issue (8) constitute, we find, a legal basis on which the Solicitor could refuse to pay the trust funds to Toly in accordance with the 6 July direction he has, we find, failed to account to Ilias and Toly in respect of those funds. 2. Ground 1 of the Application is established. Issue (10) - If the answer to (8) (a), (b), (c) and (d) is no, has the Solicitor breached s 255 of the 2004 Act (Ground 2 of the Application)? 1. As none of the four matters set out in in Issue (8) constitute, we find, a lawful basis upon which the Solicitor could refuse to pay the trust funds to Toly in accordance with the July direction the Solicitor has, we find, breached s 255 of the 2004 Act. 2. Ground 2 of the Application is established. Also, although not raised by the Solicitor as a specific Issue for Determination, we do not accept the argument raised by the Solicitor at paragraph 63 above that a breach of s 255 of the 2004 Act excludes our finding, as we have done, that there has been a concurrent failure to account. The 2004 Act is not a code. Issue (11) - Did the Solicitor disburse $3,000.00 in satisfaction of purported advances made by him to Ilias for living expenses? 1. For the purposes of establishing whether Application Grounds 1 and 2 are established, we do not consider this issue to be relevant. We therefore, decline to determine it. Issue (12) - On the assumption that the direction of Ilias and Toly to the Solicitor dated 6 July 2012 was effective as a Direction for the purposes of s 255(1)(b) of the 2004 Act, was the Solicitor's failure to disburse the $33,000.00 then held in the Trust Account a disbursement of that money for the purposes of that provision and thus a contravention of it? 1. As found earlier in these Reasons, the Solicitor's failure to disburse the $33,000.00 held in his Trust Account on 6 July 2012 was a disbursement of that money for the purposes of s 255(1)(b). There was, we find, a contravention of that provision. This issue, then, raised for determination, is answered in the affirmative. Issue (13) - Has the Law Society proved as a matter of fact that as at 6 July 2012 and until 20 December 2016 Ilias and Toly were the persons absolutely entitled to the then balance of the Trust Account and thus entitled to terminate the Trust upon which that sum was held? 1. Similarly, as found earlier in these Reasons, Ilias and Toly were the persons on whose behalf the Solicitor had received the trust monies. They were the vendors of the Earlwood property. They instructed the Solicitor to act on the sale. The Solicitor deposited the balance of the sale proceeds into his trust Account. There is no evidence of anyone other than Ilias and Toly being entitled – whether "absolutely" or otherwise - to the balance of the trust account. Ilias and Toly, therefore, were jointly entitled to terminate the trust on which that sum was held. They purported to do so by their letter of 6 July 2012. C Issues Requiring Determination (2), (3), (4), (14) - (17) - Breach Of Undertaking (Application Ground 3 - The Truong Complaint) Issue (2) In respect of the Truong complaint (Ground 3), having regard to the circumstances and terms in which they were given, were the Truong undertakings (as set out in the letter from the Solicitor to Mr Truong dated 6 September 2011), to be performed by the Solicitor personally? 1. Whilst it was not necessary that the Solicitor perform each of the undertakings personally, he did have an obligation to ensure the timely and effective performance of the undertakings if he was not in a position to perform them himself. 2. The Solicitor admits in his Reply that the law practice sent a letter to Mr Truong providing the undertakings. He has been the sole principal since April 2006. He therefore, operated the law practice, Konstan Lawyers, as a sole practitioner. "Sole practitioner" is defined in section 4(1) of the 2004 Act as "an Australian legal practitioner who engages in legal practice on his or her own account." The law practice is not a separate legal entity to the solicitor. 3. Further, the solicitor conceded in cross examination that the undertakings were his "… on behalf of the firm". He signed the letter giving the undertakings. He also conceded that as the supervising partner of Mr Ramsay in respect of the Nguyen matter he and Mr Ramsay had primary responsibility for the compliance with the undertakings. We reject the Solicitor's submission that the undertakings were not in their terms personal to the Solicitor by reason either (a) that the word "we" was used when giving the undertakings nor (b) because there was nothing in the correspondence that suggests that Mr Truong was seeking to rely upon the performance of the undertakings by the Solicitor personally, as distinct from the person in the firm who had carriage of the Nguyen matter - Mr Ramsay. The submission overlooks the fact that the letter in which the undertakings were given was signed by the Solicitor as the sole principal of the firm. If the Solicitor did not wish to be bound by the undertakings, or did not wish to carry the burden of ensuring the timely or effective performance of the undertakings, it was open to him after sending the letter to seek to be released from the performance by Mr Truong, or by a court of competent jurisdiction. No such request or court application was made. Issue (3) - In respect of Undertaking 1 in the 6 September 2011 letter was there a mistake, common to the Solicitor and Mr Truong, at the time the undertaking was given as to its applicability to, and efficacy for, the matter in respect of which it was given. If there was such a mistake, did it constitute a lawful basis upon which the Solicitor was relieved of his obligation to comply with the undertaking? 1. The Law Society in its written submissions acknowledges that both Mr Truong and Mr Ramsay now consider that Undertaking No 1, namely that Mr Truong's 2 September 2011 tax invoice would be presented to the relevant insurer at the successful completion of the matter, was not appropriate in the case of a Workers Compensation matter. The Solicitor in his affidavit [paragraph 95] concedes that he "did not give thought to the fact that the precise wording of the undertaking was not appropriate to a Workers Compensation matter." 2. It is not necessary to make a finding as to whether there was at law a mistake, common to both the Solicitor and Mr Truong, as to the applicability of the first undertaking, or as to its efficacy. Even if such a mistake existed we do not agree with the Solicitor's submission that, in the circumstances, there is no breach of the undertaking. Whether the tax invoice would have been accepted by the insurer or not is not in our view relevant to whether or not the undertaking - having been given - was breached. A mistake of the type suggested, common to both the Solicitor and Mr Truong, did not constitute a lawful basis upon which the Solicitor was relieved of his obligation to comply with this undertaking. 3. Once given, it was open to the Solicitor to approach Mr Truong to be released from the first undertaking citing - if he wished to do so - the mistake as to the applicability of the undertaking, or its efficacy to a Workers Compensation matter. 4. The evidence before the Tribunal demonstrates that the tax invoice was not presented to the insurer. Issue (4) - In respect of Undertaking 2 in the 6 September 2011 letter was there, between the period 6 September 2011 and 1 December 2014, liaison with Mr Truong about any costs and disbursements? Would any such liaison constitute a lawful basis upon which the Solicitor was relieved of his obligation to comply with the undertaking? 1. Undertaking No. 2 given by the Solicitor was: "We will liaise with you in respect of any costs and disbursements and we will return your file to you if an agreement cannot be reached." 1. To answer the second question in Issue (4) first, if we find that there was liaison, there would not then be a breach of Undertaking No. 2. The issue then is was there liaison between this period? 2. The Solicitor submits that the Konstan Lawyers 13 December 2011 letter, signed by Mr Ramsay, contending that Mr Truong's costs and disbursements seemed excessive and that he may have no entitlement to costs, was "liaison" "… in respect of … costs and disbursements". As such, the Solicitor submits that there was no breach of Undertaking No. 2. 3. The Solicitor also points to the letter of Mr Truong of 20 January 2014 which advised that the matter had settled, referred to Mr Truong's professional costs, enclosed a cheque for translation fees in the amount of $139.00, and considered that Mr Truong's costs were excessive for the works performed. An offer was made of $1,500 plus GST. Mr Truong had sent a letter to Konstan Lawyers on 22 May 2013, which, inter alia, referred to costs and disbursements. He also sent an email concerning that letter on 13 June 2013. The Solicitor submits that notwithstanding any belatedness of the response, the sending of the letter of 20 January 2014 was liaison, and hence not a breach of Undertaking No. 2. We agree. Issue 14 - In respect of the Truong complaint did any of the following matters constitute a lawful basis upon which the Solicitor was relieved of his obligation to comply with the undertakings?: (a) - the explanation of the Solicitor that his then employee, Kevin Ramsay, a non-lawyer, had carriage of the Nguyen matter. 1. The explanation of the Solicitor that his then employee Mr Ramsay, a non lawyer, had carriage of the Nguyen matter did not constitute a lawful basis upon which the Solicitor was relieved of his obligations to comply with Undertakings 1, 3 and 4. We have found there that was no failure to comply with Undertaking No 2. 2. The Solicitor has conceded in cross examination that he was the supervising partner of Mr Ramsay, a non lawyer, in the conduct of the Nguyen matter. It is not correct, therefore, to say that Mr Ramsay had "carriage of" the matter. He could not have done so as he was not a legal practitioner. Relevant "carriage" was with the Solicitor. 3. Additionally, as we have found earlier in these Reasons, the Solicitor concedes that - with Mr Ramsay - he had responsibility for ensuring compliance with the undertakings; further, he signed the letter by which the undertakings were given. Even if it was Mr Truong's expectation, to the extent that he thought about it, that the undertakings would be performed by Mr Ramsay rather than by the Solicitor, that expectation is irrelevant to a determination as to whether or not undertakings given personally by a solicitor have or have not been breached by that solicitor. 4. It is inconsistent with the obligations of a solicitor under Rule 26 of the Revised Professional Conduct and Practice Rules 1995 for a legal practitioner to shift responsibility for compliance with undertakings that he or she has given to an employed non lawyer. The Rule provided: "A practitioner who, in the course of the practice, communicates with another practitioner orally, or in writing, in terms which expressly, or by necessary implication, constitute an undertaking on the part of the practitioner, to ensure the performance of some action or obligation, in circumstances where it might reasonably be expected that the other practitioner will rely on it, must honour the undertaking so given strictly in accordance with its terms, and within the time promised, or, if no precise timing is specified, within a reasonable time". 1. The obligation in Rule 26 is personal to the practitioner. It is the practitioner's obligation to ensure performance. The mere fact of a non lawyer having primary carriage of a matter the subject of an undertaking does not constitute a lawful basis upon which the Solicitor was relieved of his obligation to comply with the undertakings given. Issue (14) - In respect of the Truong complaint did any of the following matters constitute a lawful basis upon which the Solicitor was relieved of his obligation to comply with the undertakings?: (b) the explanation of the Solicitor that Mr Ramsay never told the Solicitor that the Solicitor was in breach of the undertakings. 1. The explanation that Mr Ramsay did not tell the Solicitor that he was in breach of the undertakings did not constitute a lawful basis upon which the Solicitor was relieved of his obligations to comply with those undertakings. 2. Having signed the letter by which the undertakings were given, and bearing in mind that - we find - the undertakings were personal to the Solicitor, there can be no relief from a finding a breach of undertakings if the non lawyer, Mr Ramsay, did not inform the Solicitor he was in breach. Our view is only strengthened by the fact that, on the evidence before us, the Solicitor did not ask Mr Ramsay about the status of the undertakings prior to Mr Truong making his complaint. Issue (15) - If the answer to (14) (a) or (b) above is no, did the Solicitor fail to comply with the Undertaking 1 (Ground 3 (a) of the Application)? 1. As Issues (14)(a) and (14)(b) are answered in the negative, we find that the Solicitor did fail to comply with Undertaking No. 1. 2. Ground 3(a) of the Application is established. Issue (16) - If the answer to 14 (a) or (b) above is no, did the Solicitor fail to comply with the Undertaking 2 (Ground 3 (b) of the Application)? 1. For reasons expressed on Issue (4) we find the Solicitor did not fail to comply with Undertaking No. 2. 2. Ground 3(b) of the Application is not established. Issue (17) - In respect of Undertaking 1 was the Ramsay/Truong correspondence dated 13 December 2011, and Mr Truong's acquiescence in the observation therein made, a waiver of its performance? 1. We find: 1. It is incorrect to describe the 13 December 2011 as "the Ramsay/Truong correspondence"; it was a letter of Konstan Lawyers of which the Solicitor was the sole proprietor. It was not a letter of Mr Ramsay; he not being a legal practitioner; 2. There is no guidance in the issue that we are asked to determine as to what "observation" in the correspondence is being referred to. The letter contends that Mr Truong's costs and disbursements seemed excessive. It also contends that Mr Truong may have no entitlement to costs, and indicates that the Workers Compensation insurer had been notified of a claim by Mr Nguyen for lump sum entitlements pursuant to sections 66 and 67 of the Workers Compensation Legislation; 3. Even if one were to discern exactly what "observation" in the letter was being referred to, there is no evidence on which we could be comfortably satisfied of acquiescence by Mr Truong. The Solicitor concedes in his written submissions dated 14 February 2019 [8.21] that Mr Truong did not respond to the 13 December 2011 letter. 1. Given these findings, there can be no occasion of waiver of performance by the Solicitor of the Undertakings by reason of anything arising in the 13 December 2011 letter. D Professional Misconduct; alternatively unsatisfactory professional conduct (Issues requiring determination (18) and (19)) 1. Issue 18 seeks a determination as to whether, having regard to the Tribunal's findings made in respect of Grounds 1, 2, 3(a) and 3(b) of the Application, the Solicitor is guilty of professional misconduct in respect of any one or more of those Grounds. 2. Issue (19) is whether, in the alternative, the Solicitor is nevertheless guilty of unsatisfactory professional conduct in respect of any one or more of those Grounds. 3. The Application, as filed, asserts professional misconduct in respect of each of Grounds 1, 2, 3(a) and 3(b). The Application does not raise an alternate plea of unsatisfactory professional conduct in respect of any one or more of those Grounds. 4. The Law Society submits that the Solicitor's conduct constitutes professional misconduct; contending that viewed on an individual and collective basis the Solicitor's conduct in respect of each of the Grounds warrants such a finding. 5. Section 497 of the 2004 Act provides that for the purpose of the Act, professional misconduct includes: 1. Unsatisfactory professional conduct of an Australian legal practitioner, where the conduct involves a substantial or consistent failure to reach of maintain a reasonable standard of competence and diligence; and 2. Conduct of an Australian legal practitioner whether occurring in connection with the practice of law or occurring otherwise in the connection of law that would, if established, justify a finding that the practitioner is not a fit and proper person to engage in a legal practice. 1. Section 496 of the 2004 Act provides that unsatisfactory professional conduct includes: 1. 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. Section 498 of the Act sets out examples of conduct capable of being unsatisfactory professional conduct or professional misconduct and includes [Section 498(1)(a)] "conduct consisting of a contravention of this Act, the regulations or the legal profession rules." 2. In respect of Application Grounds 1 and 2, the observations in Law Society of New South Wales v Jones (Supreme Court of New South Wales – unreported 27 July 1978) (Jones) and Robb and Anor v Law Society of ACT [[1996] 72 FCR 225 (Robb) are relevant. 3. In Jones, Street CJ (with whom Reynolds and Samuels JJA concurred) said: "Reliability and integrity in the handling of trust funds are fundamental pre-requisites 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, invariably must put great faith and trust in the honesty of solicitors in the handling of monies on their behalf. The court must ensure that this trust is not misplaced." 1. In Robb, solicitors received settlement sums on behalf of their clients and paid those sums into a trust account. The solicitors had authority to deduct reasonable costs and disbursements. After monies for payment of costs and disbursements were transferred out of the trust account and into the firms office account there were then delays in paying counsel and third parties. The solicitors were subject to professional misconduct proceedings. Black J and Merkel J at 229 said: "… a course of conduct was engaged in that involved monies which had been held on behalf of client's being dealt with in a manner that was not in accordance with the instructions or directions of those clients. The trust and confidence reposed by clients and legal practitioners representing them is an essential element in relations between practitioner and client and the misconduct by the practitioners in the present case had the tendency to undermine that trust and confidence." 1. Clients of a legal practitioner can feel confidence in legal practitioners and their handling of their money only if they know that there is involved no element of judgment on the part of the practitioner, and that their money must remain in his/her trust account until it is disbursed in accordance with their direction. 2. We have found that the Solicitor had found no lawful basis upon which he could refuse to pay the trust monies to Toly in accordance with the 6 July direction; further, that in the circumstances there was a breach of the Solicitor's fiduciary obligation to account for the balance of the settlement monies in accordance with the client's direction, and a breach of s 255 of the 2004 Act. The failure to comply with the direction was, we find, unsatisfactory professional conduct as defined in s 496 in that it was conduct occurring in connection with the practice of law that fell 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. It was also, we find, conduct that involved a substantial failure to reach or maintain a reasonable standard of competence and diligence. It was professional misconduct. Our finding that the conduct demonstrates a failure of a substantial nature is based on the following: 1. The 6 July letter was a clear and unequivocal direction by persons on whose behalf the monies had been receipted into trust, to the solicitor, as to the disbursement of the trust monies; 2. There was - we have found - no lawful basis upon which the Solicitor could refuse to pay the trust monies to Toly in accordance with the 6 July direction; 3. We have found that, on the evidence and in the circumstances, there has been a failure to comply with a fiduciary obligation to account for trust monies as well as a breach of s 255 of the 2004 Act; 4. We find that the Solicitor's conduct in ignoring the July direction was deliberate; 5. It was open to the Solicitor after receipt of the 6 July 2012 direction to apply to a court of competent jurisdiction and obtain an order as to the disbursement of the trust monies if he was in any doubt as to the entitlement of Toly to the monies pursuant to the 6 July direction. The Solicitor did not take that course; 6. There is no evidence before us that would suggest any impediment to the Solicitor in bringing an action against Ilias - if he wished to do so - to seek recovery of the alleged personal debt, nor to take appropriate steps as permitted by the Act and the Regulations for the assessment of the various items of costs and disbursements that the Solicitor contends were owing to him by either Ilias or Toly or both. Again there is no evidence of such steps being taken; 7. This conduct was considered. We agree with the Law Society submission that it could not be characterised as careless; 8. The conduct has had the effect of depriving Toly of $33,000 for in excess of 4 years. 1. So far as the breach of undertaking Grounds are concerned, as stated earlier in these Reasons, we do not find Ground 3(b) established. We have found Ground 3(a) established. 2. The importance of practitioners complying with undertakings given cannot be understated. It is of considerable importance to the administration of justice, and in the conduct of affairs entrusted to practitioners, that practitioners can rely upon their colleagues to honour undertakings; further, that judicial officers can rely upon undertakings given to them. As the Court said in Coffini : "… [undertakings] will be enforced by the Court because legal practitioners are officers of the Court and because without enforcement undertakings would be worthless, persons and Courts would be unable to rely on the word of a legal practitioner and this aspect of legal practice, that demands compliance for legal efficacy, would collapse." 1. The Administrative Decisions Tribunal in the Law Society of New South Wales v Hinde [2005] NSWADT 199 at [41] said in professional disciplinary proceedings against a solicitor who had failed to honour an undertaking: "The failure of the practitioner to honour the undertaking promptly fits comfortably within these descriptions of professional misconduct and, indeed the practitioner has admitted that his conduct may be so described." 1. The undertakings given were - we have found - personal to the Solicitor and given in his professional capacity. A practitioner should ensure a full understanding of the obligations imposed upon himself or herself before providing an undertaking. 2. We agree with the Law Society's submission that the giving of an undertaking would be meaningless if the practitioner could avoid the obligations of an undertaking by saying either that it was given "in the name of the firm" and therefore did not attach to the practitioner personally, or that the practitioner relied upon an employed non legal staff member to comply with an undertaking. 3. The Law Society submits that the circumstances warrant a finding of professional misconduct in relation to Ground 3(a); contending that both s 497 of the 2004 Act is satisfied, and on the Allinson basis (Allinson v General Council of Medical Education and Registration [1894] 1 KB 750), that professional colleagues would regard the Solicitor's conduct to be disgraceful or dishonourable. It contends that the conduct ought properly be characterised as "substantial" (as that word is used in s 497(1)(a) of the Act) because it is critical to a solicitor's ability to practice law to understand, and to act upon, the personal obligations that arise once undertakings of the kind which are the subject of Ground 3 are given. 4. Whilst we view the Solicitor's failure to comply with Undertaking 1 to be serious, the particular circumstance of the giving of the undertaking and its failure to be honoured in our view more appropriately falls into the category of conduct occurring in connection with the practice of law that falls short of the standard of competence and diligence that members of the public are entitled to expect by a reasonably competent Australian legal practitioner. 5. We therefore find that in respect of Ground 3(a) the Solicitor is guilty of unsatisfactory professional conduct rather than professional misconduct. This for the following reasons: 1. We are not satisfied that the Solicitor wilfully refused to honour undertakings given; the more likely scenario being that once the Solicitor had signed the letter giving the undertakings he reasonably assumed that appropriate steps would be taken by Mr Ramsay to perform the functions of the undertakings referred to. Even though Mr Ramsay was not a legal practitioner, he was nevertheless an experienced law clerk who had been employed as managing clerk of the Solicitor's practice for a number of years and had been involved in the conduct of personal injury litigation under the Solicitor's supervision; 2. The failure by the Solicitor to fully appreciate the efficacy of the undertakings within the context of a Workers Compensation matter, and his subsequent failure to check so as to ensure that the undertakings had been complied with, falls more comfortably into the category - in the particular circumstances of this case - of conduct falling short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent practitioner. We stress that we reach this view on the particular circumstances of this case. A solicitor who failed to comply with an undertaking would usually be viewed as being involved in a substantial failure to reach a reasonable standard of competence and diligence. The position that we reach is not dissimilar, in terms of categorisation of the conduct as professional misconduct or unsatisfactory professional conduct, to that arrived at by the NSW Administrative Decisions Tribunal in Law Society of New South Wales v Waterhouse [2002] NSWADT 204 where a legal practitioner had failed to honour an undertaking. The members there said that although ordinarily they would expect noncompliance with solicitor's undertakings to be regarded as professional misconduct there were, in that matter, particular circumstances which put the conduct in the less serious category of unsatisfactory professional conduct. The members considered that the solicitor's primary error was not applying to the court for a release of the undertakings given. ORDERS 1. The Tribunal finds that the Respondent, Simon Konstantinidis, is guilty of professional misconduct in respect of Application Grounds 1 and 2; 2. The Tribunal finds that the Respondent, Simon Konstantinidis is guilty of unsatisfactory professional conduct in respect of Application Ground 3(a); 3. Application Ground 3(b) is dismissed; 4. The Registry is directed to list the matter for directions for the allocation of a Stage 2 Hearing. ********** 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 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: 03 July 2019