Solicitor's Certificate Suspended for Misconduct

The Tribunal suspended the solicitor's practising certificate for 18 months due to professional misconduct and unsatisfactory professional conduct, including failing to carry out instructions, misleading clients, and breaching trust account requirements.

CITATION: [COMPANY] v [NAME] [2004] NSWADT 237 DIVISION: Legal Services Division APPLICANT PARTIES: The Council of the [COMPANY] RESPONDENT [NAME]: 042001 HEARING DATES: 10/06/2004 SUBMISSIONS CLOSED: 06/10/2004 DATE OF DECISION: 10/18/2004

BEFORE: [NAME] (Deputy President); [NAME] Member; [NAME] Member APPLICATION: Costs - Professional Misconduct - breach of s. 61 of the Legal Profession Act - Professional Misconduct - fail to carry out instructions - Professional Misconduct - mislead client - Unsatisfactory Professional Conduct - delay - Unsatisfactory Professional Conduct - fail to respond to client MATTER FOR

DECISION: Principal matter Administrative Decisions Tribunal Act 1997 Administrative Decisions Tribunal Rules (Transitional) Regulation 1998 LEGISLATION CITED : Crimes Act 1900 Legal Practitioners Act 1898 Legal Profession Act 1987 [NAME] v [COMPANY], Unreported, 26 April 1990, Court of Appeal, NSW ([ID]) [NAME] v [COMPANY] [1982] 2 NSWLR 1 CASES CITED: Ex parte Lenehan (1948) 77 CLR 403 Prothonotary of the Supreme Court of New South Wales v P [2003] NSWCA 320 A Solicitor v Council of the [COMPANY] (2004) 204 ALR 8 APPLICANT REPRESENTATION: [NAME], solicitor RESPONDENT [NAME], barrister ORDERS:

1. That leave be granted to the Applicant to file this [NAME] out of time;

2. That the Respondent's current practising certificate be cancelled as from 1 January 2005;

3. That a practising certificate is not to be issued to the Respondent until the end of a period of 18 months commencing on 1 January 2005;

4. That the Respondent pay the Applicant's costs, agreed at $4,200.

Introduction 1 In this matter, the Applicant, the [COMPANY] ('[COMPANY]') laid by its Council an [NAME] against the Respondent, [NAME] ('the Solicitor'), alleging that he was a legal practitioner within the meaning of the Legal Profession Act 1987 ('the Act') and that while practising as a solicitor he was guilty of professional misconduct on three grounds (Grounds A, C and E) and of unsatisfactory professional conduct on two grounds (Grounds B and D). 2 [COMPANY] requested in the [NAME] that the Tribunal make an order that the name of the Solicitor be removed from the Roll of Legal Practitioners, an order that he pay [COMPANY]'s costs and such further orders as the Tribunal deemed fit. 3 Two of the five Grounds arose out of a complaint by a former client of the Solicitor. The remaining three Grounds arose out of complaints by [COMPANY]. 4 The Solicitor, in his Reply and in an affidavit dated 7 June 2004, stated that, subject to one matter mentioned below, he did not dispute the allegations made and particularised in the [NAME]. In the affidavit, he agreed also that the conduct alleged in each of the five grounds constituted professional misconduct or unsatisfactory professional conduct as claimed by [COMPANY]. 5 In addition, the Solicitor did not oppose an application by [COMPANY] for leave under s 44(2) of the Administrative Decisions Tribunal Act 1997 to file the [NAME] out of time. Under s 42 of this Act and rule 14 of the Administrative Decisions Tribunal Rules (Transitional) Regulation 1998, the [NAME] was required to be filed within 28 days of [COMPANY]'s resolution under s 155(2) of the Legal Profession Act that proceedings should be instituted. This resolution was taken on 11 December 2003, but the [NAME] was not filed until 23 January 2004. It was accordingly out of time by a period of 15 days, less the number of seasonal public holidays. In an affidavit in support of the application, [NAME], a solicitor employed by [COMPANY] and having carriage of this matter, testified that the delay was caused by unusual work pressures and difficulty in attending on witnesses. 6 Having found that a reasonable explanation for the delay had been furnished, as required by s 44(2) of the Administrative Decisions Tribunal Act, we granted leave to [COMPANY] to file the [NAME] out of time. 7 It was stated in the Reply and at the hearing that the Solicitor, while admitting the matters already indicated, opposed the making of the orders sought by [COMPANY]. 8 In these circumstances, it is not necessary for us to give a detailed account of the evidence tendered by [COMPANY]. Instead, we will summarise the matters alleged and particularised in the [NAME] and in relevant parts of the supporting evidence, dealing with each of the five Grounds in turn. 9 The Solicitor is now 46 years of age, having been born on [DATE]. He obtained bachelor degrees in Law and Commerce from the University of New South Wales in 1980 and was admitted as a solicitor of the Supreme Court on 10 July 1981. He is married and has three children, currently aged between 17 and 21. 10 He practised as an employed solicitor in the [NAME] of [NAME], until the end of 1983. Between 2 January 1984 and 31 December 2000, he was a partner of that [NAME]. Since 1 January 2001, he has practised as an employed solicitor in the [NAME] of [NAME], also of [NAME]. 11 The Solicitor's conduct alleged in three of the five complaints (Grounds A, C and E) occurred while he was a partner of [NAME]. The two remaining complaints (Grounds B and D) related to his conduct as a solicitor employed by [NAME]. Ground A – Complaint by [NAME] 12 As formulated in the [NAME], this Ground stated as follows:- Professional misconduct (a) Failure to carry out instructions to apply for Probate. (b) [NAME] by lying to him in relation to the progress of a Probate application. 13 The supporting Particulars indicated that the complainant, [NAME], was one of two executors of the will of [NAME], who died on 2 December 1999. Some time during that month, the Solicitor, who had prepared the will, received instructions from the executors to apply for probate. He received the death certificate from the executors late in March 2000. 14 During March 2000, the Solicitor also received instructions from the executors to act on the sale of a property owned by the estate. The agreement was subject to the condition that by 4 August 2000 probate would be obtained and the executors would be registered proprietors of the property. 15 On 6 April 2000, the Solicitor told [NAME] that the probate was under way and should be ready by 20 April. 16 Between 6 April and early August 2000, the Solicitor told [NAME] at various times that (a) the application for probate had been lodged; (b) that it had been returned with a request for clarification; and (c) that it had been lodged a second time. On 1 August 2000, he told [NAME] that he had been pursuing the grant of probate, that it was due any day and that he could not understand why it had taken so long. 17 In fact, an application for probate of the will of [NAME] was not lodged until 3 August 2000. On 4 August, however, the prospective purchaser withdrew from the purchase. In consequence, the estate suffered significant financial loss. 18 The Solicitor's failure to lodge the application until 3 August 2000 and his untruthful statements to [NAME] that it had been lodged were revealed on 8 August 2000 to [NAME], a partner of [NAME]. This followed a telephone inquiry on that day from [NAME] to [NAME], who then asked the Solicitor to explain what had been happening. The Solicitor admitted to [NAME] that he had delayed in lodging the application and had lied about the matter to [NAME]. 19 Probate was granted on or shortly before 11 August 2000. The estate subsequently claimed damages against [NAME]. [NAME] lodged his complaint with the Legal Services Commissioner on 12 October 2000. Ground B – First complaint by [COMPANY] 20 This complaint alleged unsatisfactory professional conduct by the Solicitor, taking the form of a breach of an undertaking given to [COMPANY]. In outline, the circumstances were as follows. 21 In the course of investigating the complaint made by [NAME] (Ground A), [NAME], a solicitor employed in the Professional Standards Department of [COMPANY], telephoned the Solicitor on 31 August 2001. She asked for and obtained an undertaking from him that he would provide his response to [NAME]' complaint within 14 days. In a letter to him dated 7 September 2001, she confirmed this undertaking. 22 On 27 September 2001, having received no response from the Solicitor, Ms [NAME] wrote to him, pointing this out. She indicated that if the situation was not 'corrected immediately', she would recommend that the Professional Conduct Committee make a further complaint against him concerning his breach of the undertaking that he had given. 23 On 11 October 2001, having still received no response from the Solicitor, Ms [NAME] stated in a letter to him that she would recommend to the Professional Conduct Committee at its meeting on 18 October that a notice to him under s 152 of the Act should be issued. 24 On 19 October 2001, the Solicitor forwarded to [COMPANY] his response to [NAME]' complaint. 25 In a letter dated 27 February 2003 to [COMPANY], the Solicitor acknowledged that he had not provided his response within the time stipulated in his undertaking. Ground C – Second complaint by [COMPANY] 26 As formulated in the [NAME], this Ground stated as follows:- Professional misconduct Wilful breach of Section 61 of the Legal Profession Act, 1987 with regard to the solicitor's failure to deposit a client's cheque for $3,000 to his [NAME]'s trust account. 27 The relevant parts of s 61 of the Act are as follows:- 61 Money received by solicitor on behalf of another (1) A solicitor who, in the course of practising as a solicitor in this State, receives money on behalf of another person: (a) must pay the money, within the time prescribed by the regulations, into a general trust account in New South Wales at an approved financial institution and must hold the money in accordance with the regulations relating to trust money, or (b) if the person on whose behalf the money is received directs that it be paid or delivered to a third party free of the solicitor's control, must ensure that the money is paid or delivered: (i) before the end of the next working day or, if that is not practicable, as soon as practicable after the next working day, or (ii) no later than the day allowed by the solicitor's authority or instructions (if that day is later than the day allowed under subparagraph (i)), or (c) if the person on whose behalf the money is received directs that it be paid otherwise than into a general trust account or to a third party, must pay the money as directed and (if the money is to be held under the direct or indirect control of the solicitor) must hold the money in accordance with the regulations relating to controlled money. (2) In any of those three cases, the solicitor must hold the money exclusively for, and must disburse the money in accordance with the directions of, the person on whose behalf it is held…. (8) It is professional misconduct for a solicitor to wilfully contravene subsection (1) or (2). 28 This was the most serious of the five complaints set out in the [NAME]. The circumstances were as follows. 29 During May 1999, [NAME] consulted the Solicitor about his title to a greyhound that he had recently purchased. It had been alleged to him that the title might be defective. 30 On 1 June 1999, the Solicitor contacted [NAME] in relation to proceedings brought against him with regard to the greyhound. He asked [NAME] to come to his office at [NAME], bringing a cheque for $3,000. In his affidavit, dated 10 October 2003, [NAME] stated that he was 'concerned' at this request, as he had only attended on the Solicitor for the purposes of advice and 'had not engaged him to do any work for me', but that he 'trusted the Solicitor'. 31 [NAME] wrote out a cheque as requested, making it payable to [NAME], and went to the Solicitor's office together with [NAME], his business partner and de facto spouse. 32 According to [NAME], the Solicitor told him on the telephone that the cheque was needed in order that counsel could be retained to defend the proceedings. But in his affidavit dated 7 June 2004, the Solicitor stated as follows:- I did not say to [NAME] that I wanted $3,000.00 "to engage counsel". Counsel had already been engaged, and had undertaken work on behalf of [NAME], by that time. My best recollection is that I told him that the money was required for "costs", but I acknowledge that our conversation included reference to work that had been done by the barrister that I had engaged. 33 The Solicitor, on being given the cheque by [NAME], stated that it had to be made out to a company called [COMPANY]. When [NAME] said that he did not have another cheque form with him, the Solicitor suggested that he alter the cheque that he had already made out. [NAME] substituted [COMPANY] for [NAME] as the payee and handed the altered cheque to the Solicitor. 34 According to [NAME] and [NAME] (who also swore an affidavit for these proceedings), the Solicitor told them during this meeting that [COMPANY] was 'the barrister's company' and that the cheque would have to be sent to Brisbane by express post. But in his affidavit dated 7 June 2004, the Solicitor stated as follows:- I did not say to [NAME] that [COMPANY] was "operated by the Barrister to be briefed". My best recollection is that I described the company as "another company we have", the word "we" referring to the [NAME] of [NAME]. 35 On 1 June 1999, the cheque written by [NAME] was deposited into the account of [COMPANY] at the Commonwealth Bank in [NAME]. No receipt was ever issued to him. 36 [COMPANY] was in fact a company, by then deregistered, that acted as trustee for a [COMPANY] established by the Solicitor. 37 It was submitted to us that the question whether the Solicitor's account of these events should be preferred to that of [NAME] and Mr [NAME], so far as it diverges, was relevant in relation to the Solicitor's credibility. 38 On one issue of conflict between the Solicitor and [NAME], a contemporaneous document from an independent source supports the Solicitor's version. A memorandum of fees sent on 17 February 2000 by [NAME] of Counsel to [NAME] has the heading 'Re: [NAME] ats [NAME]' and contains the following item, for which a fee of $800 was charged: '28.5.99 Appearance in District Court, Brisbane, resisting injunction'. The only other item, bearing the date 11.5.99, was for drawing a defence, for which a fee of $150 was charged. 39 This item in the memorandum appears to contradict [NAME]'s assertion that up to 1 June he had only asked the Solicitor for advice, not for any 'work' to be done. On the other hand, it accords with typewritten file notes made by the Solicitor himself. These referred to 'initial action in May 1999', which involved an application for an injunction by '[NAME]', and to 'an initial hearing the orders for which were that the Plaintiffs file a statement of claim'. 40 A handwritten note at the end of the typewritten notes is as follows: 'Johnsons have paid fees covering the barrister, [NAME] initial account & [NAME] fees to Jan 2000.' [NAME], a [NAME] which apparently acted as agents for [NAME] in this matter, rendered an account for $983.40 on 2 February 2001. This contained the statement: '1st account 4.11.99 2nd account 12.12.00.' 41 The reference to an appearance in the District Court on 28 May 1999 in [NAME]'s memorandum of fees also accords generally with an account of the matter given by the Solicitor on 20 February 2001 to [NAME], a trust account inspector employed by [COMPANY] in its Investigation Department. At one point, however, the Solicitor appeared to assert that he himself had already performed services for [NAME] for which a charge of $3,000 was justified. 42 [NAME] nor [NAME] was cross-examined before us. During cross-examination of the Solicitor, he agreed, having been shown the memorandum, that by 1 June 1999 fees were owing to [NAME]. He said that at this stage he did not know the amount of these fees. He said also that no bill of costs was rendered to [NAME] and no costs agreement had been concluded. It was not expressly put to him that his version of the matters on which his evidence conflicted with that of [NAME] and [NAME] was untruthful or otherwise unreliable. 43 In these circumstances, we are not prepared to make an affirmative finding that, with regard to these matters, the account put forward by [NAME] and [NAME] is to be preferred to that given by the Solicitor. We consider in fact that, for the reasons that we have given, [NAME]'s recollection of the extent of the services performed for him by the Solicitor during May 1999 may be faulty. The evidence suggests that by 1 June 1999 (a) a fee payable to [NAME] (subsequently charged at $800) and (possibly) fees to [NAME] as well had already been incurred on [NAME]'s behalf by [NAME], and (b) the Solicitor had performed services in relation to the proceedings against [NAME] for which fees were payable to [NAME]. 44 We accordingly do not make any adverse finding regarding the Solicitor's credibility based on the divergences between his testimony and that of [NAME] and [NAME]. Ground D – Third complaint by [COMPANY] 45 As formulated in the [NAME], this Ground stated as follows:- Unsatisfactory professional conduct (a) Failure to respond to correspondence of [NAME], solicitor. (b) Delay in accounting to [NAME], a beneficiary named in the Will of the late [NAME]. 46 The gist of this complaint was that, in the course of acting as solicitor for the estate of [NAME], who died on 23 June 2000, the Solicitor failed over a period of about nine months to pay a legacy of $20,000 plus a 1/7th share of the residue to a named beneficiary, [NAME]. 47 The Solicitor was also one of the two executors of the will of [NAME]. Probate was granted on 25 July 2001. On that date, [NAME], a solicitor instructed by [NAME], wrote to the Solicitor asking when payment might be made. [NAME] referred to an alleged statement by the Solicitor to [NAME]'s husband that probate had been granted some six months earlier. The Solicitor did not reply to this letter. 48 According to the terms of the will, the payment to [NAME] was to be made as soon as practicable after the sale of a property owned by the estate. This sale was concluded during August 2001. 49 In September 2001, the Solicitor, together with [NAME], his co-executor, distributed the bulk of the estate amongst the beneficiaries, but did not make the required payment to [NAME]. It appears that [NAME], who was the son of the testator, personally delivered cheques to the other beneficiaries, but relied on the Solicitor to make the required payment to [NAME]. 50 On 19 October 2001, 12 March 2002 and 10 April 2002, [NAME] wrote to the Solicitor, stating on each occasion that this payment had not been made and seeking an explanation. In the last of these letters, he indicated that he had been in touch with [NAME], who when told that the payment had not been made had expressed 'extreme surprise'. [NAME] also stated that the Solicitor's failure to make the payment and to reply to earlier letters had caused 'grave concern' to himself and to [NAME]. The Solicitor did not reply to any of this correspondence. 51 On 20 May 2002, [NAME], a trust account inspector employed by [COMPANY] in its Investigation Department, raised these matters with the Solicitor and with [NAME] and [NAME], who were and are the two partners in [NAME]. [NAME] ascertained from the trust account records of this [NAME] that the funds required to make the payment to [NAME] were still in the ledger account of the estate. 52 On or about 22 May 2002, a cheque for the requisite amount of $32,397.50, drawn on the trust account, was sent by [NAME] to [NAME] for payment to [NAME]. Ground E – Complaint by [NAME] 53 As formulated in the [NAME], this Ground stated as follows:- Professional misconduct Misleading: (a) Lying concerning the status of a debt collection matter. (b) The solicitor, believing the statement to be true, informed his client that an action had been commenced. After the solicitor became aware that that statement was untrue, he did nothing to inform the client of the true position. 54 The matters alleged under this Ground are relatively straightforward. The complainant, [NAME], was a director of [COMPANY] ('[NAME]'). During January 1999, he instructed the Solicitor to take action, including court action if necessary, against a debtor company, [NAME] ('[NAME]') for an unpaid debt of $4,010.20. 55 The Solicitor sent a letter of demand, dated 25 January 1999, to [NAME]. On or about 8 February, he received from [NAME] a letter disputing the debt. He then instructed an employed Solicitor in [NAME] to draft a statement of claim, while retaining control of the matter himself. 56 Subsequently, [NAME] asked the Solicitor for advice as to the progress of the matter. The Solicitor, having failed to ensure that proceedings had been instituted, told [NAME] that they had been instituted. 57 This was not in fact the case, as the Solicitor later became aware. He failed, on realising this, to advise [NAME] accordingly. 58 About a year later, [NAME] discovered that [NAME] was in liquidation. On 27 June 2000, it was deregistered. As a result of further inquiries, he realised that no judgment had been obtained by the Solicitor against [NAME] and that from a practical point of view the debt claimed against it by [NAME] was irrecoverable. 59 [NAME] lodged his complaint with the Legal Services Commissioner on 25 July 2002. He also claimed payment of the outstanding amount from the Solicitor. Evidence tendered by the Solicitor 60 As already indicated, the Solicitor did not dispute the allegations made and particularised in the [NAME]. He also did not oppose [COMPANY]'s contentions that he was guilty of professional misconduct (under Grounds A, C and E) and of unsatisfactory professional conduct (under Grounds B and D). 61 In the Solicitor's own affidavit, dated 7 June 2004, he sought to explain, though not to justify or excuse, the conduct outlined in the [NAME] and to put forward material in mitigation. 62 With reference to Ground A (failure to lodge the probate application for the [NAME] estate), the Solicitor said that, having obtained a signed probate application from the executors, he delayed in lodging it because of concerns over an estimate of the value of the deceased's interest in a specified business. He then 'developed a mental block about how best to deal with it'. His problems were exacerbated by the fact that during the relevant period – April to August 2000 – his working relationship with his fellow-partners in [NAME] deteriorated. 63 The Solicitor stated also that the claim for damages brought against this [NAME] by the complainant, [NAME], had been settled by [NAME] and that the [NAME] had paid the 'deductible' stipulated by [NAME]. He had however agreed with his former partners that in the settlement of accounts between him and them the amount of the deductible would be debited to him personally. 64 In relation to Ground B (breach of undertaking to [COMPANY]), the Solicitor's explanation was that at the relevant time – 31 August to 19 October 2001 – he was 'very much preoccupied' with criminal proceedings that he was facing in consequence of his having obtained for his own benefit the cheque for $3,000 from [NAME] (Ground C). These proceedings were instituted by summons on 21 March 2001. On or about 31 October 2001, the charge – that of obtaining money by deception, pursuant to s 178BA(1) of the Crimes Act 1900 – was dismissed in the [ADDRESS]. 65 With reference to Ground C, the Solicitor put forward both his own account of his dealings with [NAME], which we have summarised above, and some matters by way of explanation of his conduct. 66 In the latter context, the Solicitor claimed that towards the end of 1998 and during the early part of 1999, differences had emerged between himself and the two other partners in [NAME], namely, [NAME] and [NAME]. 67 During that period, the Solicitor had discovered by chance that [NAME], without his knowledge or consent, had arranged for him to receive drawings from the partnership at a lesser rate than applied to [NAME] and Mr [NAME]. He understood the reason to be that he was earning less for the [NAME] than each of them did. In consequence of this discovery, and of feeling overworked and unable to keep up with his commitments, he developed sentiments of frustration and of 'betrayal' in his dealings with his partners. 68 The result, according to the Solicitor, was that he obtained the cheque for $3,000 from [NAME] as a payment which he believed to be properly due to him personally, on account of the work that he done on behalf of the [NAME] on [NAME]'s instructions. 69 A transcript of the [ADDRESS] decision acquitting the Solicitor of the charge of obtaining money by deception was in evidence before us. The ground on which the Magistrate dismissed the charge was that the Solicitor had 'a genuine and bona fide belief in his claim of right to moneys that were due in his mind rightly or wrongly from his partners'. 70 In his affidavit, the Solicitor stated that [NAME] had continued to retain [NAME] as his solicitors and had been given credit by this [NAME] for the $3,000 that he had paid to the Solicitor. In addition, the Solicitor had agreed with his former partners that in the settlement of accounts between him and them allowance would be made for his receipt of this amount. 71 In cross-examination, the Solicitor agreed that he had adopted an entirely improper way of resolving the dispute between himself and his partners and that he should instead have paid [NAME]'s cheque into the [NAME]'s trust account. He acknowledged that, amongst other things, his conduct was likely to cause considerable embarrassment to [NAME] when in due course the [NAME] sought payment of its costs and disbursements. 72 As in the case of Ground B, the Solicitor's explanation of the conduct outlined in Ground D (delay in making a payment to [NAME] from the [NAME] and failure to reply to letters from her solicitor) was that at the time of the initial distribution from the estate to the other beneficiaries – September 2001 – he was preoccupied with the [ADDRESS] criminal proceedings against him. When asked by a Tribunal member why he did not make the payment to [NAME] or respond to the letters from her solicitor after his acquittal at the end of October 2001, he replied that he felt 'embarrassed' at having to acknowledge his previous default. 73 With regard to Ground E (misleading [NAME] as to the status of proceedings for a debt), the Solicitor said in his affidavit that instead of correcting his mistaken statement to [NAME] that the proceedings had been instituted against [NAME], he allowed himself 'to be preoccupied with other work' and 'with his personal problems within the [NAME] of [NAME]'. This default on his part commenced at some point in the first half of 1999 when, as already indicated, his relations with his partners were under significant strain. 74 The Solicitor acknowledged that, once he realised that the proceedings had not been instituted, he had 'ample opportunity' to advise [NAME] of the true position. He added:- That I did not do so is a matter [of] acute embarrassment to me in the particular context that [NAME] was a person I regarded as a personal friend. I regret to say that the fact of our friendship might have made it more difficult for me to disclose my negligence to him than might otherwise have been the case. 75 The Solicitor stated also that on or about 27 March 2003 he paid compensation of $2,599.30 to [NAME]'s company, [NAME]. This was less than the amount of the debt claimed by [NAME] ($4,010.20) because he understood [NAME] to have made a part payment of $1,410.90. 76 Annexed to the Solicitor's affidavit was a report dated 24 May 2004 by Dr [NAME], a consultant psychiatrist. [NAME] interviewed the Solicitor on 19 May 2004, having been informed of the allegations made in the [NAME] and of 'some family history'. 77 The letter instructing [NAME] stated that the conduct complained of in the [NAME] occurred between February 1999 and July 2001. This is incorrect, as the latest event referred to (in Ground D) is the Solicitor's failure to answer a letter from [NAME] dated 10 April 2002. It is not clear whether [NAME] noted this inaccuracy. 78 In his report, [NAME] stated that he had considered, but rejected, a number of possible diagnoses to explain the Solicitor's behaviour. These included Attention Deficit Disorder, psychosis, early dementia, depression and poor physical health. 79 [NAME]'s conclusion was that the Solicitor had become 'less interested' in the work that he was doing, that he had found some of the work – particularly court work – to be 'tedious' and that his failure to maintain an efficient rate of work caused him to fall behind. Further contributing factors were his disagreements with his partners in [NAME], some domestic tensions and the fact that his wife 'had had a bad year'. In consequence, he had begun to have 'as many as three or four beers in a day with perhaps more on a Friday night'. 80 [NAME] recommended that the Solicitor should 'find a branch of legal practice that did interest him', since if this were done 'he would not have any more difficulties'. 81 In the Solicitor's affidavit, he confirmed that between 1999 and 2002 his wife, [NAME], had been under heavy stress due in particular to illness and misfortunes befalling her elderly mother. He also referred to the pressures put on him by being the only member of his family who could provide care for his own mother. 82 In an affidavit dated 7 June 2004, [NAME] stated that the Solicitor had been under considerable stress at home due to 'a series of personal tragedies' and that the problems that they had experienced had 'tested both our marriage and our self belief'. She said also that the worst of their problems were behind them and that he had the benefit of strong emotional support from their three children. 83 In the Solicitor's affidavit and in oral evidence, he indicated that since his move to [NAME] at the beginning of 2001, his practice involved less litigation and a higher proportion of conveyancing and commercial matters, which he found more congenial. He also felt that in this [NAME] he could 'talk to' his employers.

For these reasons, having been 'disenchanted' at [NAME], he now felt 'more positive' about his work and less affected by stress. 84 The evidence tendered on the Solicitor's also included affidavits, both dated 7 June 2004, by [NAME] and [NAME], the two partners in [NAME]. Both deponents indicated that they had read the [NAME] and also the Solicitor's affidavit. 85 [NAME] and [NAME] both expressed the opinion that neither removal of the Solicitor from the Roll nor suspension from practice for a specified period would serve the interests of the profession or of the public. They testified that since he had joined [NAME] he had provided capable professional services for moderate fees and had consistently appeared to enjoy the trust and loyalty of his clients. They considered that he also enjoyed the respect of other members of the relatively small legal community in [NAME]. Both deponents referred to his contribution outside legal practice to community activities in [NAME] and to the personal pressures to which he had been subject. 86 [NAME] pointed out that except in the case of Ground C of the [NAME], none of the matters alleged in it involved financial or other profit by the Solicitor. Instead, they arose out of a failure to identify and acknowledge mistakes or other problems. In [NAME]'s opinion, there had been a 'dramatic improvement' in the Solicitor's 'capacity to open up to us', as he had 'learnt his lesson from his experiences'. He was 'a person of high personal integrity with flaws which he appears to be trying to address'. [NAME] also referred to the 'real damage' that would be caused to the capacity of the Solicitor and his family to remain in [NAME], if he were suspended from practice. 87 [NAME] also indicated that if [COMPANY] had concerns for the future, [NAME] could audit his files every six months, sending random letters to clients to gauge their satisfaction. The [NAME] would, he said, 'welcome any program of [COMPANY] inspection'. 88 [NAME] stated that he accepted the Solicitor's assertion that the conduct outlined in Ground C was 'of a singular and isolated nature arising out of a sense of frustration of his professional relationship at the time'. In [NAME]'s opinion, it was not 'a true indication of his character'. 89 This same opinion was echoed in an affidavit dated 28 May 2004 by [NAME], also a solicitor practising in [NAME]. Having read the [NAME] in these proceedings and a transcript of the [ADDRESS] judgment relating to the conduct outlined in Ground C, [NAME] expressed himself to have been 'stunned' when he first heard of this conduct. It was, he said, 'not the action that I would have expected of the man I have known for more than 20 years and I believe that such action is out of character'. On the basis of having had professional dealings with the Solicitor since 1981, [NAME] described him as 'a diligent and hard working practitioner', whose workload had at times been 'clearly too heavy'. 90 In an affidavit dated 25 May 2004, [NAME], a solicitor practising in Mudgee, also expressed the opinion that 'the matters set out in the [NAME] and complaint are completely out of character', particularly 'when one considers the totality of [the Solicitor's] professional career and the vast number of matters he has handled'. He said that he had known the Solicitor since they both commenced law studies at the University of New South Wales in 1976, that the Solicitor's practice and experience had been noticeably broad, that he had 'an affinity with clients' and that there were no doubts as to his honesty. 91 On the basis of having represented the Solicitor in the [ADDRESS] proceedings, [NAME] suggested that the pressures on him at the time of the conduct charged, being occasioned in part by his feeling of grievance against his partners in [NAME], had impaired his judgment and his work performance and made him 'significantly depressed'. Furthermore, the Solicitor's 'character trait of not wishing to trouble or involve other persons exacerbated this situation and [led] to him not seeking the professional help and assistance he should have'. 92 In addition, [NAME] referred to an 'outpouring of relief' that he observed in 'so many persons at [NAME] after the [ADDRESS] charges were dismissed'. His affidavit continued:- Many people subsequently confided in me, details of assistance and help [the Solicitor] had provided them at difficult periods of their life. This assistance was not confined to just legal problem solving and I think demonstrates the concern [he] has for his clients' welfare, not only at a business level, but also on a personal level. 93 Eight other affidavits from clients or former clients of the Solicitor were tendered. The deponents all testified to being aware of the matters alleged in the [NAME]. Their occupations were diverse: a land developer, a building contractor, an accountant, a real estate agent, a town planning consultant, a civil engineer, a school principal and a stock and station agent. All of them testified to his competence, diligence and commitment as a solicitor and to his contribution in other spheres to the local community. 94 One of these affidavits, sworn on 7 June 2004, was by [NAME], the complainant in Ground C. He stated that he 'was and still am upset' that his matter had not been dealt with properly. He confirmed that he had received compensation for the money that had been owed to his company. He said that he had known the Solicitor for many years and that they still often see each other socially despite their 'differences'. His affidavit concluded as follows:- I regard [the Solicitor] as a decent and hard working person who has done something he regrets. I feel [he] is an honest person who should be allowed to continue to work as a solicitor. Submissions on behalf of [COMPANY] 95 [NAME], appearing for [COMPANY], submitted that the serious deficiencies of conduct outlined in the five Grounds left no alternative to us but to order under s 171C(1)(a) of the Act that the Solicitor be struck off the Roll. He also sought an order for costs, under s 171E. 96 He argued that continuing unfitness for practice was demonstrated by a number of features of this conduct. One was that it included an instance of wilful contravention of the statutory duty of solicitors to pay money received on behalf of a third party into a trust account. Another was that it comprised several incidents spanning a period of about three years. Furthermore, the most recent manifestation of the Solicitor's failure to maintain appropriate standards occurred not much more than two years ago. 97 With reference to the first of these considerations, [NAME] drew our attention to passages in the judgment of [NAME] in [NAME] v [COMPANY], Unreported, 26 April 1990, Court of Appeal, NSW ([ID]). This case concerned a solicitor who for his own purposes withdrew from his trust account funds belonging to his sister and to a trust for which he acted. He was found, amongst other things, to have wilfully contravened s 41(1) of the Legal Practitioners Act 1898 (the forerunner of s 61(1) of the present Act). 98 Having summarised these matters, [NAME] went on ([ID] at 3):- The result is that in both of the cases complained of, the [[COMPANY] has shown misuse by the appellant [solicitor] of the moneys received by him on behalf of other person. What follows? … Such a finding ordinarily requires removal from the roll. The research of neither counsel before the Court could produce a single case in which, following a finding of misappropriation of trust funds or wilful contravention of s 41(1) of the Act, the Court had not proceeded to remove the name of the practitioner from the roll of practitioners. 99 The President then referred to an unreported decision of the Solicitor's Statutory Committee in 1981, in which a solicitor named [NAME], who had withdrawn funds from his trust account, was not struck off, but was suspended for two years and reprimanded. The Committee found that there were significant extenuating circumstances. Having observed that he considered this case to be 'wholly exceptional', [NAME] went on (at 4):- True, each case must depend on its unique facts. But for the reasons which I have stated, the normal consequence of the misuse of entrusted funds by a solicitor, and a finding of wilful breaches of the statutory prohibition in that regard, is removal of the name of the solicitor from the roll. 100 At 5, [NAME], citing a dictum of the majority of the High Court in Ex parte Lenehan (1948) 77 CLR 403 at 422, drew attention to the fact that a solicitor who had been struck off for pecuniary dishonesty could in appropriate circumstances be reinstated. 'Restoration', he said, 'is difficult but not impossible'. 101 The other members of the Court of Appeal, Priestley and Handley JJA, delivered judgments concurring with [NAME]'s conclusion that the solicitor's appeal against an order striking him off should be dismissed. 102 [NAME] provided a response to a submission by [NAME], counsel for the Solicitor, that in [NAME] v [COMPANY] [1982] 2 NSWLR 1 at 22, [NAME] stated that a failure, even a wilful failure, to comply with regulations regarding trust accounts did not necessarily constitute professional misconduct. [NAME]'s response was that in the relevant passage [NAME] was dealing only with what [NAME] called 'accounting breaches'. 103 [NAME] also relied on the Court of Appeal's decision in [COMPANY] v [NAME] (1994) 34 NSWLR 408. [NAME], at 444, stated that a court or tribunal, in determining what order it should make in a case of professional misconduct by a legal practitioner, must take account not only of the need to protect the public but also of the effect that its order will have on the understanding by other practitioners of the standard of behaviour required of them. In [NAME]'s submission, this consideration was just as important in a local professional community, such as that of [NAME], as within the New South Wales profession generally. 104 [NAME] further submitted as follows: (a) that the Solicitor's difficulties with his partners in [NAME] were significant, but not exceptional; (b) that the same applied to the personal and domestic problems that he had experienced during the period of his misconduct; (c) that in cross-examination he had not shown a full appreciation of the harm that his wilful breach of s 61(1), in particular, had occasioned to his [NAME], his clients and the local legal profession; (d) that the positive changes to his employment and domestic situations during the last two years were not 'fundamental', from which it followed that if his practice situation deteriorated and he became frustrated again, he might well repeat his past misconduct; and (e) that the testimonials in his favour did not greatly assist him because they were from fellow-practitioners who were close to him or from clients or former clients (for example, [NAME]) who did not appreciate the seriousness of his breach of trust account obligations. 105 At the conclusion of his address to us, [NAME] submitted that if in our opinion an order removing the Solicitor from the Roll was not warranted, we should at least ensure that there would be no repetition of past misconduct by (1) imposing restrictions on the Solicitor's practising certificate for a specified period (see s 171C(2)(g) of the Act) and (2) requiring that he undertake and complete a specified course of further legal education (see s 171C(1)(f)), which should focus on the ethical obligations of solicitors. In addition, we should order the payment of costs. Submissions on behalf of the Solicitor 106 On behalf of the Solicitor, [NAME] laid emphasis on the established principles that (a) the question whether an order of removal from the roll was appropriate depended on the particular circumstances of the case and (b) such an order required a finding that the practitioner in question was presently unfit to practise. It was not sufficient that unfitness at some past time had been demonstrated. As authorities, he cited A Solicitor v Council of the [COMPANY] (2004) 204 ALR 8 at 13, 15, 20 and Prothonotary of the Supreme Court of New South Wales v P [2003] NSWCA 320 at [17]. 107 As already indicated, he referred to the judgment of [NAME] in [NAME] v [COMPANY] [1982] 2 NSWLR 1 at 22 for the proposition that a failure, even a wilful failure, to comply with regulations regarding trust accounts did not necessarily constitute professional misconduct and therefore could not always be treated as sufficient grounds for removal from the roll. 108 [NAME] submitted that the conduct set out in Ground C did not, in substance, amount to misappropriation of [NAME]'s money. Because the Solicitor recorded the payment in his file notes, [NAME] would, he said, have received credit for it from [NAME]. It was instead a 'misapplication', prompted by the Solicitor's belief that he was entitled, as against his partners in this [NAME], to receive the payment. 109 [NAME] submitted also that, in contrast to many if not most other cases involving breaches of trust account requirements, only one such breach was committed by the Solicitor. It was an isolated incident of an unusual variety. There was no continuing course of conduct. 110 For these reasons, he argued that the present case did not fall within any general principle, such as that articulated by [NAME] in [NAME] v [COMPANY], to the effect that proof of a wilful breach of trust account requirements requires an order for removal from the roll. 111 [NAME] also submitted as follows: (a) that the total period of three years within which the Solicitor's misconduct occurred was short, when compared with his sustained record of otherwise honourable service since 1981; (b) that the changes to his professional and domestic situation in recent years gave good grounds for thinking that a recurrence of such misconduct was highly unlikely; (c) that the testimonials from his employers and from other members of a small professional community should carry significant weight; (d) that the significance of his breach of trust account obligations would not have been lost on the present and former clients who provided testimonials, having regard to their own professional and occupational duties (for example, as an accountant); (e) that the positive comments by [NAME], a complainant, illustrated the exceptional nature of the Solicitor's position; and (f) that the Solicitor had paid compensation to those who had suffered loss on account of his conduct, co-operated throughout with investigators and freely acknowledged his wrongdoing. 112 In [NAME]'s submission, the appropriate orders were that the Solicitor be publicly reprimanded (see s 171C(1)(e) of the Act), and be ordered to pay costs (under s 171E) and possibly a fine (under s 171C(1)(d)). He added that if completion of a course of further legal education was thought necessary, the Solicitor would 'submit to it'. Our conclusions 113 In determining what orders we should make, which we have not found to be an easy task, we consider it useful to record some observations of our own regarding the Solicitor's conduct. 114 [NAME] urged us to view the Solicitor's breach of s 61 of the Act (Ground C) as a single isolated act, it is also the case that under each of two other Grounds in the [NAME] – namely, Ground A and Ground E – the Solicitor made one or more statements to a client that he knew to be untrue, and took no subsequent steps to advise the client of the true position. This only became known to the client as a result of communications from a third party. 115 Furthermore, the period of time during which the Solicitor engaged in the dishonest conduct outlined in these three Grounds spanned more than a year, from a date early in 1999 (Ground E) to August 2000 (Ground A). 116 Except in the case of Ground C, the conduct described in the [NAME] appears to have stemmed from a refusal by the Solicitor to acknowledge and deal properly with past mistakes that he had made, by virtue of the embarrassment or other discomfort that this might entail. In consequence, he was prepared to defer indefinitely responding to letters from solicitors or from [COMPANY], and even to make untrue statements to clients. He displayed this characteristic – which can well be described as 'burying his head in the sand' – over a period of more than three years, from early 1999 to April 2002. 117 The explanation offered for this behaviour includes the stress occasioned by professional and personal problems that were, as [NAME] argued, significant but not exceptional. No medical or psychiatric condition was apparent. At most, he was depressed, in the layperson's sense of the word. 118 With regard to Ground C, it is in our opinion significant that the intended 'victim' of his 'misapplication' of the cheque (to adopt [NAME]'s description) was not his client, [NAME], but his partners in [NAME]. Coupled with the fact that this breach of trust account requirements was, as [NAME] urged, a single isolated incident, this would appear to us to provide grounds for treating the case as outside the proposition stated by [NAME] in [NAME] v [COMPANY], namely that 'the normal consequence of the misuse of entrusted funds by a solicitor, and a finding of wilful breaches of the statutory prohibition in that regard, is removal of the name of the solicitor from the roll' (see [99] above). 119 It is nonetheless the case that, in an entirely improper manner, potentially causing significant embarrassment to both his client and his [NAME], he paid money that was not his own into the bank account of [COMPANY]. His explanation was that he felt most aggrieved at what he thought to be unjust treatment of him by his partners, and he took advantage of what he saw as an opportunity to 'even the score' with them. 120 In the Solicitor's favour, we attach significant weight to the evidence showing that his professional and personal situation has improved markedly during the last two years and that he enjoys high respect both amongst legal practitioners in [NAME] and within the wider community. 121 We have concluded that we should accept [NAME]'s submission that an order of removal from the Roll is not warranted, though it is a measure to which we have given close consideration. But as stated by [NAME] in [COMPANY] v [NAME] (1994) 34 NSWLR 408 at 444, we must take careful account of the effect that our order will have on the understanding by practitioners of the standard of behaviour required of them. 122 In our judgment, neither an order imposing a restriction for a specified period on the Solicitor's practising certificate (which would do no more than require him to maintain for that period his current status as an employed solicitor) nor a fine nor a reprimand – nor indeed any one or more of these in combination – would sufficiently reflect the seriousness of the various breaches of professional standards to which he has admitted. Instead, a suspension of his practising certificate is indicated. 123 In our view, the appropriate order, in addition to the payment of costs, is that the Solicitor's current practising certificate should be cancelled under s 171C(1)(c) of the Act as from 1 January 2005 and that, pursuant to s 171C(1)(d), a practising certificate not be issued to him until the end of a period of 18 months commencing on 1 January 2005. 124 These measures will not prevent him maintaining legal employment as, for example, a managing clerk. During this period of 18 months, when he will not be subject to the significant responsibilities within legal practice that only a solicitor may undertake, it may be that his capacity to confront and deal with difficult or uncomfortable professional situations in a proper manner will improve, with the result that when he resumes his role as a practising solicitor he will be better equipped to bear those responsibilities. 125 [COMPANY]'s costs have been agreed at $4,200.

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