Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Council of the Law Society of New South Wales v Davidson [2019] NSWCATOD 105 Hearing dates: 29 November 2018 and 17 December 2018 Date of orders: 03 July 2019 Decision date: 03 July 2019 Jurisdiction: Occupational Division Before: S Westgarth, Deputy President N Matkovich, Senior Member B Thomson, General Member Decision: (1) The respondent is guilty of professional misconduct and of unsatisfactory professional conduct; and (2) These proceedings are stood over to be listed for directions and setting down the proceedings for a hearing to determine what disciplinary orders the Tribunal ought to make. Catchwords: Misappropriation – professional misconduct – unsatisfactory professional conduct Legislation Cited: Legal Profession Uniform General Rules 2015 Legal Profession Uniform Law (NSW) Cases Cited: Allinson v General Council of Medical Education and Registration [1894] 1 QB 750 Bolster v Law Society of New South Wales (unreported, NSWCA, 20 September 1982) Brereton v Legal Services Commissioner [2010] VSC 378 Briginshaw v Briginshaw (1938) 60 CLR 336 Council of the Law Society of New South Wales v Wehbe [2018] NSWCATOD 14 Council Of The Law Society Of The Act v Legal Practitioner RN [2016] ACAT 122 Johns v Law Society Of New South Wales [1982] 2 NSWLR 1 Jones v Dunkel 1959 101 CLR 298 Law Society of NSW v Shehadie [2016] NSWCATOD 46 Legal Services Commissioner v Brereton [2011] VSCA 241 Re Hodgekiss [1962] SR (NSW) 340 Texts Cited: Nil Category: Principal judgment Parties: Council of the Law Society of New South Wales (Applicant) Chona Encarnacion Castillo Davidson (Respondent) Representation: Counsel: M Kalyk (Respondent) Solicitors: L Pierotti (Applicant) Eakin McCaffrey Cox (Respondent) File Number(s): 2018/102777 Publication restriction: Unrestricted REASONS FOR DECISION Background 1. This is an application (the Application) for disciplinary findings and orders, in which the applicant seeks the following orders: (1) A recommending that the respondent lawyer's name be removed from the Roll; (2) The respondent lawyer to pay the costs of the Society as agreed or assessed; and (3) Such other orders as the Tribunal deems appropriate. 1. We shall refer to the Council of the Law Society of New South Wales as the Applicant and to the respondent as the Solicitor. 2. The Application alleges that the Solicitor is guilty of professional misconduct as set out below: (1) The Solicitor misappropriated trust funds; (2) The Solicitor wilfully breached s 147(2) of the Legal Profession Uniform Law (NSW) (Uniform law); (3) The Solicitor has breached s 370(2) of the Uniform law; (4) The Solicitor has breached s 388(2) of the Uniform law; (5) The Solicitor wilfully breached rr 45, 47 and 48 of the Legal Profession Uniform General Rules (the Rules); (6) The Solicitor has breached s 146 of the Uniform law; (7) The Solicitor has breached s 138 of the Uniform law; and (8) The Solicitor has breached s 148 of the Uniform law. 1. Particulars of the grounds of complaint are contained in the Application, but in the following paragraphs we summarise those particulars. Complaint 1 Complaint 1.1 – misappropriation of filing fees for Daniel matter 1. On 10 September 2015 an amount of $1,430.00 was credited to the Solicitor's personal account with the Commonwealth Bank of Australia (CBA) in respect of a client, D Daniel. This amount included $430.00 for court filing fees. The Solicitor did not deposit the $430.00 to the Solicitor's trust account pending payment of the filing fee. By 16 September 2015 the money in the personal account had been used to make payments that did not include payment of the filing fee. Complaint 1.2 – misappropriation of trust money held for Briones matter 1. The entirety of trust monies held in the trust account was held on behalf of the Briones estate. In or around 7 October 2015 the Solicitor drew a trust account cheque for $430.00 to pay court filing fees for the Daniel matter. The Solicitor attempted to conceal this misappropriation by account entries provided to the trust account investigator as follows: * The Solicitor claimed a disbursement of $430.00 in a bill issued on 10 September 2015 in the Briones matter, but did not include this sum in transfers recorded in the trust ledgers for the matter; * On 13 October 2015 an entry was made in the Solicitor's trust account cashbook/sheet misleadingly stating payment of the $430.00 disbursement was made in the Briones matter; * On 29 June 2016 the Solicitor refunded the $430.0 to the trust account and corrected the trust account cashbook/sheet. 1. The Solicitor misused the Briones monies to pay the court filing fees for another client. Such misuse amounts to misappropriation of trust money by the Solicitor. Complaint 1.3 – misappropriation of filing fees for Price/Tan matter 1. On 12 October 2015 an amount of $10,000.00 was credited to the Solicitor's personal account. It was paid in respect of a visa application in the Price/Tan matter and the amount included $6,865.00 for a filing fee to be paid to the Department of Immigration and Border Protection (DIBP). The Solicitor did not transfer the $10,000.00 to the trust account pending payment of the filing fees. On 29 October 2015 the Solicitor paid $1,051.23 to the DIBP for an extension of the client's visa using the Solicitor's credit card. The Solicitor requested reimbursement and the client paid $1,051.00 to the Solicitor's personal account. On 6 January 2016 the Solicitor paid the application to the DIBP with her credit card. From 30 September 2015 the monies held in the Solicitor's personal account fell below $6,865.00 and was for a period from 30 November 2015 overdrawn. The Solicitor misappropriated the $6,865.00 for payment/withdrawals/transfers that did not include payment of the DIBP visa application fee. Complaint 1.4 – misappropriation of trust money held for Briones matter 1. On 30 December 2015 (with the oral authority of the client's representative, Mrs Clarke) the Solicitor transferred from the trust account the sum of $6,000.00 held in the Briones matter to the Solicitor's office account for the purposes of paying future accounting fees and capital gains tax. Also on 30 December 2015 the Solicitor transferred $6,000.00 from the office account to the Solicitor's personal account. On 3 January 2016 the Solicitor transferred $6,950.00 from the personal account to the Solicitor's MasterCard account. The statements for the MasterCard account show that immediately prior to the transfer, the available credit was only $709.12, such that without the credit of $6,950.00, the subsequent payment of $6,939.14 to DIBP to pay for the visa in the Price/Tan matter could not have been made from the MasterCard account. The Solicitor misappropriated the bulk of the $6,000.00 which had been transferred from the office account to the personal account to support the payment of the visa application for the Price/Tan matter. The trust deficiency was purportedly rectified by the Solicitor paying cash of $5,000.00 to Mrs Clarke in May 2016. In October 2016 the Solicitor repaid $6,000.00 to the trust account. Complaint 1.5 – misappropriation of visa application filing fees for Enriquez matter 1. On 5 November 2015 an amount of $1,500.00 was credited to the Solicitor's personal account in respect of a visa application in respect of the Enriquez matter. This included $1,050.00 for the filing fee. The Solicitor did not transfer the $1,500.00 to the trust account pending payment of the visa application fee. By 30 November 2015 the credit balance in the personal account had been entirely used to make payments other than the filing fee. The Solicitor accordingly misappropriated the entire $1,050.00. Complaint 2 – breach of s 147(2) of the Uniform Law 1. This concerns a breach of s 147(2) of the Uniform Law. That section contains requirements for keeping trust accounts. On 17 February 2016 Mr Dunlop, Law Society inspector attended the Solicitor's practice to conduct his inspection (the First Inspection). This ground alleges that the Solicitor failed to maintain the law practice's accounts for the Briones matter in accordance with s 147 in that those records were, at the time of the First Inspection incomplete and not maintained in a way that enabled them to be conveniently and properly investigated. Further, the records provided to the trust account inspector in 29 June 2016 were irreconcilable and did not disclose the true position in relation to trust money held on behalf of the Briones matter. Complaint 3 Complaint 3.1 – failure to comply with s 370 at First Inspection 1. This concerns an alleged breach of s 370 of the Uniform Law which contains provisions requiring a law practice to give to an investigator, Mr Dunlop access to documents or provide information to the investigator. During the First Inspection, Mr Dunlop requested the Solicitor to print a copy of the transactions for her personal account but the Solicitor refused to provide access. Complaint 3.2 – failure to comply with s 370 Notice issued 7 June 2016 1. This complaint concerns an allegation that on 7 June 2016 the Solicitor was required by a s 370 Notice to provide various documents and that the Solicitor has failed to provide certain records and information required by the Notice. Complaint 3.3 – failure to comply with Notice issued 6 September 2016 1. This complaint alleges that on 6 September 2016 the Solicitor was given a Notice pursuant to s 370 requiring her to provide access to further documents and that the Solicitor has failed to provide copies of requested bank statements relating to credit card payments used to make payments of filing fees to the DIBP for the Rabino matter. Complaint 4 – provision of false and/or misleading documents and information to external examiner 1. This complaint asserts that the Solicitor has provided false and/or misleading documents and information to an external examiner, namely Mr Livermore. The particulars allege that: 1. the handwritten trust account ledger for the Briones matter described the transfer of $6,000.00 on 30 December 2015 as being for "Costs" but in the trust accounts payment cashbook the transfer was described as being for "Meeting with accountants and seeking advice on CGT, includes tax payment". It is alleged that the Solicitor knew or ought to have known that it was for the future payment of the accountant and capital gains tax; 2. the trust payments cashbook recorded the withdrawal of $430.00 on 13 October 2015 as being paid to Mrs Clarke for "transportation, cleaning, communication..." relating to the Briones matter, when the Solicitor knew or ought to have known that the withdrawal was for the payment of court filing fees in the Daniel matter; 3. an invoice dated 10 September 2015 for $17,430.00 in respect of the Briones matter included: "30 Sep payment for interstate and overseas transport and communications – paid to R Clarke $430.00" when the Solicitor knew or ought to have known that there was no such payment to Mrs Clarke and that the payment was for court filing fees in the Daniel matter; 4. the handwritten Briones trust ledger omitted the withdrawal of $430.00 when the Solicitor knew or ought to have known that it had been withdrawn from trust money held for the Briones matter; and 5. the Solicitor denied to Mr Livermore that she was previously aware of the trust deficiency of $430.00 that resulted from the payment of court filing fees in the Daniel matter from trust money held for the Briones matter when she knew or ought to have known of the deficiency. Complaint 5 – breach of rr 45, 47 and 48 of the Uniform Rules Complaint 5.1 – failure to maintain trust records 1. This complaint asserts that by the Solicitor's conduct in complaint 2 the Solicitor has failed to maintain the law practice trust accounts for the Briones matter in accordance with rr 45, 47 and 48 of the Uniform Rules in that the trust records were not up-to-date nor otherwise kept in accordance with the Uniform Rules. Complaint 6 – breach of s 146 of the Uniform Law Complaint 6.1 – intermixing money 1. As a result of the Solicitor's conduct in grounds 1.1., 1.3., and 1.5., namely the following deposits into the personal account: 1. 10/09/2015 - $1,430.00 ($430.00 court filing fee); 2. 12/10/2015 - $10,000.00 ($6,885.00 partner visa fee); and 3. 05/11/2015 - $1,500.00 ($1,050.00 visa fee), the Solicitor breached s 146 of the Uniform Law by intermixing trust money with other money. Complaints 7 and 8 – breaches of s 138 and 148 of the Uniform Law 1. As a result of the Solicitor's conduct in Grounds 1.2 and 1.4, the Solicitor breached s 138 of the Uniform Law by failing to hold trust money deposited in the trust account on behalf of the Briones matter exclusively for that client and disbursed monies held for that client without a direction by the client. Further, the Solicitor breached s 148 by causing a trust deficiency of $5,129.63 without reasonable excuse. Reply 1. The Solicitor has filed a Reply and in respect of the eight grounds (see paragraph 3 above) the Solicitor: 1. Denies Ground 1; 2. In relation to Ground 2, the Solicitor denies any wilful breach and otherwise admits the ground; 3. In relation to Ground 3, the Solicitor admits the ground in relation to particular 3.3 but says the breach was inadvertent and otherwise denies the ground; 4. In relation to Ground 4, the Solicitor denies any wilful breach and otherwise admits the ground; 5. Denies any wilful breach and otherwise admits Ground 5; 6. Admits Ground 6; 7. Admits Ground 7; and 8. Admits Ground 8. 1. In the Reply, the Solicitor has responded to the particulars summarised above. The following paragraphs summarise the Solicitor's Reply. Complaint 1 Complaint 1.1 – misappropriation of filing fees for Daniel matter 1. The Solicitor admits that the sum of $430.00 for filing fees was not paid into the trust account and says that she mistakenly did not appreciate that any of the funds were trust money. The Solicitor also states that the $430.00 filing fee was paid out of the office account around 7 October 2015 and that the personal account contained a facility that permitted credit to be drawn to a limit of $1,200.00. Complaint 1.2 – misappropriation of trust money held for Briones matter 1. The Solicitor admits that she drew a cheque from the trust account but says that the drawing of a cheque was a mistake as she did not realise that the cheque was for the trust account. The Solicitor denies the allegations concerning concealment and admits that the Briones monies were misapplied to pay the filing fee for another client. Complaint 1.3 – misappropriation of filing fees for Price/Tan matter 1. The Solicitor admits the receipt of $10,000.00 and that that amount was paid to her personal account. She says that she mistakenly did not appreciate that any of the funds were trust money. She also admits that from 30 September 2015 monies held in her personal account fell below $6,865.00 and from 30 November 2015 onwards the account was, at various times, overdrawn. The Solicitor admits that the entire $6,685.00 was misapplied for payment/withdrawals/transfers that did not include payment of the DIBP visa application fee. Complaint 1.4 – misappropriation of trust money held for Briones matter 1. The Solicitor admits the transfer of $6,000.00 held in the trust account to the Solicitor's personal account but says that was with the authority of Mrs R Clarke. She says that $5,000.00 of the funds were to be used for the purposes of paying accounting fees and capital gains tax and that she mistakenly did not appreciate that any of the funds were trust money. She also admits the transfer of $6,950.00 from the personal account to the Solicitor's MasterCard account. The Solicitor states that in May 2016, on Mrs Clarke's instructions, she paid $5,000.00 cash to Mrs Clarke. The Solicitor admits misapplying $5,129.63 but denies misappropriation. She also says that when Mr Dunlop raised with her his concerns about the $6,000.00, she shortly thereafter (in October 2016) retrieved the sum of $5,000.00 cash paid to Mrs Clarke and paid $6,000.00 into the trust account. Complaint 1.5 – misappropriation of visa application filing fees for Enriquez matter 1. The Solicitor admits the receipt of $1,500.00 which was credited to her personal account and says that she mistakenly did not appreciate that any of the funds were trust money. The Solicitor admits the misapplication of funds held in her personal account but denies misappropriation. She says that on 8 June 2016 she paid the filing fee. Complaint 2 – breach of s 147(2) of the Uniform Law Complaint 2.1 – failure to keep trust account records 1. The Solicitor admits that her trust account records were not complete and that she provided Mr Dunlop with trust account bank statements, trust account receipts cashbook and trust account receipts of payments. She admits failure to maintain law practice trust records for the Briones matter in accordance with s 147 but says that she did not wilfully breach her obligations. Complaint 3 Complaint 3.1 – failure to comply with s 370 at First Inspection 1. The Solicitor denies Mr Dunlop required her to produce her personal account and denies that documents were reasonably required by Mr Dunlop under s 370(1). She further states that she believed Mr Dunlop did not have power to inspect her personal account. She states that she provided Mr Dunlop with access to her personal account on her personal computer and admits she did not provide hard copies of the statements of the personal account. Complaint 3.2 – failure to comply with s 370 Notice issued 7 June 2016 1. The Solicitor admits she was given the s 370 Notice and denies that she failed to provide certain records. Complaint 3.3 – failure to comply with Notice issued 6 September 2016 1. The Solicitor states that she provided some records as requested but admits other documents were not provided. She says that any failure to provide information or documents was inadvertent. Complaint 4 – provision of false and/or misleading documents and information to external examiner 1. The Solicitor denies the allegation of misleading Mr Livermore. Complaint 5 – breach of rr 45, 47 and 48 of the Uniform Rules 1. The Solicitor denies that any breach was wilful and otherwise in substance admits this complaint. Complaint 6 – breach of s 146 of the Uniform Rule 1. In substance, the Solicitor admits this complaint but, relies on her explanations described earlier. Complaints 7 and 8 – breaches of s 138 and 148 of the Uniform Law 1. In substance, the Solicitor admits this complaint. The Course of the Proceedings 1. The application was heard on 29 November 2018 and 17 December 2018 and directions were made for the parties to make submissions in writing after the hearing. 2. The Tribunal has had regard to: 1. The Applicant's submissions filed in October 2018; 2. The Solicitor's opening submissions filed in October 2018; 3. The Applicant's further submissions filed 8 February 2019; 4. The Solicitor's closing submissions filed 15 March 2019; and 5. The Applicant's submissions in reply filed 29 March 2019. Legislation 1. In order to assist in the understanding of this decision, we set out below the text of the sections of the Uniform Law and Rules relevant to this decision: 1. Section 129: 129 Meaning of trust money (1) For the purposes of this Law, trust money is money entrusted to a law practice in the course of or in connection with the provision of legal services by the law practice, and includes— (a) money received by the law practice on account of legal costs in advance of providing the services; and (b) controlled money received by the law practice; and (c) transit money received by the law practice; and (d) money received by the law practice, that is the subject of a power exercisable by the law practice or an associate of the law practice, to deal with the money for or on behalf of another person. 1. Section 138: 138 Holding, disbursing and accounting for trust money in general trust account (1) Except as otherwise provided in this Part, a law practice must— (a) hold trust money deposited in the law practice's general trust account exclusively for the person on whose behalf it is received; and (b) disburse the trust money only in accordance with a direction given by the person. Civil penalty: 50 penalty units. (2) Subsection (1) applies subject to an order of a court of competent jurisdiction or as authorised by law. (3) The law practice must account for the trust money as required by the Uniform Rules. Civil penalty: 50 penalty units. Note Jurisdictional legislation may provide for disbursement for the purpose of statutory deposit accounts. 1. Section 146: 146 Intermixing money A law practice must not mix trust money with other money unless authorised to do so by the designated local regulatory authority, and only in accordance with any conditions the designated local regulatory authority imposes in relation to that authorisation. Civil penalty: 50 penalty units. 1. Section 147(2) 147 Keeping trust records (2) The law practice must keep the trust records— (a) in accordance with the Uniform Rules; and (b) in a way that at all times discloses the true position in relation to trust money received for or on behalf of any person; and (c) in a way that enables the trust records to be conveniently and properly investigated or externally examined; and (d) for a period of 7 years after the last transaction entry in the trust record, or the finalisation of the matter to which the trust record relates, whichever is the later. Civil penalty: 50 penalty units. 1. Section 148: 148 Deficiency in trust account A law practice, an Australian legal practitioner or any other person must not, without reasonable excuse, cause— (a) a deficiency in any trust account or trust ledger account; or (b) a failure to pay or deliver any trust money. Penalty: 500 penalty units or imprisonment for 5 years, or both. 1. Section 370: 370 Requirements—trust records examinations, trust records investigations and compliance audits (1) For the purpose of carrying out a trust records examination, trust records investigation or compliance audit in relation to a law practice, an investigator may, on production of evidence of his or her appointment for inspection, require the law practice or any person who has or had control of documents relating to the affairs of the law practice to give the investigator either or both of the following— (a) access to the documents relating to the affairs of the law practice the investigator reasonably requires; (b) information relating to the affairs of the law practice the investigator reasonably requires (verified by statutory declaration if the requirement so states). (2) A person who is subject to a requirement under subsection (1) must comply with the requirement. Civil penalty: 50 penalty units. Note Section 466 contains provisions relating to compliance with this section. 1. Rules 45, 47 and 48 of the Legal Profession Uniform General Rules 2015 (the Rules): 45 Trust account payments cash book (1) A law practice that maintains a general trust account must keep a trust account payments cash book in which the following particulars are recorded in respect of each payment of trust money: (a) the date and number of the cheque or electronic funds transfer, (b) the amount ordered to be paid by the cheque or the amount transferred, (c) in the case of a cheque, the name of the person to whom the payment is to be made or, if the cheque is made payable to an ADI, the name or BSB number of the ADI and the name of the person receiving the benefit of the payment, (d) in the case of an electronic funds transfer: (i) the name and number of the account to which the amount was transferred and the relevant BSB number, and (ii) the name of the person to whom the payment was made or, in the case of a payment to an ADI, the name or BSB number of the ADI and the name of the person receiving the benefit of the payment, (e) details clearly identifying the name of the person on whose behalf the payment was made, the matter description and the appropriate ledger reference, (f) particulars sufficient to identify the reason for payment. (2) The particulars in respect of payments must be recorded: (a) in the order in which the payments are made, and (b) within 5 working days of the day the payment was made. 47 Recording transactions in trust ledger accounts (1) A law practice that maintains a general trust account must keep a trust account ledger containing separate trust ledger accounts in relation to each person in each matter for which trust money has been received by the practice. (2) The following particulars must be recorded, and kept up to date, in the title of a trust ledger account: (a) the name of the person for or on behalf of whom the trust money was paid, (b) the person's address, (c) particulars sufficient to identify the matter in relation to which the trust money was received. (3) The following particulars must be recorded for each transaction in the trust ledger account: (a) the date of the transaction, (b) the appropriate reference number and transaction type, (c) particulars sufficient to identify the reason for the transaction, (d) the amount of money in the transaction, (e) if the transaction type is: (i) a receipt—the provider of the amount and the date the amount was received if that date is different from the date of receipt, (ii) a payment by cheque—the payee or, in the case of a cheque made payable to an ADI, the name or BSB number of the ADI and the name of the person receiving the benefit of the payment, (iii) a payment by electronic funds transfer—the account name and number and the relevant BSB number of the ADI and the name of the person receiving the benefit of the payment, (iv) a journal entry—the appropriate ledger reference, the name of the person on whose behalf the transfer was made and the matter description. (4) Transactions relating to trust money must be recorded in the trust ledger account: (a) in the order in which the transactions occur, and (b) within 5 working days of the day the receipt was made out, the payment was made or the transfer was effected, as the case requires. (5) The trust ledger account balance is to be recorded in the trust ledger account after each receipt, payment or transfer of trust money. 48 Reconciliation of trust records (1) A law practice that maintains one or more general trust accounts must reconcile the trust records relating to each account. (2) The trust records relating to a general trust account are to be reconciled as at the end of each named month by preparing: (a) a statement: (i) reconciling the general trust account balance as shown in ADI records with the balance of the practice's trust account cash books, and (ii) showing the date the statement was prepared, and (b) a statement: (i) reconciling the balance of the trust ledger accounts with the balance of the practice's trust account cash books, and (ii) containing a list of the practice's trust ledger accounts showing the name, identifying reference and balance of each and a short description of the matter to which each relates, and (iii) showing the date the statement was prepared. (3) The statements must be prepared within 15 working days after the end of the month concerned. (4) The statements must be kept by the law practice. 1. It is also relevant to record the definitions (which we note are inclusive definitions) of unsatisfactory professional conduct and professional misconduct in the Uniform Law. The relevant ss are 296 and 297 which provide: 296 Unsatisfactory professional conduct For the purposes of this Law, unsatisfactory professional conduct includes conduct of a lawyer 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 lawyer. 297 Professional misconduct (1) For the purposes of this Law, professional misconduct includes— (a) unsatisfactory professional conduct of a lawyer, where the conduct involves a substantial or consistent failure to reach or maintain a reasonable standard of competence and diligence; and (b) conduct of a lawyer whether occurring in connection with the practice of law or occurring otherwise than in connection with the practice of law that would, if established, justify a finding that the lawyer is not a fit and proper person to engage in legal practice. (2) For the purpose of deciding whether a lawyer is or is not a fit and proper person to engage in legal practice as referred to in subsection (1)(b), regard may be had to the matters that would be considered if the lawyer were an applicant for admission to the Australian legal profession or for the grant or renewal of an Australian practising certificate and any other relevant matters. Applicant's Evidence 1. In support of the Application, the Applicant tendered and relied upon the following affidavits: 1. Affidavit of Anne-Marie Foord dated 29 March 2018 – Exhibit A; and 2. Affidavit of R F Dunlop dated 11 April 2018 – Exhibit B; 1. Counsel for the Solicitor raised a number of objections (some of which were contained in a document handed up marked "Respondent's Objections to Evidence" listing 22 objections). Rulings were made in respect of each objection. Neither of the deponents were required for cross examination. The Solicitor's Evidence 1. The Solicitor tendered and relied upon the following: 1. Letter from the Law Society dated 23 August 2018 – Exhibit 1; 2. Letter from the Eakin McCaffery Cox dated 13 September 2018 – Exhibit 2; 3. Affidavit of the Solicitor dated 18 July 2018 – Exhibit 3; 4. Affidavit of P Davidson dated 18 July 2018 – Exhibit 4; and 5. Affidavit of the Solicitor dated 17 December 2018 – Exhibit 5. The Applicant's Opening (pre-hearing) Submissions 1. The Applicant notes that the Solicitor admits Grounds 6, 7 and 8 and in respect of Grounds 2, 4 and 5, admits the grounds but says it was not wilful. 2. The following is a summary of the Applicant's written submissions provided in October 2018 prior to the hearing concerning Grounds 3 and 1. Ground 3 1. Ground 3 concerns an alleged breach of s 370 of the Uniform Law on three separate instances. The first instance arose at the time of the first trust account inspection on 17 February 2016. The second is in respect of a notice issued on 7 June 2016 and the third in respect of a notice issued on 6 September 2016. The Solicitor admits the third breach (but says it was inadvertent) and denies the first and second breaches. 2. In respect of the first instance, the evidence of Mr Dunlop is that the Solicitor failed to comply with his requests. In respect of the second instance the evidence of Mr Dunlop is that documents set out in schedule A of his report of 4 November 2016 were not provided and/or were incomplete. 3. Section 370 of the Uniform Law authorised Mr Dunlop to request documents reasonably required for the purposes of carrying out his examinations. The law requires the Solicitor to comply. Ground 1 1. Ground 1 alleges misappropriation on the part of the Solicitor. Whilst the Solicitor admits certain facts, she denies that she misappropriated any of the funds concerned. The Applicant makes the following submissions: 1. The ordinary meaning of "misappropriate" is to "appropriate to wrong uses": see Brereton v Legal Services Commissioner [2010] VSC 378. In that case, the Court said that what must be established is that the person subjectively intended to do the acts which are said to be objectively dishonest by the ordinary standards of reasonable and honest people [53]. The Applicant submitted that on an objective view of the Solicitor's conduct, the Tribunal will be satisfied that the Solicitor's conduct was both deliberate and calculated to make use of trust funds. On any view, it was a dishonest use of the funds in question; 2. The Solicitor must have known the nature of her conduct and, it must follow, its consequence. If it is said that the Solicitor lacked this fundamental knowledge, then the words of Moffit P in Bolster v Law Society of New South Wales (unreported, NSWCA, 20 September 1982) become applicable: The more his case based on claims of ignorance is pressed in defence of him, as it has been in respect of the period up to 1979 and to some degree thereafter, to the point where the ignorance is of the elementary but critically important obligations of a solicitor and person in a position of trust in relation to his clients, the more his case establishes that he has such a lack of appreciation of his duty as a solicitor that he is unfit to be such... in so far as his case cannot be pressed that far so he did have the understanding of these elementary matters that one would expect a solicitor, particularly one of thirty years standing, then he is left in a position that he must have knowingly disregarded the standards in order to serve his own financial interests by large sums of money of his clients being made available for his ventures, by such moneys being advanced to the finance company and then by it to him, his family and his companies without security at either step so that he as a borrower had a reservoir of money without being put to the expense of meeting the cost of providing proper securities or having the inconvenience and restriction of securities upon his assets or affairs. 1. In Bolster Moffit P also stated that a solicitor cannot justify failure to perform his duty to his clients, including that not to intermingle his affairs with theirs, by claiming that he was ignorant of elementary principles. The fact that the solicitor did not act fraudulently or that his clients did not lose money does not prevent the solicitor of being found guilty of professional misconduct; and 2. The Applicant relied upon the common law concept of professional misconduct which includes conduct in pursuit of professional activities which would be reasonably regarded as disgraceful and dishonourable by professional colleagues of good repute and competency (see Allinson v General Council of Medical Education and Registration [1894] 1 QB 750). The Applicant submitted that on any view, the Solicitor's conduct amounts to professional misconduct. The Applicant's Closing (Post Hearing) Submissions 1. The following paragraphs summarise the Applicant's closing submissions. Daniel/Briones Matters 1. The Solicitor received $1,430.00 in respect of the Daniel matter and ought to have deposited the sum of at least $430.00 into the Solicitor's trust account as it had been earmarked for filing fees. The sum of $1,430.00 was paid into the Solicitor's personal bank account and was used for purposes other than the payment of filing fees. Subsequently, the Solicitor withdrew trust funds, standing to the credit of the Briones matter (in the sum of $430.00) for the filing fees in the Daniel matter. At the time of that payment, there was no other money in the trust account. The Solicitor gave evidence that she had thought that she was making payment of the filing fee from her office account and not from the trust account. 2. The Solicitor gave evidence that the $430.00 billed in the Briones matter was not the same money as was paid for the filing fees in the Daniel matter. The amount of $430.00 billed to the Briones matter was described as a payment made to Mrs R Clarke. However, there was no evidence that the Solicitor actually paid $430.00 to Mrs R Clarke. The Solicitor gave evidence that the description in the trust accounts payment cash book to the effect that Mrs Clarke was paid for cleaning and transportation expenses was a mistake. The Solicitor denied that she deliberately took trust money held in the Briones matter to pay the filing fee payable for the Daniel matter. The Applicant submitted that the Solicitor's explanation is not plausible; Price/Tan Matter 1. This concerns the receipt of $10,000.00 by the Solicitor from a Ms Price. The amount was to cover filing fees ($6,865.00) and the balance for professional fees. The amount received was paid into the Solicitor's personal account. From October 2015 (when the sum of $10,000.00 was received) to January 2016 (when the Solicitor used her credit card to pay the fee of $6,865.00 plus credit card charges), the Solicitor's personal account fell below $6,865.00 and for a period, from 30 November 2016 [2015] onwards, the account was at various times overdrawn. These facts are admitted by the Solicitor who states in her Reply that she did not appreciate that the funds were trust money. The Solicitor's evidence included the admission that the client's money was taken for the Solicitor's personal use. Briones – further misappropriation 1. The Applicant alleges that the Solicitor withdrew $6,000.00 held in the trust account for the beneficiaries of an estate, transferred that sum to her office account and thereafter transferred almost all of that sum to her credit card account. Some months later, the funds were repaid to the trust account. 2. The Applicant submitted that the evidence shows that the Solicitor's explanation for the withdrawal of the funds defies credibility. The Solicitor's evidence was that Mrs Clarke gave her authority to withdraw $6,000.00 to pay accountants fees and prospective capital gains tax. The Solicitor gave evidence that she transferred the money from trust to her office account because she thought that money withdrawn from the trust account had to be put into the office account. The Solicitor's evidence was that although there was no accountant's bill to pay and no CGT assessed, Mrs Clarke was going overseas and she wanted the Solicitor to have access to the money. 3. The Applicant's submission was that the Solicitor's explanation fails to address the fact that the Solicitor could have withdrawn the funds from the trust account notwithstanding Mrs Clarke's absence. The explanation also fails to address the fact that there were no accountant's fees or tax to pay. There was no reason to withdraw the funds. 4. The Applicant submitted that the money was not used for the purpose Mrs Clarke intended. The evidence was that the monies received through Mrs Clarke were used to pay the Price/Tan visa application fees. The Solicitor agreed. The funds were only repaid after the intervention of Mr Dunlop and Mr Livermore in October 2016. Enriquez Matter 1. The Applicant submitted that the Solicitor received $1,500.00 for a visa application from Abbie Enriquez and misappropriated that sum. The amount was paid to the Solicitor's personal account and prior to payment of the visa application on 8 June 2016 the entirety of the funds had been used for purposes other than the payment of the visa. The Solicitor agreed in cross examination that the funds had been used for her own purposes. She suggested that she was not sure whether she had authority to do so. The Applicant submitted that it cannot be accepted that any client authority would permit the Solicitor to deal with trust funds as she had done. Education – Handling of Trust Funds 1. The Applicant submitted that the Solicitor's evidence revealed a complete failure to understand her responsibilities towards client trust funds. The Solicitor gave evidence to the effect that money received for filing fees in respect of immigration matters could be deposited to her credit card account or her personal account because the immigration authority required payment by way of credit card. The Solicitor gave evidence that she thought that when money was removed from the trust account, it was no longer trust money. She acknowledged that that was a "misconception that I had at that time". 2. The Applicant submitted that it is open to the Tribunal to find that the evidence discloses that the Solicitor knowingly used trust funds of various clients for purposes other than their matter, indeed for her own purposes. The Solicitor gave evidence that it was her understanding that it was permissible to put trust money into her personal account if the client instructed that to happen. The Applicant submitted that the evidence is sufficient to enable the Tribunal to find that the Solicitor lacked the most fundamental knowledge of her obligations as a solicitor and that she deliberately determined to use trust funds in question for her own purposes. Complaint 2 - Failure to Keep Trust Account Records 1. The Applicant submitted that the Solicitor failed to properly keep trust account records. In her Reply, the Solicitor admits certain of the particulars. Complaint 3 - Breach of Section 370(2) of the Uniform Law 1. The Applicant submitted that the Solicitor failed to comply with three separate statutory requirements. The Solicitor's Reply makes a number of concessions and denials. 2. On 17 February 2016, Mr Dunlop attended the Solicitor's law practice to conduct an inspection (the First Inspection). The Solicitor denies that the inspector "required" her to produce certain documents and denies that certain documents were "reasonably required". The Solicitor submitted in the Reply that Mr Dunlop did not have the power to inspect certain documents. 3. In respect of the notice given pursuant to s 370 of the Uniform Law on 7 June 2016, the Solicitor says that the claim has not been properly particularised. The Applicant submits that the Solicitor says in relation to the notice of 6 September 2016 that she did provide some material and what was not provided was "inadvertent". 4. The Applicant referred to evidence concerning the provision of documents requested by the Applicant to be provided to Mr Dunlop and made the following submissions. 5. In respect of Complaint 3.1 (failure to comply with s 370 at the First Inspection), Mr Dunlop requested the Solicitor to print a copy of transactions appearing on the online bank statements for the Solicitor's personal account. The Solicitor refused. In her Reply, the Solicitor denied that Mr Dunlop "required" her to produce her personal account. She denied that the documents were "reasonably required" by Mr Dunlop under s 370 because she indicated that she did not understand Mr Dunlop to have the right to inspect personal bank statements and wanted the opportunity to obtain legal advice before producing documents. There was no risk of such documents being concealed in the meantime. She also states that she provided Mr Dunlop with access to her personal account on her personal computer but admits she did not provide hard copies. 6. In respect of Complaint 3.2 (failure to comply with the s 370 dated 7 June 2016), the Applicant submits that some documents were provided and others were not. The Applicant also submits that the evidence of the Solicitor was at times contradictory. The Applicant cited the Solicitor's evidence that trust bank statements were not copied because of ink and paper restrictions with her printer and other evidence to the effect that such statements were provided (Exhibit 5). 7. In respect of Complaint 3.3 (failure to comply with the notice of 6 September 2016), the Applicant says that documents would have been available to the Solicitor but were not produced because of ink and paper issues (according to the Solicitor's evidence). In the Reply, the Solicitor stated that the failure to provide documents was inadvertent. The Applicant says that the Solicitor's evidence was inconsistent. Complaint 4 1. In respect of Complaint 4, the Applicant amended this ground deleting reference to s 388 of the Uniform Law so that, following that deletion, this ground alleged that the Solicitor provided false and/or misleading documents and information to an external examiner (Mr Livermore). That information is listed in paragraphs 38(a) to (e) of the particulars forming part of the Application. In the Solicitor's Reply, the Solicitor admitted that she provided to Mr Livermore the documents particularised by the Applicant, but otherwise denied the allegation. In particular, the Solicitor stated that it was she who identified that the $430.00 entry was incorrect. The Applicant submitted that the Solicitor's evidence given in cross examination demonstrated that she was prepared to concede that the information was incorrect. She agreed the documents (a) to (e) were incorrect. But in relation to some documents, her evidence was that she did not know them to be incorrect. 2. The Applicant submitted that the Solicitor was evasive and that she attempted to avoid the clear fact that she had produced documents to Mr Livermore which she knew to be incorrect. The Solicitor would have the Tribunal accept that even though the documents themselves stated something which was not true, the fact that the Solicitor believed that the funds ($6,000.00 in the case of the Briones estate matter) would be used for the stated purpose somehow made her conduct acceptable, although the funds had been appropriated some six months earlier. 3. The Applicant submitted that the Solicitor lacks the most vital and fundamental understanding or is presenting a reconstructed version of events in order to reconcile her position. Her answers in cross examination reflect very poorly on her and her veracity and candour. In short, she produced documents to Mr Livermore which she must have known were in their form false and misleading. Complaint 5 – Maintenance of Trust Accounts 1. This complaint relates to the obligations under rr 45, 47 and 48 of the Rules to maintain trust account records. In the Solicitor's Reply, she admits the allegation but denies that the breach was wilful. The Applicant submitted that if the breach was not wilful, then the Tribunal would accept that the Solicitor's maintenance of the trust account records was in such a manner that it exhibited reckless carelessness of the kind to which his Honour Hardie J referred to in Re Hodgekiss [1962] SR (NSW) 340 when looking at the meaning of wilful (at 352 – 353). Breach of Section 146 of the Uniform Law – Complaint 6 1. The Applicant submitted that the Solicitor intermixed funds by depositing trust funds into her personal account. In substance, the Solicitor concedes this complaint, albeit providing some mitigating factors. Breach of Section 138 and 148 of the Uniform Law – Complaints 7 and 8 1. The Applicant alleges that the Solicitor distributed trust money without authority and caused trust account deficiency. The Reply [42] is ambiguous. The Solicitor's evidence demonstrates a lack of the most basic understanding of her responsibilities as a legal practitioner when dealing with trust funds. Seriousness of Allegations 1. The Solicitor was asked questions about the alleged conduct in general. The Solicitor was asked whether the position that she had taken throughout the proceedings was mistaken and unsustainable on the evidence before the Tribunal. She agreed. Conclusion 1. The Applicant submitted that the Tribunal would conclude that the Solicitor's proven misconduct evidences a complete and deliberate dereliction of her fundamental responsibilities as a legal practitioner. What she did was plain and simple – she took advantage, to her own benefit, of the trust which had been reposed in her by her clients. The Applicant relies upon Law Society of NSW v Shehadie [2016] NSWCATOD 46 at [37]. There the court referred to the need to draw a clear distinction between the understanding of the defendant when engaging in the conduct and the characterisation of that understanding. Commonly, the issue will be whether the proven state of understanding can fairly and properly be found to be dishonest. In making that finding of fact, the tribunal will look at the totality of the evidence and apply the standards of the community to what has been put to it by the defendant in that regard. 2. The Applicant submitted that on any objective test, the Solicitor's conduct amounts to professional misconduct. Solicitor's Opening Submissions 1. The following is a summary of the Solicitor's submissions filed in October 2018 prior to the hearing: 1. Ground 1: the Solicitor characterises the Applicant's pleadings as a case of misapplication (or non-dishonest misappropriation) against the Solicitor. To that extent, with the exception of Ground 1.1 the Solicitor admits such conduct and admits that such conduct amounts to professional misconduct; 2. The Solicitor denies Ground 1.1 on the basis that the funds were at all times available to be paid out of the practitioners account. This concerns the $430.00 for filing fees concerning the Daniel matter. In respect of Grounds 1.2 to 1.5 the Solicitor admits that such conduct taken together amounts to unsatisfactory professional conduct; 3. To the extent that the Applicant seeks to press any case of dishonest misappropriation, such a case is impermissibly outside the pleadings and must be rejected. The Applicant has not pleaded, or particularised in opening, any facts that would establish dishonesty in line with the principles set out in the authorities; 4. Ground 2: this ground concerns an alleged failure to properly keep trust account records contrary to s 147(2) of the Uniform Law. The Applicant's particulars in relation to the Briones matter allege: 1. a failure to maintain a trust account ledger, trust receipts, cash book, trust banking reconciliation statements and trust trial balances at the time of the inspection by Mr Dunlop in February 2016; and 2. a failure to maintain documents that clearly reflected the treatment of the $6,000.00 transfer and the $430.00 payment at the time of the inspection of Mr Livermore in June 2016. The Solicitor admits Ground 2 and admits that the conduct in (a) amounts to unsatisfactory professional conduct. The Solicitor says the conduct in (b) does not amount to unsatisfactory professional conduct or professional misconduct; 1. Ground 3: this ground contends that there has been: 1. a failure to produce the Solicitor's personal bank statements to Mr Dunlop during his inspection in February 2017 (3.1); and 2. a failure to provide certain records and information (3.2); and 3. a failure to provide a number of documents related to the Rabino matter (3.3). The Solicitor denies Grounds 3.1 and 3.2. The Solicitor submitted in respect of 3.1 that she was under no obligation to comply with s 370(1) in circumstances where the investigator did not "reasonably require" the pleaded documents. In respect of Ground 3.3 the Solicitor admits the ground but contends that the pleaded conduct does not amount to unsatisfactory misconduct or professional misconduct. In respect of 3.2 the Solicitor says that the Applicant has not pleaded any breach; 1. Ground 4: this ground was modified at the hearing. We will record the Solicitor's closing submissions only (see later); 2. Ground 5: this ground contends that there has been a failure to maintain trust records in the Briones matter in accordance with rr 45, 47 and 48 of the Rules. The Solicitor admits Ground 5 and admits that the conduct amounts to unsatisfactory professional conduct; 3. Ground 6: this ground contends that the Solicitor breached s 146 of the Uniform Law by intermixing with her own funds, funds properly classified as trust money. The trust money concerned is the $430.00 filing fee concerning the Daniel matter, the $6,865.00 filing fee in respect of the Price/Tan matter and the $1050.00 filing fee in respect of the Enriquez matter. The Solicitor admits Ground 6 and admits that the conduct amounts to unsatisfactory professional conduct; and 4. Grounds 7 and 8: Ground 7 contends that the practitioner breached s 138 of the Uniform Law (by failing to hold trust funds in relation to the Briones matter exclusively for that person and disburse those funds only in accordance with the direction) and s 148 of the Uniform Law (causing a deficiency in a trust account without reasonable excuse). This contention relates to the drawing of a cheque for $430.00 for the Daniel matter out of the Briones trust funds and the withdrawal of $6,000.00 from the Briones trust fund. The Solicitor admits Grounds 7 and 8 insofar as the $430.00 is concerned. The Solicitor contends that the conduct does not amount to unsatisfactory professional conduct or professional misconduct. The Solicitor denies Grounds 7 and 8 insofar as the withdrawal of $6,000.00 is concerned. The Solicitor contends that the funds were withdrawn on the direction of the client. 1. For the reasons set out above, the Solicitor contends: 1. Ground 1 should be found insofar as it concerns misapplication (or non-dishonest misappropriation) in relation to Ground 1.2 to 1.5 and found to be professional misconduct under s 297(1)(a) of the Uniform Law, but otherwise dismissed; 2. Ground 2 should be found insofar as it concerns an unintentional breach of s 147(2) of the Uniform Law, but otherwise dismissed; 3. Ground 3 should be found insofar as it concerns an unintentional breach of s 370(2) in relation to Ground 3.1 but otherwise dismissed; 4. Ground 5 should be found insofar as it concerns an unintentional breach of rr 45, 47 and 48 of the Uniform Rules and found to be unsatisfactory professional conduct but otherwise dismissed; 5. Ground 6 should be found insofar as it concerns an unintentional breach of s 146 of the Uniform Law and found to be unsatisfactory professional conduct but otherwise dismissed; 6. Ground 7 should be found insofar as it concerns an unintentional breach of s 138 of the Uniform Law but otherwise dismissed; and 7. Ground 8 should be found insofar as it concerns an unintentional breach of s 148 of the Uniform Law but otherwise dismissed. Solicitor's Closing (Post Hearing) Submissions 1. The following is a summary of the Solicitor's closing submissions: 1. From the outset of the proceedings, the Solicitor has accepted that there are a number of breaches that amount to either unsatisfactory professional conduct or professional misconduct. The Solicitor accepts that the obligations breached, concern trust funds which are of fundamental importance to a practitioner's obligation. Nevertheless, the balance of the contentions are not established on the evidence. Most importantly, the Applicant cannot establish that the Solicitor acted dishonestly; 2. The case must be decided on the pleadings. The authorities are clear in stating that pleadings in a disciplinary matter must be construed strictly on the basis that a practitioner must be "made aware precisely what is put against him" (Johns v Law Society Of New South Wales [1982] 2 NSWLR 1 at [6]). The Applicant's closing submissions make allegations but the Tribunal must decide the case not on the basis of the Applicant's submissions but on the basis of the Applicant's pleaded and particularised case; 3. The onus is on the Applicant to the standard described in Briginshaw v Briginshaw (1938) 60 CLR 336; 4. In the present case, Jones v Dunkel 1959 101 CLR 298, inferences should properly be drawn against the Applicant in respect of the following witnesses who could have given relevant evidence but were not called by the Applicant: 1. The Society's independent examiner, Mr Livermore; 2. The recipient of the documents provided by the Solicitor to the Society, Mr Sivakumar; 3. The representative of the Briones beneficiaries, Mrs Clarke; and 4. The balance of the Solicitor's clients. 1. In respect of Mrs Clarke, it is correct to say she informed Mr Dunlop that she was not prepared to sign a statement or to give evidence in the Tribunal. Nevertheless, she was clearly willing to speak with Mr Dunlop and there is no evidence that Mr Dunlop considered that she would not be a witness of truth. She could have been subpoenaed to attend and there has been no explanation for why that step was not taken; 2. The Solicitor has demonstrated herself to be a witness of credit who was willing to accept responsibility for her actions. She provided a detailed explanation for the conduct by way of a letter to the Law Society on 9 December 2016. At the hearing, she demonstrated herself to be a thoughtful witness who was willing to concede matters that were against her interests. For example, in respect of the misappropriation charge, the Solicitor continually accepted that she had used the funds for her own purposes. In respect of the trust accounting breaches, she continually accepted that her practices were not adequate and her records were not complete. In respect of her record keeping, she at times accepted that there were incorrect entries and that some mistakes she made were properly characterised as "substantial" mistakes; 3. The Applicant has not been able to establish that the Solicitor provided inconsistent evidence. Even if there were inconsistencies, no such inconsistencies were ever put to the Solicitor in cross examination; and 4. The Applicant does not present a fair understanding of the Solicitor's evidence. 1. The following is a summary of the Solicitor's closing submissions in respect of each of the grounds. Ground 1 1. The Solicitor submitted that Ground 1 must fail for two reasons. The first is that the Applicant has not pleaded and particularised a case of dishonest misappropriation. In the alternative, the Applicant has not established any case of dishonest misappropriation on the evidence. The Solicitor contends that the Applicant has pleaded, and outlined in opening, only a case of misapplication (or non-dishonest misappropriation) against the Solicitor. The Solicitor contends that it is fundamental that, to the extent that dishonest misappropriation is sought to be alleged, the Applicant should identify the particular state of mind relied upon. It is necessary for the Applicant to identify the knowledge, belief or intent of what is said to render the acts dishonest. The Applicant should determine whether the Solicitor subjectively had that knowledge, belief or intent and prove that the acts were objectively dishonest according to the standards of ordinary and decent people. It is not sufficient to establish dishonesty that the practitioner's belief was not reasonable or that the practitioner ought to have known the relevant facts (see Legal Services Commissioner v Brereton [2011] VSCA 241 at [78] and [80]). 2. The Applicant relies solely on objective facts, namely that the Solicitor transferred or used trust funds for her own benefit. Nowhere in the Application does the Applicant plead that, at the time of any of the transfers in question, that the Solicitor had any particular knowledge, intention or belief that was said to be dishonest. The Applicant has made no application to amend the Application. In opening, the Applicant reiterated that the particulars of the misappropriation ground were set out in the Application. No further particulars were sought to be relied upon. This appears to be on the basis that the primary submission made by the Applicant is that the misapplication of trust funds per se (non-dishonest misappropriation) is sufficient to make out its case. 3. In its opening submissions, the Applicant made only very brief reference to a case of dishonesty. The Applicant stated that the conduct was "dishonest" without saying why (see opening submissions at [25]). The Applicant stated that the Tribunal would reject the Solicitor's account without saying why or what alternative state of mind the practitioner is said to have had (opening submissions at [26]). In the opening submissions at [27] the Applicant stated that the Solicitor "must have known" the nature of her conduct and it must follow the consequences. The Solicitor contends that that does not articulate a state of mind sufficient to make out dishonesty for reasons set out above. 4. The first time the Applicant appeared to seek to put any case concerning the Solicitor's state of mind was in the course of cross examination of the Solicitor. When the Applicant sought to cross examine the Solicitor on her state of mind, objection was taken to that cross examination on the basis that no dishonesty had been pleaded. The Tribunal rejected the objection and allowed the questioning to continue. 5. The Solicitor contends that the result is that she has not conducted her case on any expanded grounds and that the Tribunal must decide whether the Applicant has established its case as pleaded and particularised. 6. The Solicitor contends that the Tribunal should find that the Applicant is limited to its pleaded and particularised case. That case is non-dishonest misappropriation or misapplication. Nowhere in the Application or opening submissions has the Applicant identified any intention, knowledge or belief said to have been possessed by the Solicitor. Even if the Applicant had belatedly particularised its contentions after the close of the case, the point is the same. It is unfair and contrary to the regime established for the hearing of disciplinary complaints that the first time a practitioner is aware of a case they are required to meet is in the course of cross examination. 7. The Solicitor contends that the first attempt to particularise a case of dishonesty occurred during cross examination. That occurred in the following exchange (transcript T1.58.3): Mr Westgarth: As I understand it, the Society says there is misappropriation and uses that word in the context of using money for a purpose that it was no intended to be used for, in other words for a purpose not authorised by the person providing the money, and the Society – correct me if I'm wrong, Mr Pierotti, says that such an act is... Mr Pierotti: Professional misconduct. Mr Westgarth: No, such an act is an act that is conducted knowingly and deliberately. Mr Pierotti: That is so. 1. The Solicitor contends that the above facts are not alleged either in the Application or in the Applicant's opening submissions. 2. The cross examination of the Solicitor was focused mostly on the aspects of the case that were accepted by the Solicitor, namely that she applied funds in a manner that she was not authorised to do and that, as at the date of the hearing, she understood that she was not authorised to apply the funds in the way that she did. 3. The cross examination addressed, only in a small minority of questions, the question of the Solicitor's state of mind at the relevant time. Given the lack of any clear pleading as to the relevant state of mind, such a cross examination was both irrelevant and confusing. That was especially so given the Solicitor's evidence of her misconception that "trust funds" were those funds that were not intended for a specified purpose, but rather held for the benefit of a client. 4. The Solicitor contends that there was been no attempt to articulate what is meant by the formulation offered by the Tribunal in the above extract from the transcript and in any event, the formulation contains a number of ambiguities. 5. The Solicitor submitted that the Applicant's submissions do not specify in relation to each ground the relevant intention, knowledge or belief said to be dishonest and how that intention, knowledge or belief has been established on the evidence. 6. The Solicitor makes the following points which she says are relevant to the Tribunal's consideration of all five misappropriation grounds. 7. The first is that she did not have any experience in dealing with trust funds or knowledge of trust funds at the time of the alleged conduct. She had worked as a solicitor in various government roles where she was not required to deal with or consider trust funds. She had only just started setting up her practice at the time of the relevant conduct and her life was complicated by having to deal with bowel cancer. Her case is very different from other cases where solicitors of many years' experience with both trust funds and operating a legal firm had misapplied trust funds. 8. The second point is that the Solicitor started operating her trust account on the basis of a clear misconception. She understood that trust funds were sums of money that were required to be held by a legal practice for an unspecified purpose. For that reason, she only considered she ever received one amount of trust funds, being the trust funds in the Briones matter. She drew a distinction (incorrectly she now accepts) between these funds and funds received for a specified purpose, albeit one to occur in the future. That understanding was not meaningfully challenged in cross examination. If the Solicitor's account is accepted, then transferring the funds for such a purpose was entirely credible and honest (albeit misguided). 9. The Solicitor has been consistent on this point. In particular, she provided the same account to Mr Dunlop in her very first conversation with him on 15 February 2016. In addition, her actions have been consistent. The Solicitor's practice (including the conduct the subject of the allegations) is entirely consistent with her account of her understanding. She kept only the Briones funds in trust and treated other amounts as office funds. The Applicant cannot point to a single example where the Solicitor applied funds in a way that was inconsistent with her understanding. 10. Thirdly, the Solicitor explained that the majority of matters that she was doing at the relevant time she was doing pursuant to her licence as a registered migration agent. She explained in cross examination that, in that context, the usual procedure (and indeed the preferred practice of the DIBP) was the payment of fees by credit card. She explained that she was not clear in her mind about the difference between handling migration funds and handling legal funds. 11. Fourthly, the unchallenged evidence was that the Solicitor did not need any of the amounts said to be misappropriated to meet her own personal expenses. Her evidence was that at all times she was able to pay all relevant amounts from a number of possible sources including her joint account with her husband. The fact that the Solicitor's credit cards were at times, near their limit, was not concerning or unusual given the way that the Solicitor and her husband managed their finances. This evidence is significant as it means that the Solicitor had no "motive" to misappropriate the funds in question. This strongly tends against the conclusion that the Solicitor would have at any time taken such a drastic and risky step as deliberately misappropriating client funds and then engaging in a widespread pattern of concealing those misappropriations in her trust records. The far more natural inference, consistent with Briginshaw is that she was genuinely mistaken. 12. Fifthly, the Solicitor is a person of good character and appears to have the full support of her clients. She had been a public servant for many years and the Applicant cannot point to a single client who has complained about her conduct let alone contend that they have lost money. All funds have been accounted for. 13. The Solicitor made the following submissions concerning the filing fees grounds (Ground 1.1, 1.3 and 1.5): 1. The Solicitor's evidence was that she did not appreciate that the payment of filing fees by her clients was trust funds. As such, her misapplication of those funds was not dishonest. Her approach to the treatment of filing fees was entirely consistent throughout her brief time operating as a sole practitioner; 2. The Solicitor structured the payment of her fees in a manner that was conducive to her misconception. She negotiated with each of the clients a fixed – upfront free that included a component for her fees and a component for the filing fees. It is entirely understandable how a practitioner might think that the contract provided for an upfront fee that was then able to be intermixed with other business funds. The difficulty caused by upfront payments has been shown in the case of the Council Of The Law Society Of The Act v Legal Practitioner RN [2016] ACAT 122. In that case, the practitioner charged clients an upfront payment of $350.00 for conveyancing. The ACT Law Society submitted that the funds were plainly trust money. The Tribunal found that the practitioner did not engage in discreditable acts, but rather, "engaged in a continuous course of incorrect conduct based on a mischaracterisation of money" (RN at [44]); and 3. Ground 1.1 should be dismissed on the basis that there was in fact no misapplication of property. The filing fees in question were able to, at all times, be withdrawn from the Solicitor's account which permitted her to redraw up to $1,200.00. The Applicant has provided no authority for the proposition that, in a disciplinary case, a misappropriation can be committed in such circumstances. 1. The Solicitor made the following submissions concerning the cheque (Ground 1.2): 1. The Solicitor's evidence was that she did not realise that she had issued the cheque from the trust account. She thought the cheque was drawn on the office account. She also gave evidence that she knew there was not sufficient funds in her office account to ensure that the cheque would clear, so on the same day, she drew down on fees that were owed to her in the Briones matter to ensure the cheque would clear; 2. The cheque was the first cheque that the Solicitor has issued in her practice. It was also the only cheque the Solicitor ever issued in her practice. This is not a case where the Solicitor had certain experiences of practices by which she must have become aware that the mistake had been made. This fact further points strongly against any conclusion that the Solicitor would have known or discovered the error; 3. There were no clear markings on the cheque book that would have alerted the Solicitor that it was for the trust account. The similarity of the two accounts is further apparent by the fact that both accounts were with the ANZ Bank; 4. The Solicitor gave evidence that she wanted to ensure that there were sufficient funds in the office account so that the cheque would clear is corroborated by the objective evidence. Her bank statement show a transfer of $1,000.00 immediately prior to the cheque being drawn; 5. The fact that a mistake had been made was clear from the fact that the Solicitor only discovered the mistake at an external examination with Mr Livermore in June 2016. In her evidence, the Solicitor explained how, in her mind, the $430.00 payment (in the Daniel matter) at some later stage became conflated or confused with the $450.00 (in the Briones matter). This was corroborated by the tax invoice that Mrs Davidson prepared in relation to the Briones matter. This evidence is unchallenged. No evidence has been called by the Applicant from Mrs Clarke and the inference to be drawn is that it would not have assisted the Applicant. It was Mr Livermore who prompted the Solicitor to look at her cheque books and it was only then that she appreciated the error and pointed it out to Mr Livermore. The Applicant has not called evidence from Mr Livermore. The Tribunal may more confidently accept the Solicitor's evidence and infer that Mr Livermore's evidence would not have assisted the Applicant. As stated in her cross examination, the Solicitor did not prepare bank reconciliations between October 2016 and June 2017 and she did not have a practice of checking the trust statements as they came in. This strengthens the conclusion that the Solicitor would not have picked up the mistake until the discussion with Mr Livermore; 6. The Solicitor gave unchallenged evidence that all the personal expenditure which she inadvertently made with those funds could have been paid from different sources. The Solicitor had no motive to misappropriate funds; and 7. The Solicitor gave a consistent account about the entry of $430.00 in her trust accounts payments cash book. That account was unchallenged. The cash book was drawn up on 16 February 2016 in anticipation of the inspection by Mr Dunlop the next day. The Solicitor believed that she took the $430.00 from the trust account bank statements and then assumed what the payment was for based on her phone call to Mrs Clarke at the time. The Applicant confused the $430.00 payment with $450.00 payment made in June 2015. This evidence was not relevantly challenged. Mrs Clarke was not called by the Applicant and the inference may be more confidently drawn that the phone call alleged took place as the Solicitor recalled. 1. The Solicitor made the following submissions concerning the Briones transfer (Ground 1.4): 1. The Solicitor's evidence was that she believed that once the $6,000.00 in funds were removed from the trust pursuant to a lawful direction from a client, they were able to be intermixed with her own funds. That approach was misconceived but not dishonest; 2. The Applicant appears to submit that this account should not be accepted because the funds could have been withdrawn at any time and the purpose for the withdrawal of the funds had not come to fruition on the basis that there was no bill from the accountants in relation to CGT. It is on this basis that the Applicant contends that there was no reason for the withdrawal of the funds. However, the Solicitor's evidence should be accepted for the reasons set out below; 3. The evidence is that the Solicitor withdrew the funds from trust into her personal account at the request of a client. The Solicitor explained that Mrs Clarke was going away and that the funds should be withdrawn so that they could be paid towards various expenses when the need arose. The conversation is corroborated by a contemporaneous file note; 4. The Solicitor's account of this event is un-contradicted; 5. The unchallenged evidence is that the Solicitor issued an invoice to the client for the $6,000.00 in November 2015. Doing so is entirely open and transparent about the funds and is the antithesis of dishonesty; 6. The fact that an invoice was issued for the amounts further provides an understandable (albeit misguided) basis for what the Solicitor understood she would be able to intermix funds withdrawn pursuant to that invoice. As in Legal Practitioner RN the position is again one that is not entirely conceptually clear. An invoice being issued at least on its face is ordinarily a foundation upon which funds may be withdrawn from trust; 7. Whilst misguided, there was logic to Mrs Clarke's suggested approach. The Solicitor was required to obtain authority from Mrs Clarke before removing funds from trust. If Mrs Clarke was going away and out of reach, that authority could not be obtained and the funds not paid. This would be problematic should there be urgency in the need for payment; 8. While there might have been an appropriately worded standing instruction provided by Mrs Clarke to the Solicitor that could have covered the contingency, the evidence is that such an idea was clearly not thought of by Mrs Clarke or the Solicitor; and 9. The Applicant has no basis to contend that the Solicitor "continued to fail to understand" the basics of trust law. The cross examination makes clear that the Solicitor is acutely aware that her treatment of the $6,000.00 was incorrect and deeply regretful that she did not handle the funds differently. Ground 2 1. The following is a summary of the Solicitor's submissions with respect to Ground 2: 1. This ground concerns the alleged failure to properly keep trust account records contrary to s 147(2) of the Uniform Law. The Applicant's case is that the records were not kept "in a way that at all times disclosed the true position in relation to trust money received" (s 147(2)(b)) and "in a way that enabled the trust account records to be conveniently and properly investigated or externally examined" (s 147(2)(c)). The Applicant particularised this failure as being, in relation to the Briones matter: 1. a failure to maintain a trust account ledger, trust receipts cash book, trust bank reconciliation statements or trust trial balances at the time of inspection by Mr Dunlop; and 2. a failure to maintain documents that clearly reflected the treatment of the $6,000.00 transfer and the $430.00 payment at the time of the inspection by Mr Livermore in June 2016. 1. The Application does not allege that the Solicitor commited the above breaches with any particular mental state (e.g. knowingly or recklessly); 2. The Solicitor admits the contentions contained in paragraph 27 of the Application and that the conduct amounts to unsatisfactory professional conduct. The Solicitor contends that the conduct should be seen in the context, namely that the Solicitor was unfamiliar with her trust obligations, new to private practice, had an ongoing battle with cancer and fundamentally (but honestly) misconceived her trust accounting obligations. She only ever believed that she received one set of trust funds and clearly underestimated the difficulty of running a trust account. The Solicitor was grateful for Mr Dunlop to attend and inspect her records and at no stage did she convey to him the impression that she had complied with all her obligations or that her records were accurate; and 3. The Solicitor contends that the conduct pleaded in paragraph 28 of the Application does not amount to unsatisfactory professional conduct or professional misconduct. The Applicant's case effectively amounts to the contention that a failure to record two individual and particular transactions should lead to disciplinary action. That case should be rejected. The failure to record the transactions was a clear oversight. Mere oversights of a small number of individual transactions cannot sound in disciplinary consequence. The Solicitor has accepted that she has not properly kept records. The effect of that acceptance is that not keeping proper records is liable to lead to mistakes being made, and not picked up such as the two transactions, the subject of paragraph 28 of the Application. Ground 3 1. In respect of Ground 3, the Solicitor's submissions may be summarised as follows: 1. This ground contends that there has been a failure to produce the Solicitor's personal bank statements to Mr Dunlop during his inspection on 17 February 2017, a failure to provide "certain records and information" (Ground 3.2) and a failure to provide a number of documents related to the Rabino matter (Ground 3.3). The Application does not allege that the Solicitor committed these breaches with any particular mental state; 2. Ground 3.1: in respect of this ground, the Applicant relies upon a verbal request by Mr Dunlop in February 2016 for the Solicitor to provide her personal bank statements. The ground is not established for three reasons. First, Mr Dunlop did not make clear that he was pressing his requirement under s 370(1) of the Uniform Law. Secondly, Mr Dunlop's request did not lead to a "requirement" under s 370(1) as it was not reasonable. Thirdly, the Solicitor's conduct should not sound in disciplinary consequences in the circumstances; 3. Section 370 provides a power to "require" production of documents and is limited to documents that the investigator "reasonably" requires. A person only has an obligation to comply where there has been a requirement within the meaning of the section. The Applicant has not established that Mr Dunlop in fact pressed his requirement after the Solicitor indicated that she wanted to seek legal advice. Mr Dunlop's account was that, after the Solicitor indicated that she wanted to seek legal advice an exchange took place which was recorded in the Dunlop report. That evidence is to the effect that Mr Dunlop asked whether the Solicitor was prepared to make another time for him to complete his review and that she replied in the negative. The Solicitor contends that there is no evidence that Mr Dunlop sent any follow up "requirement" for the bank statements. No request was made for the statements in the formal s 370 notice that was later issued by Mr Dunlop. Indeed, it was apparent from these notices that Mr Dunlop had already obtained the Solicitor's personal bank statements; 4. Although the evidence established that Mr Dunlop wanted the bank statements, it is entirely unclear whether he was pressing his formal requirement under s 370 of the Uniform Law. The Solicitor made clear that she was not going to take any further steps until she obtained legal advice and Mr Dunlop left it there. The evidence suggests that Mr Dunlop obtained the Solicitor's personal bank statements by other means and so the issue never arose again. Where disciplinary ramifications might follow, it is fundamental that the request under s 370 be abundantly clear; 5. Even if there was a requirement pressed by Mr Dunlop, the documents were not "reasonably required". Mr Dunlop's request was that the personal bank statements be produced "on the spot". Secondly, the request was for personal bank statements, being documents that are objective records kept by a particular bank and are unable to be destroyed or manipulated. Thirdly, there is no evidence from Mr Dunlop on how such a request was needed for his purposes and why it was reasonable. This is in itself fatal to the Applicant's case. There was no need for Mr Dunlop to have an "on the spot" production of documents at least in circumstances where the documents in question were not at risk of being manipulated or destroyed and the Solicitor had raised a legitimate concern about her rights. Fourthly, the context of Mr Dunlop asking for the bank statements was significant. The Solicitor said she felt intimidated that Mr Dunlop was standing over her shoulder as she went through her computer. Nextly, the Solicitor explained that she could not sit for more than four hours and was unwell. This was known to Mr Dunlop. Fifthly, the Solicitor indicated to Mr Dunlop that she was unsure of the legality of his request; and 6. Even if Mr Dunlop did in fact issue a requirement for the purposes of the Uniform Law, the Solicitor's failure should not sound in disciplinary consequences. Any failure was in the context of the extenuating circumstances described above. 1. The following is a summary of the Solicitor's submissions concerning Ground 3.2: 1. This concerns the alleged failure to comply with s 370 of the Uniform Law pursuant to the Notice given on 7 June 2017. The Solicitor alleges that this ground was not pleaded at the time the Applicant opened and closed its case or since then; 2. The Application states only that the Solicitor failed to provide certain records and information required by the notice issued under s 370. The Applicant does not make any allegation as to the state of mind of the Solicitor at the time she allegedly failed to comply. It is not contended that she deliberately or recklessly failed to comply. What is relied upon is a mere failure to comply. This cannot possibly sound in disciplinary consequences, particularly where a practitioner has given an explanation that she endeavoured to comply with the notice as the solicitor has in the present case. Secondly, it is not clear exactly what documents or information the Applicant alleges the Solicitor possessed but has not provided. The Applicant was squarely on notice of the Solicitor's position that the ground had not been properly pleaded (see the Solicitor's Reply). By correspondence the Applicant alleged that the correspondence was particularised in Annexure A to Mr Dunlop's report. That Annexure is inherently unclear and does not state in respect of files not produced which part has not been produced. Ground 3.2 has not been particularised. The first time the Applicant sought to put to the Solicitor that she had not produced certain documents was in cross examination over her counsel's objection. That a practitioner can be confronted for the first time with an allegation of wrong doing in the witness box is entirely unacceptable in circumstances where the Applicant has had ample opportunity to amend its application should it wish to do so; and 3. On 5 December 2018, the Tribunal ordered that the Applicant was to provide a list of the records and information which the Applicant alleges were requested but were not provided, specifying the paragraphs of the Application relevant to the records and information contained in the list. This Solicitor was then to respond whether or not she agreed and respects in which she disagreed. The Solicitor objected to that course. 1. The contentions of the Solicitor in relation to the above matters may be summarised as follows: 1. It is fundamentally problematic to allow the Applicant to, after the close of its case and while the Solicitor was in the middle of cross examination, to provide further and better particulars of the allegations sought to be made. The Solicitor is entitled to enter the witness box being fully aware of the case that she is required to meet. Accordingly, the Tribunal should not permit the Applicant to provide further and better particulars after the close of its case. The Tribunal should decide the case on the pleadings and, in doing so, should dismiss the ground regardless of what further particulars were provided by the Applicant in response to the Tribunal's orders; 2. Even if the Tribunal was minded to allow the particulars in the form provided, the claim remains deficient and ought to be rejected in any event. In response to the Tribunal's orders, the Applicant effectively re-served Mr Dunlop's Annexure A with some minor amendments but without addressing any of the weaknesses in Annexure A. It remains fundamentally unclear what it is that the Applicant is alleging for the same reasons as set out above. In addition, the Application pleads no particular state of mind. In such circumstances, a failure to comply cannot amount to disciplinary breach in any event; 3. In any event, the Applicant's case is not established on the evidence, for the reasons set out in the following paragraphs; 4. The Solicitor's clear evidence is that she believed she had provided to the Applicant, and in particular, to the Applicant's representative or the relevant representative (Mr Sivakumar) all the relevant documents that were sought by the Applicant in its notices. At the time of handing over the documents, she stated candidly to Mr Sivakumar that the files were all the hard copy files requested and she could not afford to print all of the electronic files. The Applicant is not able to establish even a prima facie case as to what documents and information were and were not provided. The only person able to provide any evidence on that fact, Mr Sivakumar was not called by the Applicant. The highest the Applicant's case rises is an unexplained document that states that what follows is a copy of the entire folder of documents provided. There is no evidence as to who authored that document and the basis upon which the author is said to have knowledge of it being the "entire folder". Without calling evidence on the point from Mr Sivakumar or Mr Dunlop, the Applicant cannot establish that bank statements were not provided (as opposed to, for instance, being withdrawn for analysis by Mr Sivakumar or Mr Dunlop and mistakenly not put back); 5. The result is that at best, the Applicant can only establish as not being provided those documents or information that the Solicitor has stated that she definitively did not provide (in a statement that she was ordered, over objection, to provide the Tribunal after the close of the Applicant's case or in the course of cross examination, over objection, on these topics); 6. Even if the Applicant can establish that certain documents were not provided to the Applicant, the Applicant cannot establish that they were documents that the Solicitor had in her possession. She was only required to produce documents in her possession. As was clear from the cross examination on day two of the hearing, the Applicant made no real challenge to her evidence that the majority of documents sought simply were not produced because they did either not exist or were not in her possession 7. Even if the Applicant can establish both a failure to produce and that the documents did exist, the Applicant cannot establish any breach occurred as the Applicant accepted the imperfect approach to production taken by the Solicitor. To the extent that certain documents may not have been provided, this was openly and frankly stated to be the case by the Solicitor and accepted by the Applicant. The unchallenged evidence was that at the time of production, the Solicitor stated to Mr Sivakumar that she was producing only the files she had in hard copy and not the digital files because she could not afford to print the digital files. No issue was taken with that approach. No further attempts were made by the Applicant to request digital files; and 8. Fourthly and finally, there is no evidence to support a contention that the Solicitor intentionally or recklessly failed to comply with her obligation to provide records. The Solicitor gave unchallenged evidence that she produced to the Applicant every document she had in hard copy. 1. The following is a summary of the Solicitor's submissions with respect to Ground 3.3 (failure to provide credit card statements): 1. Here, the Applicant's pleaded case was that the Solicitor failed to provide bank statements relating to credit card payments used to pay filing fees for her niece, Ms Rabino. The Solicitor admits this ground, but contends that the pleaded conduct does not amount to unsatisfactory professional conduct or professional misconduct. The Application does not plead that the Solicitor breached obligations with any particular mental state. A mere breach in and of itself cannot sound in disciplinary consequences; and 2. In any event, the case is not established on the evidence. In her Reply, the Solicitor admitted she had failed to provide those statements but contends that this was in the same context set out above, namely that she provided all the documents she had in hard copy and that she overlooked the provision of the bank statements. In her further affidavit, the Solicitor sought leave to withdraw the earlier admission and on reflection, is not sure whether she is able to positively say that she did not provide the bank statements. That is a fair position to take given how long ago the relevant events occurred and can only serve to reinforce the credibility of the Solicitor as a reliable witness that she would seek to correct such a relatively minor point. 1. The following is a summary of the submissions made by the Solicitor with respect to Ground 4: 1. Ground 4 contends that the Solicitor breached the general law by knowingly misleading Mr Livermore by "providing him with documents and information which were false or misleading". The ground particularises the failure as being the provision of four documents set out in paragraph 38(a) to (d) in the Application and a verbal denial of awareness of a certain trust deficiency (see paragraph 38(e) of the Application); 2. The Applicant has not identified with any precision the documents that are said to have been provided by the Solicitor or the circumstances in which they were provided. The Solicitor sets out in her submissions the understanding she has of the particular documents the subject of the ground. She then makes the submission which are summarised in the following paragraphs; 3. There is no evidence that Mr Livermore was in fact mislead. No evidence was called from Mr Dunlop as to whether he was in fact mislead by anything the Solicitor provided him or informed him. It should be inferred that the evidence would not have assisted the Applicant's case; 4. Secondly, there was no evidence that the documents were presented to Mr Livermore in a way that was apt to mislead him. In fact, the only evidence as to the circumstances in which the various documents were provided to Mr Livermore is that of the Solicitor. The unchallenged evidence of the Solicitor is that at no stage did she present the documents in a manner that would imply that they were accurate or that she was necessarily complying with her obligations. Mr Livermore's examination was arranged by the Solicitor. Indeed Mr Livermore assisted the Solicitor in drawing up a number of the documents said to be misleading. Three paragraphs of the Application concerning this ground all relate to the $430.00 payment which Mr Livermore accepted was incorrect and annotated the document to make that clear. There is no evidence from Mr Livermore that would contradict the Solicitor's account; 5. The Applicant has not established that the Solicitor acted knowing that her conduct was misleading. In her interaction with Mr Livermore, the Solicitor was making her best efforts to draw up trust accounts retrospectively. The most likely inference is that any incorrect entry was simply a mistake; 6. The Applicant's contentions in paragraphs 38(b), (c), (d) and (e) of the Application alleging that documents or information there identified were false and/or misleading all depend on the contention that the Solicitor had appreciated that the $430.00 cheque had been paid out of trust. For reasons already set out, the evidence establishes the contrary position; and 7. In relation to the contention set out in paragraph 38(a) of the Application, the Applicant's allegation is that the description of the $6,000.00 payment as "Costs" was knowingly misleading. This was a handwritten document prepared with the assistance of Mr Livermore and there is no evidence of the events that lead to the creation of this entry, including who promoted the entry. The Applicant cannot establish that it was made deliberately, knowingly or without any qualification expressed verbally to Mr Livermore. This is particularly so in circumstances where the Solicitor's evidence was that she did not convey to Mr Livermore the impression that the documents were correct. 1. The following is a summary of the Solicitor's submissions with respect to Ground 5: 1. This ground contends that there has been a failure to maintain trust records for the Briones matter in accordance with rr 35, 37 and 48 of the Rules. The Solicitor admits this ground and that the conduct amounts to unsatisfactory professional misconduct. The conduct should be seen in context, namely that the Solicitor was unfamiliar with her trust account obligations, new to private practice and had an ongoing battle with cancer as well as fundamentally (but honestly) misconceiving her trust account obligations; and 2. In closing submissions the Applicant appears to attempt to expand its case outside the Application to contend that the Solicitor committed these breaches with "reckless carelessness". Such a case was not pleaded or put to the Solicitor during the hearing. It would be unfair for the Tribunal to permit the Applicant to press this case for the first time in closing. 1. The following is a summary of the Solicitor's submissions with respect to Ground 6: 1. This ground concerns the contention that the Solicitor intermixed trust money in breach of s 146. The money relevant to the contention is the $430.00 in filing fees concerning the Daniel matter, the $6,865.00 in filing fees in respect of the Price/Tan matter and the $1,050.00 filing fees in respect of the Enriquez matter; and 2. The Solicitor admits this ground and that the conduct amounts to unsatisfactory professional conduct. Again, for the reasons outlined above, the context should be considered, namely that the Solicitor was unfamiliar with her trust obligations, new to private practice, had cancer and misconceived her trust account obligations. 1. The following is a summary of the Solicitor's submissions with respect to Grounds 7 and 8: 1. These grounds concern the contention that the Solicitor breached ss 138 and 148 by failing to hold trust money on account of the Briones matter exclusively for that client and disbursed monies held for that client without a direction by the client. The contention relates to the drawing of the cheque for $430.00 for the Daniel matter out of the Briones trust funds and the withdrawal of $6,000.00 from the Briones trust fund. The Solicitor admits Grounds 7 and 8. Insofar as the $6,000.00 is concerned, the Solicitor's evidence was that the funds were withdrawn after an invoice was issued and on the specific verbal direction of the client. 1. The Solicitor's submissions conclude with the following positions: 1. Ground 1 should be found insofar as it concerns misapplication (or non-dishonest misappropriation) in relation to Grounds 1.2 to 1.5 and found to be professional misconduct, but otherwise dismissed; 2. Ground 2 should be found insofar as it concerns an unintentional breach of s 147(2) but otherwise dismissed; 3. Ground 3 should be found insofar as it concerns an unintentional breach of s 370(2) in relation to Ground 3.1 but otherwise dismissed; 4. Ground 4 should be dismissed; 5. Ground 5 should be found insofar as it concerns an unintentional breach of rr 45, 47 and 48 and found to be unsatisfactory professional misconduct, but otherwise dismissed; 6. Ground 6 should be found insofar as it concerns an unintentional breach of s 146 and found to be unsatisfactory professional conduct, but otherwise dismissed; 7. Ground 7 should be found insofar as it concerns an unintentional breach of s 138 and in respect of only one aspect of the complaint, but otherwise dismissed; and 8. Ground 8 should be found insofar as it concerns an unintentional breach of s 148 and in respect of only one aspect of thecomplaint, but otherwise dismissed. Applicant's Submissions in Reply 1. The following summarises the Applicant's submissions in reply: 1. In reply to the Solicitor's submissions concerning the contention the Applicant has failed to prove dishonesty and, in any event, has not pleaded it, the Applicant quotes an extract from Council of the Law Society of New South Wales v Wehbe [2018] NSWCATOD 14 in which the Tribunal said that conduct might amount to professional misconduct "even though it does not involve deliberate dishonesty". The Applicant also stated that it relied upon the decisions in Shehadie and Brereton which were referred to in the Applicant's closing submissions; 2. The Applicant contends that the Solicitor has misconceived the Applicant's case and, consistently, the asserted need for other persons to be available to give evidence. There was no need to call Mr Livermore. The material from Mr Livermore was referred to within the affidavit of Mr Dunlop. There was no basis for calling Mr Sivakumar as he was the mere recipient of the documents required by Mr Dunlop. It was for Mr Dunlop to assert what documents had been requested and provided. The schedule requested of the Applicant deals with the receipt of documents by Mr Dunlop. There was no basis for the calling of Mrs Clarke. The Applicant's case has always remained about what the Solicitor did with the funds she received instructions to withdraw; and 3. The Solicitor's submission that her evidence has not waivered or been materially inconsistent is inconsistent with a reading of the transcript. The cross examination of the Solicitor reveals that she had an inability to deal with the questions being asked in a clear and candid manner. Her answers were not clear and consistent. 1. The Applicant's submissions with respect to "dishonesty" may be summarised as follows: 1. Any suggestion that allegations of misappropriation fail because it has not been pleaded as "dishonest" misappropriation is mistaken. On any view, (Brereton included) the Applicant was not required to provide substantive dishonesty. Dishonesty must be an included element of the objectively found misappropriation. To suggest that the Applicant's case was one of "misapplication" is entirely incorrect. The Applicant has always taken issue with the Solicitor's state of mind, that her actions were not mistaken or the like but must have been deliberate. The Applicant's case was never one that could be described as "non-dishonest misappropriation" or "misapplication"; 2. The Applicant's case is to be tested objectively – having proven the facts and cross examined the Solicitor on why events occurred (or did not occur) the objective test in Brereton is then applicable; 3. The transcript (T1.24 onwards) discloses a series of questions and answers which clearly disclosed that the Solicitor had undergone appropriate education. She agreed that she had been instructed that when trust money is received it can only be dealt with for the benefit of the client and in accordance with the client's instructions. Her evidence was that when she started operating her trust account she could not recall what she had learnt at the College of Law. The Applicant submits that "ineptness does not denigrate from one's responsibilities". The Applicant's task was to prove that the Solicitor having various professional, ethical and legal obligations, failed to carry out those obligations and thus was in breach of them. The Applicant cited the Court of Appeal decision in Bolster (the extract is cited earlier). Bolster is also authority for the proposition that the fact that no loss had occurred to a client is not a relevant issue in excusing the breach; 4. The lack of understanding by the Solicitor of what were or were not trust funds is similarly of great concern given her responsibilities and obligations as a sole practitioner; 5. Whatever the Solicitor's suggested position was with regard to the $6,000.00 received from Briones estate, the objective evidence is that the Solicitor must have made a conscious decision to use the funds because they were spent and not for the purpose agreed to with Mrs Clarke. The invoice is not a reason to proclaim transparency – the invoice included alleged disbursements for which the funds were not used, including accountancy fees and GST; 6. The Solicitor lacks bona fides as is evidenced by the suggestion that it might have been difficult for the Solicitor to obtain instructions from Mrs Clarke in her absence. An appropriate authority could have been obtained and in any event, the funds were not used for the purposes agreed upon; 7. In respect of Ground 2, the complaint is one of strict liability. The Solicitor admits the conduct but says it was not wilful. The evidence is clear that if the Solicitor did not intend her failure (to properly keep trust account records) she was so recklessly careless as to her obligations as to make such failure "wilful" – see Re Hodgekiss (1962) SR NSW 340; 8. In respect of Ground 3, the Applicant says that the suggestion that the request was unreasonable could have been put to Mr Dunlop but he was not required to be present for cross examination. There was no evidence that Mr Dunlop's requirements were not reasonable, nor that there was no necessity to comply with them. The question of documents produced or not produced (as set out in the schedule to Mr Dunlop's report) was dealt with in objections and in cross examination. The schedules were not "new evidence" but a summary of the evidence. The schedules were attached as an aide memoir attempt to put together the evidence (both documentary and from the respondent) and cross reference it to the transcript. To suggest that the Applicant is not able to establish even a prima facie case as to what documents were and were not provided is to neglect the Solicitor's own evidence as summarised in the aide memoir. As to the suggestion that the Solicitor's failure to produce documents was not intentional or reckless, the Solicitor's evidence was that that material was not produced because the Solicitor wished to save costs on ink and paper; 9. With respect to Ground 4, the Applicant says that the documents speak for themselves as to whether they were false and misleading; 10. With respect of Grounds 5 to 7, the Applicant relies upon the earlier submissions. The Applicant says that one "telling" submission made by the Solicitor is that the Solicitor could not have been in breach in respect of the Briones funds because the funds were withdrawn after an invoice was issued and on the specific verbal direction of the client. The evidence is clear that the invoice did not truthfully record a number of disbursements and if the Solicitor's evidence is restricted to the invoice as the basis for the authority, that submission must fail. Notwithstanding whatever Mrs Clarke's reasons for giving her authority to the Solicitor, it was not an authority to the Solicitor for her to withdraw the funds in question and use them for her own purposes. Consideration 1. The most serious of the grounds alleged against the Solicitor is found in Ground 1 which concerns alleged misappropriation of trust funds. The Solicitor's submissions seek to persuade the Tribunal that the use of trust funds was a "misapplication" or a "non-dishonest misappropriation". We are of the view that the charge of misappropriation is to be considered in the light of the authorities referred to in the following paragraphs. 2. In Law Society of NSW v Shehadie [2016] NSWCATOD 46 the Tribunal said the following: 35 It is accepted that the legal meaning of misappropriation carries the connotation of a wrongful, dishonest use. Further in disciplinary proceedings of the present kind, it is accepted that the prosecutor must show that the respondent knowingly engaged in the conduct of concern, and that the conduct was dishonest. There has been debate as to whether the prosecutor must show that the respondent knew that the conduct in which he or she had intentionally engaged was dishonest, or is it enough to show that regardless of his or her belief in that regard, it would be regarded as dishonest, viewed objectively. 36 In Brereton v Legal Services Commissioner [2010] VSC 378 Bell J examined closely what is required by way of proof of dishonesty in a misappropriation case. His Honour emphasised that the general law (both civil and criminal) in dealing with proof of dishonesty does not go so far as to require that the defendant knew at the time of the conduct that what he did was dishonest. Proof of 'subjective' dishonesty in that sense is not required. Bell J said (some footnotes omitted): 53 While an allegation of dishonesty requires consideration of the person's mental state, in neither the criminal nor the civil context is it necessary to establish that the person subjectively knew or believed that the actions concerned were dishonest. What must be established is that the person subjectively intended to do the acts which are said to be objectively dishonest by the ordinary standards of reasonable and honest people. Thus the course to be adopted in determining whether conduct is dishonest was explained by Toohey and Gaudron JJ in Peters v R [1998] HCA 7; (1998) 192 CLR 493] as follows:[ 503-504] In a case in which it is necessary for a jury to decide whether an act is dishonest, the proper course is for the trial judge to identify the knowledge, belief or intent which is said to render that act dishonest and to instruct the jury to decide whether the accused had that knowledge, belief or intent and, if so, to determine whether, on that account, the act was dishonest ... If the question is whether the act was dishonest according to ordinary notions, it is sufficient that the jury be instructed that that is to be decided by the standards of ordinary, decent people. 54 The steps involved in this formulation are: (1) identify the knowledge, belief or intent which is said to render the acts dishonest; (2) determine whether the accused (or defendant in the civil context) subjectively had that knowledge, belief or intent; and (3) determine whether, on that account, the acts were objectively dishonest according to the standards of ordinary and decent (that is reasonable and honest) people. 55 When applying these principles in a civil case, the civil standard of proof on the balance of probabilities applies. Of course, where the allegation in a civil case is of misappropriation, a high standard of probability is required, due to the gravity of the allegation.[Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336, 361-363 per Dixon J] In a criminal case, the criminal standard of proof beyond reasonable doubt applies. 37 In disciplinary proceeding of the present kind, therefore, the three steps to which Toohey and Gaudron JJ refer, and reiterated by Bell J at para [54] apply. It will be seen that those steps draw a clear distinction between the understanding of the defendant when engaging in the conduct and the characterisation of that understanding. Commonly, evidence will establish a state of knowledge, belief or intent in relation to the conduct under notice, and the issue will then be (step three) whether the proven state of understanding can fairly and properly be found to be dishonest. In making that finding the tribunal of fact will look at the totality of the evidence, and apply the standards of the community to what has been put to it by the defendant in that regard. 38 The Tribunal recently approved and adopted Bell J's analysis in Council of the Law Society of NSW v Coombes [2015] NSWCATOD 108 at [36]-[43], and described the approach to be adopted as follows: We will therefore proceed on the basis that we need first consider whether the Solicitor intended to do the acts which are the subject to (sic) the complaint and secondly whether ordinary and decent people would regard these acts as dishonest. 1. It is necessary to deal with each of the grounds (including the "sub-grounds") relied upon by the Applicant separately. In doing so, we make findings of misappropriation based upon the principles described above as extracted from Shehadie. Ground 1.1 1. Ground 1.1 alleges misappropriation of filing fees for the Daniel matter. The allegation is that on 10 September 2015, the Solicitor received $1,430.00 for the Daniel matter and that that sum was credited to her CBA personal bank account. The amount included $430.00 for court filing fees. The Solicitor admits those facts. 2. Ground 1.1 further alleges that the Solicitor did not deposit the $430.00 into her ANZ trust account pending payment of the court filing fees. The Solicitor admits that fact and says she mistakenly did not appreciate that any of the funds were trust money. 3. Ground 1.1 alleges that immediately prior to receipt of the $430.00. The Solicitor's personal account was overdrawn. This is admitted. The Applicant alleged that by 16 September 2015, the credit balance in the personal account had been used to make payments that did not include payment of the filing fee for the Daniel matter. The Solicitor admits those facts but says she was able to pay the filing fee out of the Solicitor's office account. 4. The Solicitor contends that Ground 1.1 must fail because the Applicant has not pleaded dishonest misappropriation, or alternatively, that the Applicant has not, on the evidence, established dishonest misappropriation. 5. Although the Solicitor had a "misconception" of what was trust money, the evidence discloses that she received $430.00 for a filing fee and did not use it for that purpose. We find that the Solicitor intended to use the funds deposited into her personal account for purposes other than the payment of the Daniel filing fee and in fact did not use the $430.00 for the purpose authorised by the client. We find that the Solicitor knew that she was using the filing fee money for other purposes. We find that her conduct in that regard was objectively dishonest according to the standards of ordinary and decent people. The Solicitor may not have intended to deprive the client permanently of the benefit of the funds received and the fact that the filing fee was paid later does not detract from the findings we have made or our conclusion which is that the solicitor misappropriated the filing fee. Ground 1.2 1. This ground alleges that the entirety of trust monies held in the Solicitor's trust account were held on behalf of the estate Briones. However, in October 2015 the Solicitor drew a cheque from the trust account in the sum of $430.00 to pay court filing fees for the Daniel matter. It is further alleged that the Solicitor attempted to conceal the misappropriation of the $430.00 by the following account entries provided to the trust account investigators: 1. The Solicitor claimed a disbursement of $430.00 in a bill issued on 10 September 2015 in the Briones matter but did not include this sum in transfer recorded on the trust ledgers for the matter; 2. On 13 October 2015 an entry was made in the Solicitor's trust account cash book misleadingly stating payment of the $430.00 disbursement was made in the Briones matter; and 3. On 29 June 2016 the Solicitor refunded the $430.00 sum to the trust account and corrected the Solicitor's trust account cash book. 1. The Applicant submits that the Solicitor misused the Briones money to pay the court filing fees for the other client (Daniel) and that that misuse constituted misappropriation of trust monies by the Solicitor. 2. The Applicant submits that the evidence of the Solicitor given during the hearing was that the $430.00 billed in the Briones matter was not the same money as was paid for the filing fees in the Daniel matter. The amount billed to the Briones matter was described as a payment to Mrs R Clarke, but there was no evidence that the Solicitor actually paid $430.00 to her. The Solicitor gave evidence that the description in the trust account payment cash book to the effect that Mrs Clarke was paid for cleaning and transportation expenses was a mistake. The Solicitor denied that she deliberately took the trust money to pay the filing fee for the Daniel matter. Her evidence was that she thought that she was drawing a cheque from her office account rather than the trust account. 3. We do not accept the Solicitor's explanation that she thought she was drawing a cheque from her office account and not from her trust account. This was the first trust cheque the Solicitor drew, and in our view, it is not credible that the Solicitor thought she was drawing a cheque on her office account. Her explanation is inconsistent with the fact that the Solicitor made the entry in the trust account cashbook recording that the payment of the $430.00 was in respect of the Briones matter. We are satisfied that the Solicitor intended to use trust money to pay the filing fee and that such conduct was objectively dishonest. The charge of misappropriation has been established. We reject the Solicitor's submission that this ground of the Application did not allege dishonesty. In our view, the allegation of dishonesty was clearly made in the particulars by the allegation that the Solicitor sought to conceal the truth of the payment by the misleading entry in the trust account cashbook. Ground 1.3 1. This ground concerns the receipt of $10,000.00 in October 2015 in respect of the visa application for the Solicitor's clients in the Price/Tan matter. This amount included $6,865.00 for the visa application filing fee to be paid to the Department of Immigration and Boarder Protection (DIBP). The amount was credited to the Solicitor's personal account but was not transferred to the trust account. The application fee was paid to the DIBP in January 2016. During the period from receipt of the sum of $10,000.00, the Solicitor's personal account fell below $6,865.00 and was for a period overdrawn. 2. In our view, the allegation of misappropriation has been made out. We are satisfied that the Solicitor knew that the funds she received were paid to her for the purposes of paying a filing fee to the DIBP and that before applying the funds received for that purpose, she allowed the account into which the funds had been paid to run down whereby the balance was, for a period, overdrawn. Such conduct, is in our view, objectively dishonest applying the ordinary standards of reasonable and honest people. 3. The Solicitor claims that she thought the money was not trust money. Even accepting that her belief as to what constituted trust money was genuinely held, there is no explanation for the misuse of the funds by depositing it into an account which was then the subject of withdrawals whereby the account fell below $6,865.00. Ground 1.4 1. This ground concerns the transfer on 30 December 2015 of the sum of $6,000.00 from the Solicitor's trust account to her office account. That sum was held in respect of the Briones matter and the Solicitor claims that she had the authority of the client (i.e. Mrs Clarke) to effect that transfer for the purpose of paying future accountancy fees and capital gains tax. On the same day, the Solicitor transferred $6,000.00 from the office account to her personal account and then a few days later, on 3 January 2016, the Solicitor transferred $6,950.00 from the personal account to the Solicitor's MasterCard account. On 6 January 2016, the Solicitor paid the sum of $6,939.14 to DIBP. 2. The evidence satisfies us that the Solicitor deliberately took $6,000.00 from the trust account (held for the Briones matter) and used that money to credit her MasterCard account so as to pay the filing fee to the DIBP in the Price/Tan matter. We have come to this conclusion because: 1. We do not accept the Solicitor's explanation that the funds were withdrawn from the trust account so as to pay future accountancy fees, CGT and the Solicitor's professional fees. Those anticipated expenses did not then exist and there was no need to withdraw the funds from the trust account; 2. The Solicitor's explanation that she thought the funds needed to be withdrawn from the trust account and placed into the office account because Mrs Clarke was going overseas does not make sense to us. Were such expenses to eventuate during Mrs Clarke's absence, the Solicitor would still, in our view, need to obtain Mrs Clarke's authority to pay them whether or not the funds were held in the office account or in the trust account, unless Mrs Clarke had given her authority to pay whatever the accountancy fees and CGT came to. There was no evidence of such an authority having been given; 3. The fact that the funds were within a short space of time following withdrawal from the trust account paid to the DIBP via the Solicitor's MasterCard enables us to be satisfied in our conclusion that the Solicitor intended to use the funds for the purpose of paying the filing fee in the Price/Tan matter; and 4. Even accepting the Solicitor's explanation for the transfer of the funds from the trust account, the funds were in our view, still required to be held for the purposes anticipated (payment of accountancy fees and CGT) and not for other unauthorised purposes. 1. We are satisfied to the Briginshaw standard that the Solicitor intended to use the funds held for the Briones matter for unauthorised purposes and did so. We are satisfied that such conduct was objectively dishonest by the ordinary standards of reasonable and honest people. 2. The conduct alleged under this ground constitutes misappropriation as it involves the deliberate misuse of funds by the Solicitor in circumstances where the Solicitor's conduct is in our view, objectively dishonest. 3. The Solicitor submits that the allegation of misappropriation pleaded against her is limited to misapplication or non-dishonest misappropriation. We reject the Solicitor's submission that in a case alleging misappropriation it is necessary to determine whether the Solicitor subjectively knew that what she was doing was dishonest. The elements required to be addressed in order to find misappropriation have been set out earlier in this decision. In our view, the case put by the Applicant in the Application has not been impermissibly expanded upon. Ground 1.5 1. This ground concerns an amount of $1,500.00 credited to the Solicitor's personal account in respect of a visa application for the client known as Enriquez. The amount was paid into the Solicitor's personal account on 5 November 2015. The amount was not transferred to the Solicitor's trust account and on 30 November 2015 the entire credit balance in the account was used to make payments or transfers for purposes other than the payment of the Enriquez filing fee. During cross examination the Solicitor admitted that the funds had been used for her own purposes. 2. For the same reasons as stated above, we find that the Solicitor has misappropriated the sum of $1,500.00. The Solicitor admits that the money was paid to her personal account and by reason of debits made to that account, the funds provided in the Enriquez matter were not used for the purposes for which they had been paid to the Solicitor. In our view, the charge of misappropriation has been established. 3. In conclusion, we find that Ground 1 has been made out in that the Solicitor has misappropriated the trust funds particularised in this ground. Ground 2 1. This ground concerns the breach of the obligation in s 147(2) to keep trust account records. The Solicitor admits the ground. However, the Solicitor submits that the failure to keep certain of the records amounts to unsatisfactory professional conduct but that the failure to maintain other records reflecting the treatment of the $6,000.00 transfer and the $430.00 payment at the time of the inspection of Mr Livermore does not constitute unsatisfactory professional conduct or professional misconduct. The Solicitor also concedes that the ground should be found insofar as it concerns an unintentional breach of s 147(2). 2. The Solicitor admits the failure but states that the breach was not wilful and that her conduct should be seen in context. The context concerned her inexperience and ill-health. The Solicitor's opening submissions state that in part her conduct amounted to unsatisfactory professional conduct but in her closing submissions states that the failure to keep some records constitutes unsatisfactory professional conduct. 3. We agree that the failure to keep the records described in paragraph 27 of the particulars to the Application constitute unsatisfactory professional conduct upon the basis that the Solicitor's conduct falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent lawyer (see s 296). Ground 3 1. This concerns the Solicitor's failure to comply with s 370 on three separate occasions (complaints 3.1, 3.2 and 3.3). That section authorises an investigator to require a solicitor to give the investigator access to "documents relating to the affairs of the law practice the investigator reasonably requires". 2. In our view, the Solicitor failed to comply with s 370 as alleged in complaint 3.1. The Solicitor concedes that she did not provide copies of the transactions recording credits for the future payment of filing fees for clients as recorded in her personal account. She denies that Mr Dunlop required her to produce her personal account. The report of Mr Dunlop annexed to his affidavit (Exhibit B) includes evidence of his request to the Solicitor to print a copy of the transactions on the Solicitor's personal account. We are satisfied on the basis of that uncontested evidence that Mr Dunlop made a request and that the Solicitor refused to comply. In circumstances where the Solicitor's practice involved clients paying money into her personal account, it was particularly reasonable for the investigator to require (as he did) copies of the personal account. The Solicitor's assertion that it was reasonable for her to refuse the request while she obtained legal advice is rejected. There was no prejudice to her in providing immediate access and it was in the interests of the protection of clients that the investigator had immediate access in order to ensure that clients' money was not at risk. 3. We also reject the Solicitor's assertion that in the exchange between her and Mr Dunlop, he did not press the request. The exchange contains clear evidence that Mr Dunlop made the request and that the Solicitor refused to comply. The Solicitor states in her Reply that she provided Mr Dunlop with access to her personal computer. This assertion is inconsistent with her assertion that she needed to obtain legal advice before allowing Mr Dunlop to have access to her personal account. We are not satisfied that any such access (if it occurred) was sufficient to comply with Mr Dunlop's request. We are satisfied that the assertions made in complaint 3.1 have been proven. 4. The second alleged failure to comply with s 370 arose out of the notice issued on 7 June 2016 (Complaint 3.2). The Solicitor's position is that she provided documents as required and that the Applicant's assertion that she failed to provide certain documents should be dismissed. It is not contended that the Solicitor deliberately or recklessly failed to comply and it is not clear precisely what documents or information the Applicant alleges that the Solicitor possessed but has not provided, other than certain trust bank statements which the Solicitor said were not produced because of ink/paper restrictions. The Solicitor's evidence was that some documents were not produced because she did not have such records (e.g. trust receipts cashbook). We are not satisfied to the requisite standard that the Solicitor failed to produce documents required by s 370 which, although they existed, she decided not to produce. Nor are we satisfied as to the extent of any failure. Accordingly, we decline to make any finding of a breach by the Solicitor in respect of this ground. 5. Complaint 3.3 concerns an alleged failure to comply with a s 370 notice issued on 6 September 2016. The Solicitor admits that she failed to provide certain documents but says that the failure should not constitute unsatisfactory professional conduct or professional misconduct. Any failure was inadvertent. We are satisfied that in respect of some documents the Solicitor chose not to produce them because she stated she was unable to afford printing them. However, the evidence is insufficient as to the extent of any breach to enable us to conclude with confidence that the Solicitor failed to provide documents which were available to her to provide. We decline to make any finding in respect of this complaint. Ground 4 1. This concerns an allegation that the Solicitor misled Mr Livermore by providing him with documents and information which were false and/or misleading. There are four documents particularised in paragraph 38 of the Application. The complaint also states that the Solicitor denied to Mr Livermore that she was previously aware of the trust deficiency of $430.00 that resulted from the payment of court filing fees in the Daniel matter from trust money held from the Briones matter when she knew or ought to have known of the deficiency. 2. The first document stated to be false and/or misleading was a hand written trust account ledger for the Briones matter which described the transfer of $6,000.00 on 30 December 2015 as being for "Costs", but in the trust accounts payment trust book provided to Mr Livermore, it was described as being for "Meeting with accountants and seeking advice on CGT" when the Solicitor or knew or ought to have known it was for the future payment of the accountant's fees and capital gains tax. In our view, the Applicant's submissions are persuasive in that we are satisfied to the requisite standard that the description contained in the trust account ledger describing the transfer as "Costs" and the description in the trust account payments cashbook (referred to earlier) were incorrect and therefore misleading. In cross examination, the Solicitor admitted as much. The truth was that the Solicitor had transferred the funds to her personal account and then to her MasterCard account. The Solicitor's submissions purport to make something of the fact that there was no evidence that Mr Livermore was misled or that the documents were presented to Mr Livermore in a way that was apt to mislead. In our view, such evidence was unnecessary. The relevant evidence was that the documents were provided by the Solicitor to Mr Livermore and that is conceded in the Solicitor's Reply (paragraph 28c). We do not accept the contentions of the Solicitor that she was doing her best to draw up accounts retrospectively and that any incorrect entry was simply a mistake. 3. Paragraphs 38 b, c and d of the Application concern the trust payments cashbook recording the withdrawal of $430.00 on 13 October 2015 as being paid to Mrs Clarke for transport, clean up etc. when the Solicitor knew or ought to have known the withdrawal was for the payment of the court filing fee in the Daniel matter. The second document is an invoice dated 10 September 2015 in respect of the Briones matter which includes a disbursement of $430.00 paid to Mrs R Clarke when, according to the Applicant, the Solicitor knew or ought to have known that there was no such payment to Mrs Clarke. The third document is the handwritten Briones trust ledger which omitted the withdrawal of $430.00 when the Solicitor knew or ought to have known that that amount had been withdrawn from the trust money held for the Briones matter. As we have found earlier that we do not accept the Solicitor's evidence that she thought that the $430.00 trust cheque was in fact from another cheque account, we find that the Solicitor's interaction with Mr Livermore in the production of these documents lead to the provision of false and/or misleading documents. 4. Paragraph 38 e refers to the Solicitor's denial to Mr Livermore that she was previously aware of the trust deficiency of $430.00 and based upon our earlier findings we conclude that the Solicitor's denial to Mr Livermore was also misleading. We agree with the Applicant that the documents speak for themselves and find that they were false and misleading. Ground 5 1. Ground 5 concerns the failure to maintain trust account records for the Briones matter in accordance with rr 35, 37 and 48 of the Rules. The Solicitor admits this ground but states that her conduct was the result of unfamiliarity, inexperience and ill-health. By reason of the findings we have made earlier in this decision, we are of the opinion that the Solicitor's failure to maintain trust records was also the result at least in part due to her misappropriation of trust money with the consequence that there was a deliberate failure to maintain trust records until such time as it became necessary to appear to comply with the requirements of the trust account inspectors. Ground 6 1. This ground concerns the contention that the Solicitor intermixed trust money in breach of s 146. The Solicitor admits this ground and submitted that the conduct amounts to unsatisfactory professional conduct. Because we are of the opinion that the use of the funds was deliberate by the Solicitor and that her conduct was dishonest by the ordinary standards of reasonable and honest people, we are of the opinion that the conduct cannot be described merely as unsatisfactory professional conduct, but must be categorised as professional misconduct. This conclusion is based on the finding that the conduct was of the kind described in Allinson, i.e. conduct which is regarded as disgraceful and dishonourable by professional brethren of good repute and competency. Grounds 7 and 8 1. These grounds allege breaches of s 138 (i.e. the requirement to hold trust money exclusively for the person on whose behalf it is received) and s 148 (the requirement not to cause a deficiency in any trust account). In our view, both grounds have been established to the Briginshaw standard. The obligation under s 138 is not dependent upon the Solicitor's understanding of what is trust money. The Solicitor's misconception of what is trust money, and the Solicitor's actions in the handling of trust money based upon that misconception is so fundamental that it demonstrates a significant level of ignorance of the elementary obligations of a solicitor who takes money on trust from clients. We also find that the Solicitor's conduct caused a deficiency on the trust account in respect of the funds particularised under the ground. Orders 1. Having regard to our findings of professional misconduct and unsatisfactory professional conduct, we make the following orders: 1. The respondent is guilty of professional misconduct and of unsatisfactory professional conduct; and 2. These proceedings are stood over to be listed for directions and setting down the proceedings for a hearing to determine what disciplinary orders the Tribunal ought to make. ********** I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Registrar I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 03 July 2019