Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Council of the Law Society of NSW v Stuart [2019] NSWCATOD 108 Hearing dates: 31 May 2019 Date of orders: 05 July 2019 Decision date: 05 July 2019 Jurisdiction: Occupational Division Before: The Hon F Marks, Principal Member M Riordan, Senior Member B Thomson, General Member Decision: (1) Consequent upon the finding of professional misconduct which we have made we order that the name of the respondent be removed from the roll of lawyers maintained by the Supreme Court of NSW (2) The respondent is to pay the costs of the applicant assessed in default of agreement. Catchwords: Legal practitioner – breaches of trust account regulations – unauthorised withdrawal of client monies – breach of order of Supreme Court of NSW – admissions by respondent – finding of professional misconduct – name of respondent removed from the roll of lawyers – costs order made. Legislation Cited: Legal Profession Act 2004 Cases Cited: Nil Texts Cited: Nil Category: Principal judgment Parties: Council of the Law Society of NSW (Applicant) Andrew Graham Stuart (Respondent) Representation: Council of the Law Society of NSW (Applicant) Williams the Law Firm (Respondent) File Number(s): 2019/0009805 Publication restriction: Nil REASONS FOR DECISION Background 1. In these proceedings the applicant Council of the Law Society of NSW seeks the making of disciplinary findings against the respondent legal practitioner, Andrew Graham Stuart, based on allegations of unsatisfactory professional conduct and professional misconduct. The applicant also seeks the making of certain protective orders against the respondent. 2. The proceedings are constituted by an Application. In conformity with the protocols adopted by this Tribunal we have anonymized parts of the application. As will be seen, the respondent admitted all of the allegations of misconduct made against him, although he did dispute the quantum of some of the amounts sought to be claimed by way of refund as set out in the Application. We reproduce relevant portions of the Application so anonymized hereunder; The Applicant seeks the following orders: 1. The Respondent's name be removed from the Roll. 2. The Respondent refund to the following Estates the following amounts, which the Respondent caused, without authority, to be paid to the Law Practice on account of commission: Estate Amount Estate of MJC $38,500 Estate of MCR $88,000 Estate of GAH $22,000 Estate of MLR $44,000 3. The Respondent refund to the following Estates the amounts that he caused, without authority, to be paid to the Law Practice on account of legal costs and disbursements: a. Estate of MW; b. Estate of MJC; c. Estate of MCR; d. Estate of CEW; e. Estate of BLC; f. Estate of WBR; g. Estate of GAH; and h. Estate of GGR. 4. The Respondent refund the sum of $60,000 to the Estate of MLR 5. The Respondent pays the costs of the Applicant as agreed or assessed. 6. Such further or other orders as the Tribunal deems fit. 2. GROUNDS FOR APPLICATION (INCLUDING PARTICULARS) The Respondent is guilty of professional misconduct because he: 1. misappropriated trust monies; 2. breached section 255 of the Legal Profession Act 2004; 3. breached section 263 of the Legal Profession Act 2004; 4. breached Rule 11 of the Revised Professional Conduct & Practice Rules 1995; 5. contrary to the terms of MLR's Will, without authority, made payments, in the sum of $30,000 from monies held on trust for (the Estate) to each of ABG and PM; and 6. breached an order made by the Supreme Court of New South Wales on 31 July 2013 in proceedings No. 2013/232141. PARTICULARS RELEVANT LEGISLATION Legal Profession Act 2004 Section 250 - Liability of principals of law practice (1) A provision of this Part or the regulations made for the purposes of this Part expressed as imposing an obligation on a law practice imposes the same obligation on the principals of the law practice jointly and severally, but discharge of the practice's obligation also discharges the corresponding obligation imposed on the principals. (2) References in this Part and the regulations made for the purposes of this Part to a law practice include references to the principals of the law practice. Section 255 - Holding, disbursing and accounting for trust money (1) A law practice must: (a) hold trust money deposited in a general trust account of the practice exclusively for the person on whose behalf it is received, and (b) disburse the trust money only in accordance with a direction given by the person. Maximum penalty: 50 penalty units. (2) Subsection (1) applies subject to an order of a court of competent jurisdiction or as authorised by law. (3) The law practice must account for the trust money as required by the regulations. Maximum penalty: 50 penalty units. Section 263 - Reporting certain irregularities and suspected irregularities (1) As soon as practicable after a legal practitioner associate of a law practice becomes aware that there is an irregularity in any of the practice's trust accounts or trust ledger accounts, the associate must give written notice of the irregularity to: (a) the Law Society Council, and (b) if a corresponding authority is responsible for the regulation of the accounts concerned—the corresponding authority. Maximum penalty: 50 penalty units. (2) If an Australian legal practitioner believes on reasonable grounds that there is an irregularity in connection with the receipt, recording or disbursement of any trust money received by a law practice of which the practitioner is not a legal practitioner associate, the practitioner must, as soon as practicable after forming the belief, give written notice of it to: (a) the Law Society Council, and (b) if a corresponding authority is responsible for the regulation of the accounts relating to the trust money concerned—the corresponding authority. Maximum penalty: 50 penalty units. (3) An Australian legal practitioner is not liable for any loss or damage suffered by another person as a result of the practitioner's compliance with subsection (1) or (2). Revised Professional Conduct & Practice Rules 1995 Rule 11 - A Practitioner Receiving a Benefit under a Will or other Instrument 11.1 A practitioner who receives instructions from a person to draw a Will appointing the practitioner an Executor must inform that person in writing before the client signs the Will: 11.1.1 of any entitlement of the practitioner to claim commission; 11.1.2 of the inclusion in the Will of any provision entitling the practitioner, or the practitioner's firm, to charge professional fees in relation to the administration of the Estate, and; 11.1.3 if the practitioner has an entitlement to claim commission, that the person could appoint as Executor a person who might make no claim for commission. 11.2. A practitioner who receives instructions from a person to: 11.2.1 draw a will under which the practitioner or an associate will, or may, receive a substantial benefit other than any proper entitlement to commission (if the practitioner is also to be appointed executor) and the reasonable professional fees of the practitioner or the practitioner's firm; or 11.2.2 draw any other instrument under which the practitioner or an associate will, or may, receive a substantial benefit in addition to the practitioner's reasonable remuneration, including that payable under a conditional costs agreement, must decline to act on those instructions and offer to refer the person, for advice, to another practitioner who is not an associate of the practitioner, unless the person instructing the practitioner is either: 11.2.3 a member of the practitioner's immediate family; or 11.2.4 a practitioner, or a member of the immediate family of a practitioner, who is a partner, employer, or employee, of the practitioner. 11.3 For the purposes of this rule: "substantial benefit" means a benefit which has a substantial value relative to the financial resources and assets of the person intending to bestow the benefit. Section 719 – Liability of principals (1) If a law practice contravenes, whether by act or omission, any provision of this Act or the regulations imposing an obligation on the practice, each principal of the practice is taken to have contravened the same provision, unless the principal establishes that: (a) the practice contravened the provision without the knowledge actual, imputed or constructive of the principal, or (b) the principal was not in a position to influence the conduct of the law practice in relation to its contravention of the provision, or (c) the principal, if in that position, used all due diligence to prevent the contravention by the practice. (2) Subsection (1) does not affect the liability of the law practice for the contravention. (3) A contravention of a requirement imposed on a law practice by this Act is capable of being unsatisfactory professional conduct or professional misconduct by a principal of the practice. DEFINITIONS Act means the Legal Profession Act 2004. Law Practice means the law practice known as Stuart & Mills. Office Account means the Law Practice's National Australia Bank bank account styled "AG Stuart T/A Stuart & Mills" with BSB 082 067 and account no. 51 873 5909, which was operated by the Law Practice at all material times. Respondent means Mr Andrew Graham Stuart. RPCP Rules means the Revised Professional Conduct & Practice Rules 1995. Trust Account means the Law Practice's National Australia Bank bank account styled "AG Stuart T/A Stuart & Mills" with BSB 082 067 and account no. 68 989 1180, which was operated by the Law Practice at all material times. BACKGROUND 1. The Respondent: (a) was admitted as a lawyer in New South Wales on 28 July 1972; (b) during the periods 1972 to 30 June 1988 and 9 January 1989 to 29 July 2013 held a New South Wales practising certificate; and (c) during the period 1 July 2006 to 29 July 2013 was the sole principal of the Law Practice. 2. On 29 July 2013, the Applicant suspended the Respondent's practising certificate and appointed Mr Richard Gerard Flynn, Solicitor, as Manager of the Law Practice pursuant to section 616 of the Act. 3. On 31 July 2013, the Supreme Court of New South Wales made an order appointing Mr John Ernest Mitchell as Receiver to the Law Practice. 4. Pursuant to sections 250 and 719 of the Act, as sole principal of the Law Practice, the Respondent was subject to the same obligations as the Law Practice, including but not limited to obligations under Part 3.1 of the Act. A. MW's Estate i. Grounds: a) The Respondent misappropriated trust money. b) The Respondent breached section 255 of the Act. 5. On 18 November 2010, MW died. 6. On 30 November 2010, the Respondent caused $11,000, on account of the Law Practice's professional costs and charges for acting on behalf of MW during her lifetime, to be withdrawn from the Trust Account from monies held on trust for (her) Estate and deposited into the Office Account. 7. Immediately subsequent to the deposit of the monies referred to in paragraph 6 above, the Office Account was overdrawn by $7,396.39. 8. On 10 February 2011, the Respondent caused $11,000, on account of the Law Practice's professional costs and charges for acting in relation to the administration of MW's Estate, to be withdrawn from the Trust Account from monies held on trust for (the estate) and deposited, with other monies, into the Office Account. 9. Immediately subsequent to the deposit of the monies referred to in paragraph 8 above, the Office Account was in credit by $3,086.38. 10. During the period 10 February 2011 to 15 February 2011, the Respondent caused monies to be withdrawn from the Office Account so that, as at 15 February 2011, the Office Account was overdrawn by $8,205.07. 11. On 17 March 2011, the Supreme Court of New South Wales granted probate in relation to MW's Will. 12. On 4 May 2011, the Respondent caused $11,000, on account of the Law Practice's costs for providing legal services in relation to the administration of MW's Estate, to be withdrawn from the Trust Account from monies held on trust for (the estate) and deposited, with other monies, into the Office Account. 13. Immediately subsequent to the deposit of the monies referred to in paragraph 12 above, the Office Account was in credit by $20,349.68. 14. During the period 4 May 2011 to 5 May 2011, the Respondent caused monies to be withdrawn from the Office Account so that, as at 5 May 2011, the Office Account was overdrawn by $7,602.19. 15. On 2 September 2011, the Respondent caused $2,200, on account of the Law Practice's costs for providing legal services in relation to the administration of MW's Estate, to be withdrawn from the Trust Account from monies held on trust for (the estate) and deposited, with other monies, into the Office Account. 16. Immediately subsequent to the deposit of the monies referred to in paragraph 15 above, the Office Account was overdrawn by $849.22. 17. On 14 September 2011, the Respondent caused $5,500, on account of the Law Practice's costs for providing legal services in relation to the administration of MW's Estate, to be withdrawn from the Trust Account from monies held on trust for (the estate) and deposited into the Office Account. 18. Immediately subsequent to the deposit of the monies referred to in paragraph 17 above, the Office Account was overdrawn by $21,134.46. 19. On 10 August 2012, the Respondent caused $8,800, on account of the Law Practice's costs for providing legal services in relation to the administration of MW's Estate, to be withdrawn from the Trust Account from monies held on trust for (the estate) and deposited into the Office Account. 20. Immediately subsequent to the deposit of the monies referred to in paragraph 19 above, the Office Account was overdrawn by $21,595.99. 21. On 12 July 2013: (a) settlement in relation to the sale of a property, which formed part of MW's Estate (Estate Property) took place; (b) the proceeds of the sale of the Estate Property were deposited into the Trust Account; and (c) the Respondent caused $20,600.58, on account of the Law Practice's professional costs and charges for acting on behalf of MW's Estate in relation to the sale of the Estate Property, to be withdrawn from the Trust Account from monies held on trust for (the estate) and deposited into the Office Account. 22. At no time was the Respondent authorised to cause any of the monies referred to in paragraphs 6, 8, 12, 15, 17, 19 or 21(c) above to be withdrawn from the Trust Account or paid to the Law Practice. 23. The probate application in relation to MW's Will does not disclose as a liability of the Estate any monies payable to the Law Practice on account of its acting on behalf of MW during her lifetime. 24. In the circumstances referred to in paragraphs 5 to 23 above, the Respondent misappropriated trust monies and breached section 255 of the Act. B. WBR's Estate i. Grounds: a) The Respondent misappropriated trust money. b) The Respondent breached section 255 of the Act. 25. On 22 January 2007, WBR died. 26. On the following dates, the Respondent caused the following amounts, on account of the Law Practice's costs for providing legal services in relation to the administration of (the estate), to be withdrawn from the Trust Account from monies held on trust for (the estate) and deposited into the Office Account: Date Amount 20 May 2009 $4,400 (deposited into the Office Account with other monies) 3 September 2009 $3,300 (deposited into the Office Account with other monies) 15 July 2010 $6,553.03 27. Each of the dates referred to in paragraph 26 above post-dated the date on which WBR's Estate had been fully administered. 28. Immediately subsequent to the following deposits referred to in paragraph 26 above, the Office Account was overdrawn by the following amounts: Deposit date Amount by which Office Account was overdrawn 20 May 2009 $24,163.32 3 September 2009 $17,036.09 15 July 2010 $12,822.97 29. At no time was the Respondent authorised to cause any of the monies referred to in paragraph 26 above to be withdrawn from the Trust Account or paid to the Law Practice. 30. In the circumstances referred to in paragraphs 25 to 29 above, the Respondent misappropriated trust monies and breached section 255 of the Act. C. MCR's Estate i. Grounds: a) The Respondent misappropriated trust money. b) The Respondent breached section 255 of the Act. 31. On 9 April 2012, MCR died. 32. On 13 April 2012, the Respondent caused $33,000, on account of the Law Practice's professional costs in relation to the legal services it provided MCR during her lifetime, to be withdrawn from the Trust Account from monies held on trust for (the estate) and deposited into the Office Account. 33. Immediately subsequent to the deposit of the monies referred to in paragraph 32 above, the Office Account was in credit by $11,674.29. 34. During the period 13 April 2012 to 16 April 2012, the Respondent caused monies to be withdrawn from the Office Account so that, as at 16 April 2012, the Office Account was overdrawn by $1,886.53. 35. On 17 July 2012, the Respondent caused $8,250, on account of the Law Practice's costs and disbursements for its providing legal services in relation to the administration of MCR's Estate, to be withdrawn from the Trust Account from monies held on trust for (the estate) and deposited into the Office Account. 36. Immediately subsequent to the deposit referred to in paragraph 35 above, the Office Account was overdrawn by $4,757.16. 37. On 18 April 2012, the Respondent caused $100,000.00 to be withdrawn from the Trust Account, from monies held on trust for (the estate), and paid to A Pty Ltd in part repayment of a debt that the Respondent owed to A Pty Ltd. 38. On 12 June 2012, the Respondent caused $44,000.00, on account of commission in relation to MCR's Estate, to be withdrawn from the Trust Account from monies held on trust for (the estate) and deposited into the Office Account. 39. Immediately subsequent to the deposit referred to in paragraph 38 above, the Office Account was in credit by $36,460.83. 40. During the period 12 June 2012 to 22 June 2012, the Respondent caused monies to be withdrawn from the Office Account so that, as at 22 June 2012, the Office Account was overdrawn by $3,997.55. 41. On 27 July 2012, the Supreme Court of New South Wales granted probate in relation to MCR's Will. 42. On 24 August 2012, the Respondent caused $11,000, on account of the Law Practice's costs and disbursements for its providing legal services in relation to the administration of MCR's Estate, to be withdrawn from the Trust Account from monies held on trust for (the estate) and deposited, with other monies, into the Office Account. 43. Immediately subsequent to the deposit referred to in paragraph 42 above, the Office Account was in credit by $23,786.26. 44. During the period 24 August 2012 to 14 September 2012, the Respondent caused monies to be withdrawn from the Office Account so that, as at 14 September 2012, the Office Account was overdrawn by $2,178.10. 45. On 10 October 2012, the Respondent caused $44,000.00, on account of commission in relation to MCR's Estate, to be withdrawn from the Trust Account from monies held on trust for (the estate) and deposited, with other monies, into the Office Account. 46. Immediately subsequent to the deposit referred to in paragraph 45 above, the Office Account was in credit by $21,236.44. 47. During the period 10 October 2012 to 17 October 2012, the Respondent caused monies to be withdrawn from the Office Account so that, as at 17 October 2012, the Office Account was overdrawn by $19,300.51. 48. At no time was the Respondent authorised to cause any of the monies referred to in: (a) paragraphs 32, 35, 38, 42 or 45 above to be withdrawn from the Trust Account or paid to the Law Practice; or (b) paragraph 37 above to be withdrawn from the Trust Account or paid to A Pty Ltd. 49. In the circumstances referred to in paragraphs 31 to 48 above, the Respondent misappropriated trust monies and breached section 255 of the Act. ii. Ground: The Respondent breached Rule 11 of the RPCP Rules 50. Around July 2009, the Respondent drafted MCR's Will. 51. Under clause 2 of MCR's Will, the Respondent was appointed as an Executor of the Will. 52. Clause 4 of MCR's Will stated: "IF ANY executor and/or trustee of this my Will shall be a Solicitor or engaged in any other professional or business capacity he may make all usual professional charges for work done by him or any partner of his or by any firm of which he is a member or to whom he is a consultant in relation to the administration of my estate or the trusts of this my Will or any conduct hereto in the same manner in all respects as if he were not an executor and/or trustee hereof but had been employed by the Trustees hereof to do such work and in addition nothing in this Will shall preclude any such Solicitor who is an Executor and/or Trustee from making application to the Court for commission in respect of my estate." 53. At no time did the Respondent inform MCR in writing: (a) of his entitlement, under MCR's Will, to claim commission; (b) of his or the Law Practice's entitlement, under the Will, to charge professional fees in relation to the administration of the Estate; or (c) that MCR could appoint as Executor a person who might make no claim for commission. 54. In the circumstances referred to in paragraphs 50 to 53 above, the Respondent breached Rule 11 of the RPCP Rules. D. MJC's Estate i. Grounds: a) The Respondent misappropriated trust money. b) The Respondent breached section 255 of the Act. 55. On 9 September 2010, MJC died. 56. On 10 February 2011, the Respondent caused $974.35, on account of the Law Practice's costs for providing legal services in relation to the administration of MJC's Estate, to be withdrawn from the Trust Account from monies held on trust for (the estate) and deposited, with other monies, into the Office Account. 57. Immediately subsequent to the deposit of the monies referred to in paragraph 56 above, the Office Account was in credit by $3,086.38. 58. During the period 10 February 2011 to 15 February 2011, the Respondent caused monies to be withdrawn from the Office Account so that, as at 15 February 2011, the Office Account was overdrawn by $8,205.07. 59. On 22 March 2011, the Supreme Court of New South Wales granted probate in relation to MJC's Will. 60. On the following dates, the Respondent caused the following amounts, on account of commission in relation to MJC's Estate, to be withdrawn from the Trust Account from monies held on trust for (her estate) and deposited, with other monies, into the Office Account: Date Amount 11 May 2011 $22,000 2 September 2011 $16,500 61. Immediately subsequent to the deposits referred to in paragraph 60 above, the Office Account was overdrawn by the following amounts: Date of deposit Amount by which Office Account overdrawn 11 May 2011 $2,258.70 2 September 2011 $849.22 62. At no time was the Respondent authorised to cause any of the monies referred to in paragraphs 56 or 60 above to be withdrawn from the Trust Account or paid to the Law Practice. 63. In the circumstances referred to in paragraphs 55 to 62 above, the Respondent misappropriated trust monies and breached section 255 of the Act. ii. Ground: The Respondent breached Rule 11 of the RPCP Rules 64. Around July 2009, the Respondent drafted MJC's Will. 65. Under clause 2 of MJC's Will, the Respondent was appointed as an Executor of the Will. 66. Clause 13 of MJC's Will stated: "IF ANY executor and/or trustee of this my Will shall be a Solicitor or engaged in any other professional or business capacity he may make all usual professional charges for work done by him or any partner of his or by any firm of which he is a member or to whom he is a consultant in relation to the administration of my estate or the trusts of this my Will or any conduct hereto in the same manner in all respects as if he were not an executor and/or trustee hereof but had been employed by the Trustees hereof to do such work and in addition nothing in this Will shall preclude any such Solicitor who is an Executor and/or Trustee from making application to the Court for commission in respect of my estate." 67. At no time did the Respondent inform MJC in writing: (a) of his entitlement, under the Will, to claim commission; (b) of his or the Law Practice's entitlement, under the Will, to charge professional fees in relation to the administration of the Estate; or (c) that MJC could appoint as Executor a person who might make no claim for commission. 68. In the circumstances referred to in paragraphs 64 to 67 above, the Respondent breached Rule 11 of the RPCP Rules. E. CEW's Estate i. Grounds: a) The Respondent misappropriated trust money. b) The Respondent breached section 255 of the Act. 69. On 12 October 2012, CEW died. 70. On 23 November 2012, the Respondent caused $4,981.75, on account of the Law Practice's costs and disbursements, to be withdrawn from the Trust Account, from monies held on trust for MGW's estate, and deposited into the Office Account. 71. Immediately subsequent to the deposit referred to in paragraph 70 above: (a) the monies held in the Trust Account on trust for MGW's Estate were overdrawn by $4,981.75; and (b) the Office Account was overdrawn by $10,532.50. 72. On or around 4 December 2012, the Respondent caused $17,018.25: (a) on account of the Law Practice's disbursements to be withdrawn from the Trust Account from monies held on trust for CEW's Estate and deposited into the Trust Account to be held on trust for MGW's Estate; and (b) withdrawn from the Trust Account from monies held on trust for MGW's Estate and deposited into the Office Account. 73. Immediately subsequent to the deposit referred to in paragraph 72(b) above, the monies held in the Trust Account on trust for MGW's Estate were overdrawn by $4,981.75. 74. On or around 17 December 2012, the Respondent caused $4,981.75, on account of the Law Practice's costs and disbursements, to be withdrawn from the Trust Account from monies held on trust for CEW's Estate and deposited into the Trust Account to be held on trust for MGW's Estate. 75. Immediately subsequent to the deposit referred to in paragraph 74 above, the trust ledger for MGW's Estate showed a nil balance. 76. On 27 February 2013, the Supreme Court of New South Wales granted probate in relation to CEW's Will. 77. At no time was the Respondent authorised to cause the monies referred to in paragraph 72 above to be withdrawn from the Trust Account from monies held on trust for CEW's Estate, deposited into the Trust Account to be held on trust for MGW's Estate or paid to the Law Practice. 78. At no time was the Respondent authorised to cause the monies referred to in paragraph 74 above to be withdrawn from the Trust Account from monies held on trust for CEW's Estate or deposited into the Trust Account to be held on trust for MGW's Estate. 79. In the circumstances referred to in paragraphs 69 to 78 above, the Respondent misappropriated trust monies and breached section 255 of the Act. F. GAH's Estate i. Grounds: a) The Respondent misappropriated trust money. b) The Respondent breached section 255 of the Act. 80. On 9 November 2008, GAH died. 81. On 15 February 2010, the Respondent caused $22,000, on account of commission in relation to GAH's Estate, to be withdrawn from the Trust Account from monies held in trust for GAH's Estate and deposited, with other monies, into the Office Account. 82. Immediately subsequent to the deposit referred to in paragraph 81 above, the Office Account was in credit by $15.67. 83. On 15 February 2010, the Respondent caused monies to be withdrawn from the Office Account so that, as at 15 February 2010, the Office Account was overdrawn by $2,727.03. 84. On 22 January 2009, the Respondent caused $9,626.65, on account of the Law Practice's professional costs and disbursements for providing legal services in relation to the administration of GAH's Estate, to be withdrawn from the Trust Account from monies held on trust for (her estate) and deposited, with other monies, into the Office Account. 85. Immediately subsequent to the deposit referred to in paragraph 84 above, the Office Account was in credit by $34,262.12. 86. On 22 January 2009, the Respondent caused monies to be withdrawn from the Office Account so that, as at 22 January 2009, the Office Account was overdrawn by $723.86. 87. On 27 January 2009, the Supreme Court of New South Wales granted probate in relation to GAH's Will. 88. At no time was the Respondent authorised to cause any of the monies referred to in paragraphs 81 or 84 above to be withdrawn from the Trust Account or paid to the Law Practice. 89. In the circumstances referred to in paragraphs 80 to 88 above, the Respondent misappropriated trust monies and breached section 255 of the Act. G. BLC's Estate i. Grounds: a) The Respondent misappropriated trust money. b) The Respondent breached section 255 of the Act. 90. On 9 June 2010, BLC died. 91. As at May 2011, BLC's Estate had been fully administered, except for $19,205.00 which was retained in a pension fund known as the A Pension Fund. 92. On the following dates, the Respondent caused the following amounts, on account of the Law Practice's costs and disbursements for providing legal services in relation to the administration of BLC's Estate, to be withdrawn from the Trust Account from monies held for (the estate) and deposited into the Office Account: Date Amount 26 August 2011 $2,200 (deposited into the Office Account with other monies) 24 August 2012 $4,400 (deposited into the Office Account with other monies) 1 November 2012 $3,300 93. Immediately subsequent to the following deposits referred to in paragraph 92 above, the Office Account was overdrawn by the following amounts: Date of deposit Amount by which Office Account was overdrawn 26 August 2011 $9,264.56 1 November 2012 $27,033.78 94. Immediately subsequent to the deposit dated 24 August 2012, referred to in paragraph 92 above, the Office Account was in credit by $23,786.26. 95. During the period 24 August 2012 to 14 September 2012, the Respondent caused monies to be withdrawn from the Office Account so that, as at 14 September 2012, the Office Account was overdrawn by $2,178.10. 96. At no time was the Respondent authorised to cause any of the monies referred to in paragraph 92 above to be withdrawn from the Trust Account or paid to the Law Practice. 97. In the circumstances referred to in paragraphs 90 to 96 above, the Respondent misappropriated trust monies and breached section 255 of the Act. H. MLR's Estate i. Grounds: a) The Respondent misappropriated trust money. b) The Respondent breached section 255 of the Act. 98. On 30 March 2007, MLR died. 99. On 13 July 2007, the Respondent caused $30,000, on account of commission in relation to MLR's Estate to be withdrawn from the Trust Account, from monies held in trust for MLR's Estate, and deposited into the Office Account. 100. Immediately subsequent to the deposit referred to in paragraph 99 above, the Office Account was in credit by $44,960.77. 101. During the period 13 July 2007 to 9 December 2008, the Respondent caused monies to be withdrawn from the Office Account so that, as at 9 December 2008, the Office Account was overdrawn by $21,884.76. 102. On 16 December 2008, the Respondent caused $16,500, on account of commission in relation to MLR's Estate, to be withdrawn from the Trust Account from monies held in trust for MLR's Estate and deposited, with other monies, into the Office Account. 103. Immediately subsequent to the deposit referred to in paragraph 102 above, the Office Account was overdrawn by $14,433.57. 104. At no time was the Respondent authorised to cause the monies referred to in paragraphs 99 or 102 above to be withdrawn from the Trust Account or paid to the Law Practice. 105. In the circumstances referred to in paragraphs 98 to 104 above, the Respondent misappropriated trust monies and breached section 255 of the Act. ii. Ground: Contrary to the terms of MLR's Will, the Respondent made payments without authority, in the sum of $30,000, from monies held on trust for MLR's Estate to each of ABG and PM. 106. MLR's Will specified a bequest made to each of ABG and PM in the sum of $50,000. 107. On or around the following dates, the Respondent caused the following amounts to be withdrawn from the Trust Account, from monies held in trust for MLR's Estate, and paid to the following persons: Date Amount Payee 5 September 2007 $5,000 ABG 27 September 2007 $75,000 $80,000 PM 108. At no time was the Respondent authorised to cause any amount exceeding $50,000, to be withdrawn from the Trust Account and paid to ABG or PM 109. In the circumstances referred to in paragraphs 106 to 108 above, the Respondent, without authority: (a) made a payment in the sum of $30,000 from monies held on trust for MLR's Estate to ABG; and (b) made a payment in the sum of $30,000 from monies held on trust for MLR's Estate to PM. I. AGR's Estate i. Grounds: a) The Respondent misappropriated trust money. b) The Respondent breached section 255 of the Act. 110. On 2 December 2010, AGR died. 111. On 23 February 2011, the Respondent caused $4,595.13, on account of the Law Practice's costs and disbursements for providing legal services in relation to the administration of AGR's Estate, to be withdrawn from the Trust Account from monies held on trust for (the estate) and deposited, with other monies, into the Office Account. 112. Immediately subsequent to the deposit referred to in paragraph 111 above, the Office Account was overdrawn by $7,751.53. 113. On 5 May 2011, the Supreme Court of New South Wales granted probate in relation to AGR's Will. 114. At no time was the Respondent authorised to cause the monies referred to in paragraph 111 above to be withdrawn from the Trust Account or paid to the Law Practice. 115. In the circumstances referred to in paragraphs 110 to 114 above, the Respondent misappropriated trust monies and breached section 255 of the Act. J. SDM i. Ground: The Respondent breached section 263 of the Act. 116. In 2012, the Respondent acted for SDM in relation to: (a) the grant of probate for the Will, and the administration of the Estate, of his: (i) late mother VJM; and (ii) late father WRM; and (b) Family Court proceedings unrelated to the Estates referred to in paragraph 116(a) above (Family Court Matter). 117. As at 25 July 2012, no monies were held in the Trust Account in relation to the Family Court Matter. 118. On 25 July 2012, the Respondent caused $255, on account of a filing fee in the Family Court Matter, to be withdrawn from the Trust Account and paid to the Collector of Public Monies. 119. After the withdrawal referred to in paragraph 118 above, the Respondent caused the Trust Account ledger for the Family Court matter to be amended so that it showed a balance of negative $255. 120. The Respondent was aware of the negative balance referred to in paragraph 119 above. 121. At no time did the Respondent report the negative balance referred to in paragraph 119 above to the Society. 122. In the circumstances referred to in paragraphs 116 to 121 above, the Respondent breached section 263 of the Act. K. JMW Estate i. Ground: The Respondent breached section 263 of the Act. 123. In 2010, the Solicitor acted on behalf of RW in relation to the grant of probate for the Will, and the administration of the Estate, of his: (a) late mother JMW; and (b) late father WEW. 124. On 9 September 2010, the Respondent caused the Trust Account ledger for JMW's Estate to be amended so that it showed a balance of negative $388,824.18. 125. The Respondent was aware of the negative balance referred to in paragraph 124 above. 126. At no time did the Respondent report the negative balance referred to in paragraph 124 above to the Society. 127. In the circumstances referred to in paragraphs 123 to 126 above, the Respondent breached section 263 of the Act. L. Breach of an order made by the Supreme Court of New South Wales on 31 July 2013 in proceedings No. 2013/232141 i. Ground: The Respondent breached Order 4 made by the Supreme Court of New South Wales on 31 July 2013 in proceedings No. 2013/232141. 128. On 31 July 2013, the Supreme Court of New South Wales in Proceedings No. 2013/232141 (Supreme Court Proceedings) made orders, including: "4. Until further Order the Defendant be restrained by himself and his servants or agents from removing, or causing or permitting to be removed, from the State of New South Wales, or selling, charging, mortgaging or otherwise dealing with or disposing of, or causing or permitting to be sold, charged, mortgaged or otherwise dealt with or disposed of, all or any of his assets within the State of New South Wales without first obtaining the leave of the Plaintiff or of the Court do so". 129. The Applicant was the defendant in the Supreme Court Proceedings. 130. On 9 January 2014, the Respondent MMV entered into an agreement (Mortgage Agreement) under which two of the Respondent's properties, located in Kensington, New South Wales were mortgaged. 131. At no time did the Respondent obtain leave from the Supreme Court of New South Wales or the Applicant to enter into the Mortgage Agreement. 132. In the circumstances referred to in paragraphs 128 to 131 above, the Respondent breached the order referred to in paragraph 128 above. The evidentiary material 1. By a Reply document the respondent said that he "accepts all grounds and particulars and consents to the making of the Orders sought in the Application" except that certain payments had been made to six of the estates the subject of the Application. 2. Notwithstanding the admissions made by the respondent we required the applicant to refer us to the corroborative evidence that had been filed in the proceedings in support of the particulars of each of the complaints. This evidence was comprised substantially of material provided in a number of reports of John Ernest Mitchell, variously, Chief Trust Account Inspector and Chief Trust Account Investigator and Supervisor employed by the applicant. In addition, Mr Mitchell had been appointed Receiver of the respondent's law practice by the Supreme Court of NSW. Material exhibited to Mr Mitchell's affidavit comprised extracts from bank statements, office and trust account ledgers and other material which verified each and every particular of the complaints. We also received an affidavit of Gavin Taylor Connor a Trust Account Investigator employed by the applicant who conducted an investigation into the affairs of the respondent's law practice and produced a Trust Report which was annexed to his affidavit. Further corroborative evidence was exhibited to an affidavit of the applicant's solicitor. Findings as to the complaints and particulars thereof 1. Having regard to all of the evidence to which we have been taken, and the admissions properly made by the respondent we are comfortably satisfied to the Briginshaw standard that each and every one of the particulars of the complaints has been made out. Additional evidentiary material 1. The respondent did not give oral evidence in the proceedings. He did provide some limited information concerning his conduct in the form of an affidavit sworn 18 April 2019. In that affidavit he said, in part; I regret deeply my actions. To this day I cannot understand my motivations and I regret that these actions have brought to an end a long and what I see as a successful career as a solicitor assisting my clients in various capacities. It is not the way I desired my professional life to come to an end. The matters involved are the subject of criminal proceedings in respect of which I have pleaded guilty, and I am making restitution to all the parties referred to in the charges. 1. In a further affidavit sworn 24 May 2019 the respondent said that he had made payment of moneys due in relation to all of the estates referred to in the particulars of the complaints. 2. Evidence furnished by the applicant states that the respondent was born on 4 March 1948 and was admitted as a legal practitioner on 28 July, 1972. His practising certificate was suspended on 29 July 2013. 3. There is a paucity of evidence about the circumstances which led the respondent to engage in the conduct which is the subject of these proceedings. The most detailed explanation is that contained in a report of Anna Ross, psychologist, dated 8 October 2013. The respondent first attended on her on 31 July 2013. Ms Ross diagnosed the respondent as suffering from depression with suicidal ideation. This was associated with the suspension of his practising certificate. 4. The respondent informed Ms Ross that his financial difficulties commenced when he borrowed $250,000 in 2007 so that he could loan this amount to friends who were experiencing financial difficulties. Those friends were unable to repay any part of the loan or any interest on it. He continued to roll over the $250,000 loan which he had obtained but could only do so upon condition that he paid interest up front on that loan in the sum of $100,000. By 2012 he was experiencing symptoms of depression exacerbated by undergoing a knee operation. In April 2012 an elderly client and close friend died. He had a deadline for payment of the interest of $100,000 the day after her funeral. He said that he knowingly unlawfully transferred monies from the account of his deceased client into his own account and did not attempt to cover it up. The respondent subsequently borrowed the sum of $100,000 from a friend and repaid the monies into his trust account. 5. That appears to constitute the beginning of a course of conduct which is detailed in the complaints and particulars contained in the Application. 6. Ms Ross provided her own explanation for the conduct of the respondent. In the absence of any direct evidence from the respondent and any oral evidence from Ms Ross, it is not appropriate to proceed on the basis of the rationalisation made by her for his behaviour. Professional misconduct 1. Having regard to the findings which we have made concerning the conduct of the respondent, it then becomes necessary to determine whether, as a result, he is guilty of unsatisfactory professional conduct or professional misconduct. These proceedings are governed by the provisions of the now repealed Legal Profession Act 2004 by reason of the time period during which the misconduct of the respondent occurred. Relevantly, sections 496 and 497 of that Act provide as follows; 496 Unsatisfactory professional conduct For the purposes of this Act: unsatisfactory professional conduct includes conduct of an Australian legal practitioner occurring in connection with the practice of law that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent Australian legal practitioner. 497 Professional misconduct (1) For the purposes of this Act: professional misconduct includes: (a) unsatisfactory professional conduct of an Australian legal practitioner, where the conduct involves a substantial or consistent failure to reach or maintain a reasonable standard of competence and diligence, and (b) conduct of an Australian legal practitioner whether occurring in connection with the practice of law or occurring otherwise than in connection with the practice of law that would, if established, justify a finding that the practitioner is not a fit and proper person to engage in legal practice. (2) For finding that an Australian legal practitioner is not a fit and proper person to engage in legal practice as mentioned in subsection (1), regard may be had to the matters that would be considered under section 25 or 42 if the practitioner were an applicant for admission to the legal profession under this Act or for the grant or renewal of a local practising certificate and any other relevant matters. 1. Honesty, integrity and trust are integral to the practice of law by the legal profession. Without these attributes all of the varied human endeavours serviced by the profession could not function in any proper manner. The clients of lawyers rely upon and anticipate that lawyers representing them and representing others with whom they are dealing will conduct themselves ethically and professionally. The ethical responsibilities of lawyers are enshrined in statute and in codes of conduct enforceable by law. 2. In particular solicitors are entrusted with moneys held for and on behalf of their clients. Part 3.1 of Chapter 3 of the Legal Profession Act 2004 contains detailed provisions relating to the operation of solicitors' trust accounts. Statutory provisions of this kind have applied to solicitors over many years. Their notoriety is such that the community is entitled to expect that solicitors will comply with them. 3. The respondent has systematically breached his professional responsibilities to his clients and on one occasion to the Supreme Court of NSW over a period of 6 years, involving large sums of money, and in defiance of a Court order. 4. There can be no doubt that the respondent's conduct constitutes professional misconduct. There has been a substantial and consistent failure to maintain an appropriate standard of conduct. Indeed, it is misconduct of a most egregious kind. The respondent did not contend to the contrary. In addition, the misconduct of the respondent is such that it justifies a finding that he is not a fit and proper person to engage in legal practice. We proceed on the basis that it is sufficient to describe the details of the misconduct which we have found to have occurred to enable the conclusion to be made that it constitutes professional misconduct. Protective orders 1. Consequent upon the finding that we have made that the respondent is guilty of professional misconduct, it is necessary to determine what protective orders should properly be made. The nature and extent of these orders are set out in section 562 of the Legal Profession Act 2004 which is in the following terms; 562 Determinations of Tribunal (1) Orders generally If, after it has completed a hearing under this Part in relation to a complaint against an Australian legal practitioner, the Tribunal is satisfied that the practitioner has engaged in unsatisfactory professional conduct or professional misconduct, the Tribunal may make such orders as it thinks fit, including any one or more of the orders specified in this section. (2) Orders requiring official implementation in this jurisdiction The Tribunal may make the following orders under this subsection: (a) an order that the name of the practitioner be removed from the local roll, (b) an order that the practitioner's local practising certificate be suspended for a specified period or cancelled, (c) an order that a local practising certificate not be issued to the practitioner before the end of a specified period, (d) an order that: (i) specified conditions be imposed on the practitioner's practising certificate issued or to be issued under this Act, and (ii) the conditions be imposed for a specified period, and (iii) specifies the time (if any) after which the practitioner may apply to the Tribunal for the conditions to be amended or removed, (e) an order reprimanding the practitioner, (f) an order that the name of the practitioner be removed from the roll of public notaries maintained under the Public Notaries Act 1997. (3) Orders requiring official implementation in another jurisdiction The Tribunal may make the following orders under this subsection: (a) an order recommending that the name of the practitioner be removed from an interstate roll, (b) an order recommending that the practitioner's interstate practising certificate be suspended for a specified period or cancelled, (c) an order recommending that an interstate practising certificate not be granted to the practitioner before the end of a specified period, (d) an order recommending that: (i) specified conditions be imposed on the practitioner's interstate practising certificate, and (ii) the conditions be imposed for a specified period, and (iii) the conditions specify the time (if any) after which the practitioner may apply to the Tribunal for the conditions to be amended or removed. (4) Orders requiring compliance by practitioner The Tribunal may make the following orders under this subsection: (a) an order that the practitioner pay a fine of a specified amount, (b) an order that the practitioner undertake and complete a specified course of further legal education, (c) an order that the practitioner undertake a specified period of practice under supervision, (d) an order that the practitioner do or refrain from doing something in connection with the practice of law, (e) an order that the practitioner cease to accept instructions as a public notary in relation to notarial services, (f) an order that the practitioner's practice, or the financial affairs of the practitioner or of the practitioner's practice, be conducted for a specified period in a specified way or subject to specified conditions, (g) an order that the practitioner's practice be subject to periodic inspection for a specified period, (h) an order that the practitioner undergo counselling or medical treatment or act in accordance with medical advice given to the practitioner, (i) an order that the practitioner use the services of an accountant or other financial specialist in connection with the practitioner's practice, (j) an order that the practitioner not apply for a local practising certificate before the end of a specified period. Note. This subsection is not an exhaustive statement of orders that must be complied with by the practitioner. (5) Ancillary or other orders The Tribunal may make ancillary or other orders, including an order for payment by the practitioner of expenses associated with orders under subsection (4), as assessed or reviewed in or in accordance with the order or as agreed. (6) Alternative finding The Tribunal may find that a person has engaged in unsatisfactory professional conduct even though the complaint or disciplinary application alleged professional misconduct or may find that a person has engaged in professional misconduct even though the complaint or disciplinary application alleged unsatisfactory professional conduct. (7) Maximum fine The amount ordered by the Tribunal under this section to be paid by way of fines by any one Australian legal practitioner in connection with the Tribunal's findings about a complaint must not exceed in total: (a) $10,000 in the case of unsatisfactory professional conduct not amounting to professional misconduct, or (b) $75,000 in the case of professional misconduct. If the Tribunal finds that the practitioner has engaged in both professional misconduct and unsatisfactory professional conduct not amounting to professional misconduct, the amount must not exceed $75,000 in total. (8) Reprimands If the Tribunal makes an order reprimanding the practitioner, the Tribunal is to publish the order and a statement of its reasons for making the order. (9) It is sufficient compliance with the requirement to publish an order under subsection (8) if the Tribunal provides to the Commissioner sufficient information to enable the Commissioner to exercise the Commissioner's powers or functions in respect of the Register of Disciplinary Action required to be kept under Part 4.10 (Publicising disciplinary action). (10) (Repealed) 1. We have set out the provisions of section 562 in full to indicate that there is a hierarchy of protective orders which can be made. It is well-established by authority that these orders are protective in nature and are directed to the protection of the public from further misconduct by a legal practitioner. They are not punitive in nature, although there will often be a punitive effect including, for example, deprivation of the ability to earn a livelihood through the future practice of law. In addition to this protective characteristic, these orders are designed to have a deterrent effect on the legal practitioner lest he or she engage in conduct of this kind in the future as well as a deterrent effect on other legal practitioners to dissuade them from temptation to engage in conduct of this kind. Finally, orders of this kind will have the beneficial effect of enhancing the confidence and trust of the community in the integrity and reputation of the legal profession, such confidence and trust having arguably been damaged by the misconduct of the respondent. 2. As we have earlier pointed out, the misconduct of the respondent in the circumstances of these proceedings as found by us is of a most egregious and serious kind. It is indicative that the respondent is not a fit and proper person to remain on the roll of solicitors. Prima facie, therefore, the appropriate order is that his name be removed from the roll of lawyers in New South Wales. 3. There is authority in the NSW Court of Appeal that a practitioner's name should only be removed from the roll of solicitors if it is thought that he or she is permanently unfit to practise law. We proceed on the basis that a person is so unfit if he or she is unlikely to be fit to practise in the foreseeable future and is therefore to be considered as unfit to practise law indefinitely. This is to be contrasted with a determination that a legal practitioner is unfit to practice law ever again. 4. We approach our consideration of this matter having regard to the limited information available as to why the respondent engaged in the misconduct which he did. It is only if we are aware of why he systematically breached his trust account obligations over a lengthy period involving multiple clients, and why he breached an order of the Supreme Court of NSW that we can begin to consider whether and to what extent he might engage in such misconduct in the future. If, for example, there was uncontroversial medical evidence that a particular condition was the sole cause for the misconduct, that condition was now being treated and would be completely cured after a designated time period, and that the practitioner could not engage in such conduct in the future, it would be possible to conclude that the practitioner was not likely to be unfit to practise indefinitely. 5. However, this is not the situation with which we are faced in these proceedings. In the absence of any evidence from the respondent and any appropriate expert evidence from a person qualified in the behavioural sciences, we do not know why the respondent engaged in the misconduct which he did, and we cannot begin to consider whether he is likely to engage in such misconduct in the future. We understand that he might initially have been motivated by a shortage of funds brought about by a desire to assist a friend, but many people in the community are short of funds from time to time, and yet do not stoop to misconduct of the kind engaged in by the respondent to alleviate their problems. 6. We note that the burden of satisfying us that he is likely to be a fit and proper person within a definable period lies on the respondent. He has not sought to discharge that burden. Indeed, the respondent has informed us that he has no intention of practising law in the future. 7. In all the circumstances it is appropriate that we make an order that the respondent's name be removed from the roll of solicitors in New South Wales, and we shall so order. Compensation 1. The applicant sought orders for the payment of compensation in the Application. By letter dated 11 June, 2019 the applicant advised us that it no longer sought to make any such order. Accordingly, there is no need for us to deal with this aspect of the proceedings. Costs 1. The applicant sought an order for the payment of its costs. This is a costs jurisdiction, and prima facie the applicant is entitled to the benefit of such an order. The respondent did not put forward any matter which would militate towards a different result. We shall make a costs order accordingly. Orders 1. Consequent upon the finding of professional misconduct which we have made we order that the name of the respondent be removed from the roll of lawyers maintained by the Supreme Court of NSW 2. The respondent is to pay the costs of the applicant assessed in default of agreement. ********** 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: 05 July 2019