Barwick v Law Society of New South Wales (No. 2) (LSD)

[2003] NSWADTAP 4

Appeal Panel - Internal

CITATION:	Barwick -v- Law Society of New South Wales (No. 2) (LSD) [2003] NSWADTAP 4
PARTIES:	APPELLANT Ross Garfield Barwick RESPONDENT Council of the Law Society of New South Wales
FILE NUMBER:	029023
HEARING DATES:	08/10/2002
SUBMISSIONS CLOSED:	10/08/2002
DATE OF DECISION:	03/04/2003
DECISION UNDER APPEAL:	Law Society of New South Wales -v- Barwick and Dechnicz [2002]n NSWADT 66
BEFORE:	O'Connor K - DCJ (President); Staff C - Judicial Member; Bennett C - Member
CATCHWORDS:	adequacy of reasons - effect of errors on decisions - procedural fairness - scope of findings - relevant/irrelevant considerations
MATTER FOR DECISION:	Principal matter
FILE NUMBER UNDER APPEAL:	0002018
DATE OF DECISION UNDER APPEAL:	04/29/2002
LEGISLATION CITED:	Administrative Decisions Tribunal Act 1997 Legal Profession Act 1987
CASES CITED:	Law Society of New South Wales v Barwick and Dechnicz [2002] NSWADT 66 Barwick v Law Society of New South Wales [2002] NSWADTAP 21 Barwick v Law Society of New South Wales [2000] HCA 2 R v Solicitors’ Disciplinary Tribunal [1988] VR 757 O’Reilly v Law Society of NSW (1988) 24 NSWLR at 210 Smith v New South Wales Bar Association (1992) 176 CLR 257 Wentworth v NSW Bar Association (1992) 176 CLR 239 Bannister v Walton (1993) 30 NSWLR 699 Gad v Health Care Complaints Commission [2002] NSWCA 111 Coe v NSW Bar Association [2000] NSWCA 13 Sabag v Health Care Complaints Commission [2001] NSWCA 411 Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 Soulemezis v Dudley Holdings P/L (1987) 10 NSWLR 247 Sinha v Health Care Complaints Tribunal [2001] NSWCA 206 Rosenberg v Percival (2001) 75 ALJR 734 State Rail Authority v Earthline Constructions (1999) 73 ALJR 306 Beale v Government Insurance Office of NSW (1997) 48 NSWLR 430 Woodside & Anor v Director General, Department of Community Services (CSD) [2000] NSWADTAP 8 Law Society of New South Wales v Bannister (1993) 4 LPDR 24 (CA) Kennedy v Council of the Incorporated Law Institute of NSW (1939-40) 13 ALJ 563 Law Society of New South Wales v McNamara (1980) 47 NSWLR 72 Wilson v Law Society of New South Wales [1979] 2 NSWLR 760 Murray v Legal Services Commissioner [1999] NSWCA 70 Carson v Legal Services Commissioner [2000] NSWCA 308 Law Society of NSW v Foreman (1994) 34 NSWLR 408 In re a Practitioner [1941] SASR 48 In re a Practitioner (1982) 30 SASR 27 Dupal v Law Society of New South Wales (unreptd, 26 April 1990) Stead v State Government Insurance Commission (1986) 161 CLR 141 Dare v Pullham (1982) 148 CLR 658 Incorporated Law Institute of New South Wales v Meagher (1909) 9 CLR 655
REPRESENTATION:	APPELLANT P Brereton SC, barrister RESPONDENT G C Lindsay SC, barrister
ORDERS:	1. Appeal dismissed; 2. Appellant to pay respondent’s costs of the appeal.

REASONS FOR DECISION

1 This appellant, Ross Garfield Barwick (Mr Barwick) is a former solicitor who has been found guilty of professional misconduct in proceedings instituted by the Law Society Council under to Part 10, Division 7 of the Legal Profession Act 1987 (the Act).

2 Further he was found unfit to continue to practise. Pursuant to s 171C of the Act, the Tribunal ordered that his name be removed from the Roll of Legal Practitioners: see Law Society of New South Wales v Barwick and Dechnicz [2002] NSWADT 66 (29 April 2002).

3 Similar proceedings were instituted against his partner, Roman Alexander Dechnicz, and were heard jointly. Mr Dechnicz was found guilty of professional misconduct and found unfit to continue to practise. He also appealed, but has since withdrawn the appeal.

4 Mr Barwick’s appeal is made pursuant to s 113 of the Administrative Decisions Tribunal Act 1997 (the Tribunal Act). He seeks an order that the decision be set aside as it is vitiated by various errors of law. The notice of appeal was lodged on 24 May 2002. The Appeal Panel subsequently rejected an application for a stay of the Tribunal’s order: see Barwick v Law Society of New South Wales [2002] NSWADTAP 21 (20 June 2002).

5 The charges against Mr Barwick of which he was found guilty divide into two groups. The first refer to his dealings with clients, in particular Mrs Rosaline Margaret Fulton (Mrs Fulton), a beneficiary of an estate of which he was also the executor; and his sister, Mrs Diane Mavis Roberts (Mrs Roberts). The second refer to his responses to the investigation.

6 In relation to his dealings with his client, in summary Mr Barwick admitted that he was guilty of professional misconduct in relation to the following matters:
• his failures and delays as a solicitor in respect of the administration of a deceased estate (the estate of the late Everil May Wilkinson) of which he was also the executor and trustee (the administration commenced in early 1989),
• the misuse of the funds of the estate to benefit himself through transactions constructed as a contributory mortgage in favour of his sister (Mrs Roberts) and a loan of the whole amount from the his sister to his partner, Mr Dechnicz that had the effect of enabling Mr Dechnicz to meet personal debts (this occurred in March 1992),
• the unauthorised withdrawal of funds for that purpose from other trust accounts,
• misleading a beneficiary of the deceased estate as to the present availability of funds to which she was entitled as an heir under the will (Mrs Fulton) (from March 1992 to February 1993),
• and failing to comply with the regulations governing solicitors in the handling of trust account monies.

7 He objected only to two aspects of the particulars in support of the charges. He contested the allegation that he had engaged in the contributory mortgage transaction for his personal benefit. He submitted that it was done entirely for the benefit of Mr Dechnicz. He also objected to a particular in respect of his dealings with Mrs Fulton to the effect that he had made a ‘false’ (as distinct from misleading) representation to her.

8 The Tribunal found these particulars proven. Their reasons in relation to the finding that he made a false representation to Mrs Fulton as to the nature and purpose of a document that she was asked to sign (headed General Lending Authority) is in issue in this appeal.

Misconduct in connection with Investigation
9 Mr Barwick contested the second group of charges. It was alleged that he made several misleading representations to the Law Society and to the Tribunal, and to the Trust Account Inspector (these allegations cover the period from August 1992 to 1997). They appear at Allegation 5 (B)(f) and Allegation 7(b) of the Information, set out later in these reasons.

10 He denied that he made false statements to the Tribunal in relation to whether he knew when he arranged the contributory mortgage that the secured property (his sister’s home at Mosman) was the subject of a prior, registered mortgage in favour of the National Australia Bank. He denied that he had misled the trust account inspector by placing false and misleading documents on the Estate and Mortgage files so as to create the impression that contact had been made with Mrs Fulton and attempts made to progress the administration of the Estate.

11 The Tribunal found these allegations proven. The Tribunal’s reasons for these findings are in issue in this appeal.

12 The Tribunal, as noted, ordered that Mr Barwick’s name be removed from the roll. The appeal contends that had it not been for the findings in contest (and other findings that it is said went beyond the scope of the proceedings), the Tribunal may not have imposed such an order.

13 (It was recognised at the hearing (see closing submissions of counsel for Mr Barwick, Mr Allaway) that a negative finding on the matters that were the subject of contest would have been highly likely to lead to an order that Mr Barwick’s name be removed from the roll. Nonetheless he submitted that even if findings of these matters - one going to Mr Barwick’s fundamental honesty, as distinct from incompetence in relation to the administration of the estate – nevertheless the events were ones that occurred a long time ago, and were not likely to be repeated.)

Background
14 The principal events giving rise to the disciplinary charges against Mr Barwick were these.

15 Mr Barwick and Mr Dechnicz, who had previously been partners together in other firms, formed a new firm, Barwick, Dechnicz and Boitano on 1 December 1991. It is accepted that both Mr Barwick and Mr Dechnicz had personal financial difficulties at the time. In summary, Mr Barwick was over-committed and had insufficient income to meet his outgoings in respect of borrowings against real estate that he owned. Mr Dechnicz was not able to meet his personal debts, most importantly liabilities that he faced in paying out partners in the previous firm of which Mr Barwick and he had been members. That partnership had ended in acrimonious circumstances.

16 In March 1992, Mr Dechnicz needed money to meet the first two payments (totalling $60,000) due from him to the former partners as well as to meet other personal debts (the first payment had fallen due in February, the second was due in April). Mr Barwick and Mr Dechnicz found that money, $85,000 in the following way. Trust funds were lent on paper by way of contributory mortgage to Mr Barwick’s sister, Mrs Roberts, on the security of her title to land at Mosman (her home) but in fact given immediately to Mr Dechnicz.

17 An epitome of mortgage was created and entered in the firm register of mortgages, showing that a mortgage made up of contributions from the funds of three trust clients had been used. None of the clients had given permission. Mr Barwick has acknowledged that Mrs Roberts was merely used as a conduit.

18 One of the issues that Mr Barwick has vigorously contested relates to whether when he arranged these transactions he was aware that his sister’s home was already subject to mortgage. In January 1991 his sister had borrowed $25,000 on mortgage from the National Australia Bank. It was not contested by Mr Barwick that he had suggested to his sister that she borrow $25,000 from the Bank. His sister’s evidence, accepted by the Tribunal below, was that she had money due to her at that time from the family investment company, Mundroola Pty Ltd.

19 She wanted the money in order to pay an architect for some work done on her home. Her evidence was that she had called her brother on several occasions in December 1990 but he did not return her calls. When she finally contacted him, he admitted that he had already used her share of the money. He had suggested that so as to resolve the difficulty of paying the architect she take out a short-term loan from the Bank, which he would pay back when he had some funds.

20 On 16 January 1991, he accompanied her to the Bank to discuss the possibility. A few days later, she attended the Bank alone to sign the documentation and pick up the money. She signed a mortgage. Mr Barwick claimed that when he set up the contributory mortgage using her home as security in March 1992 he was unaware that it was already subject to mortgage.

21 Of the three trust accounts used to fund the contributory mortgage, two were seen as belonging to clients of Mr Dechnicz, and the other was under the direct control of Mr Barwick. The latter account was that of the estate mentioned earlier, that of the late Everil May Wilkinson (who had been secretary to his father, the late Sir Garfield Barwick, when he was a Minister of the Commonwealth Government). As noted, Mr Barwick was executor and trustee of the estate, as well as being the solicitor.

22 Almost all of the money remaining to be distributed, $38,000, was taken and given to Mr Dechnicz. The amount was due to be paid to two beneficiaries in equal shares, one of them being Mrs Fulton (who had been secretary to another Minister of the time, the late Sir William McMahon). There was no provision in the Wilkinson will permitting the moneys to be used in this way.

23 No additional documentation was raised at the time. An instrument of mortgage was executed at some later time, the precise date is unclear from the material. (Though the disbursement of the moneys to Mr Dechnicz from the Wilkinson Estate ($38,000) is said to have occurred on 20 March 1992, there is on the Estate file a statement of account dated 13 April 1992, rendered by Mr Barwick’s firm to Mr Barwick as executor, which states that the estate account still had in it $18,917.16 of the $38,917.16 deposited in February 1992 (see Ex F to the affidavit of Raymond John Collins filed in the Tribunal), which points towards progressive withdrawals. This matter was not addressed by the Tribunal below.)

24 No authorities were obtained from the relevant clients in advance of the loan or for some months afterwards. These irregularities were first discovered in the course of a trust account inspection on 19 August 1992.

25 The late Miss Wilkinson had died in August 1988, and her main asset, her unit at Neutral Bay, sold in December 1988. The distribution of the estate had been exceedingly slow. By early 1992 Mrs Fulton was expecting the final instalment due to her.

26 When that did not occur, not surprisingly she frequently called Mr Barwick’s office. It was not until 16 February 1993, according to her, that she first learnt that the $38,000 (of which $19,000 was due to her) had been lent out. She was furious, and after her husband phoned Mr Barwick on 22 February 1993 and threatened to report him to the Law Society, Mr Barwick took steps to find the money. It was, of course, no longer available from the trust account, and the evidence was that he found the money from the firm’s office account. He gave Mrs Fulton a cheque for $19,000 plus interest, on 26 February 1993.

27 The circumstances surrounding his dealings with Mrs Fulton were the subject of a number of charges. Mr Barwick vigorously denied that he only first told Mrs Fulton on 16 February 1993 what had happened to the $19,000 due to her. As noted earlier, he also vigorously contested charges relating to the obtaining of her signature to a document headed ‘General Lending Authority’ on 26 February 1993.

28 After noting on 19 August 1992 that a contributory mortgage involving the use of trust funds had been arranged, and the moneys lent to an associate of the firm (i.e. Mrs Roberts as a sister to Mr Barwick), the trust account inspector formally asked Mr Barwick a number of questions. Mr Barwick failed to respond promptly. He ultimately gave a considered response by letter dated 11 February 1993. The response was clearly inadequate.

29 A further trust account inspection was due to occur in May 1993. It is in this context that the other key allegation vigorously contested by Mr Barwick before the Tribunal arose. Early in April 1993 in anticipation of the trust account inspection he was found by the Tribunal to have provided documents to the office manager, Mrs Motra Hayward (a step-sister of Mr Dechnicz), that were false and purported to record contact between him and Mrs Fulton consistent with his version of events. It was also alleged that he directed her to create formal documents (such as general lending authorities) and back-date them, and place them on the file.

30 In a letter dated 12 May 1993 he provided a response to the concerns of the Law Society. In that letter he gave a history of his dealings based, in part, on records now found to have been falsified, and added to the relevant files to give a less unfavourable picture of his mishandling of the estate.

31 Mr Barwick’s reliance on his sister, Mrs Roberts, to keep the firm afloat during the period from 1992 to 1994 also forms part of the background to a number of the charges. The new firm’s overdraft limit with the National Australia Bank was constantly being increased.

32 Mrs Roberts, for some time without any independent advice, gave security by way of mortgage or guarantee to the National Australia Bank for the firm’s operating overdraft, commencing at $45,000 in April 1992, leading to her original mortgage liability of $25,000 being increased to $70,000. By 15 August 1993 the overdraft had reached $365,000 for which her home continued to be the security.

33 Separately in February 1993, she had allowed a family property at Bendalong in which she had an interest to be used as security for a loan to her of $95,000 from the St George Bank. Her evidence, accepted by the Tribunal below, was that she did not see any of that money, apart from $1000 or $2000, as it was used by Mr Barwick and Mr Dechnicz to restore the $85,000 and interest to the trust accounts that had been used for the contributory mortgage transaction of March 1992.

34 In May 1994 the overdraft and related mortgages and guarantees were taken over by the Macquarie Bank. By this point Mrs Roberts was in receipt of independent legal advice. She was keen to return to the situation she had enjoyed at Mosman before January 1991 of having an unencumbered home.

35 In 1994 she decided to sell Mosman, which she did in September. She bought in St Ives. She asked her brother to give her a clear title to Mosman, so that she could go to St Ives without any debt.

36 She had expected to get a clear title prior to settling on St Ives. Two days prior to settlement in November 1994 her brother informed her for the first time that he would be unable to provide a clear title to clear the title to Mosman, and that she would have to commit to a mortgage (the overdraft had escalated to $365,000) over St Ives. She was extremely upset (see further affidavit, Ex T, Annexure B, before the Tribunal).

37 Ultimately, but only after she commenced Supreme Court proceedings, was Mrs Roberts paid out by her brother. This followed the development and sale by Mr Barwick of land he owned at Bungan Head.

38 The Law Society resolved to institute disciplinary proceedings against Mr Barwick in 1995. The matter came on for hearing before the then Tribunal, the Legal Services Tribunal, in 1997. The proceedings were stayed pending the outcome of challenges to the procedures for laying the charges adopted by the Law Society. These proceedings were successful, with the result that the Tribunal was found to be without jurisdiction: Barwick v Law Society of New South Wales [2000] HCA 2.

39 A new Information was filed and the hearing proceeded on the basis of the information as amended, in light of the admissions and non-admissions in the amended reply. That hearing commenced on 28 May 2001 and took 14 days.

40 The charges were essentially similar to those that formed the basis of the earlier proceedings. There was one additional charge.

41 The additional charge relating to the making of a false statutory declaration about his knowledge of the prior mortgage (the loan of $25,000) when he created the contributory mortgage was a new one, as it related to evidence he filed in the first proceedings: Ground 5B(f) of the amended information.

42 In that statutory declaration, Mr Barwick had stated:

‘48. In or about the latter part of March [1992] there was a conversation between Mrs Roberts, Mr Dechnicz and me, during which words to the following effect were said:

Myself: Roman is raising some money to meet some commitments and there will be a number of lenders. If we’re going to raise money we need to be able to secure it on property. I can’t help at the moment.

Mrs Roberts: That’s OK, you can use my title. The title to the property is with the Bank.

Mr Dechnicz: Well I’ll deal with the paper work then and contact you to arrange finalising the transaction.

….

‘55. During the conversation referred to in paragraph 48 there was no mention of Mrs Roberts' property being subject to a first mortgage, and I was not aware of this fact at this time. I understand at the time of the said conversation that Mrs Roberts would be, in effect, a third party guarantor of the loan to Dechnicz, and would secure the guarantee with her property.

56. Some time later, so far as I can recall after the transaction had settled, I had a conversation with either Dechnicz or Motra Hayward during words to the following effect were said:

Dechnicz/Motra Hayward: Can you find about the title deed of the Mosman property.

As a result of this conversation I had a conversation with my sister Di Roberts during which words to the following effect were said:

Myself: What’s the position concerning the Mosman title deed at the Bank?

Mrs Roberts: I thought the Bank held the title deed in safe keeping but had overlooked the fact that I must have signed some security documents in favour of the Bank at an earlier time. I owe them $20,000.

I had not previously known that the property was subject to a prior mortgage.’

43 In addition to their affidavit evidence, Mrs Hayward, Mrs Fulton and Mrs Roberts each gave oral evidence at hearing and were cross-examined closely.

44 The Amended Information was not pursued in its entirety by the Law Society. Some charges were withdrawn. At hearing the Tribunal refused to admit any evidence on one charge, that contained in particular (iv) of Allegation 7(b), which related to Mr Barwick’s conduct in respect of the other heir, the Lenihan Estate. As noted earlier, in the case of all other charges, Mr Barwick was found guilty.

45 The terms of the charges as contained in the Amended Information follow:

1. The Legal Practitioner, Mr Barwick, was guilty of neglect, delay and incompetence in the administration of the estate of the late Everil May Wilkinson (“the Deceased”).


PARTICULARS

(a) The Deceased (who, before her death, was a client of the Legal Practitioner) died on or about 3 August 1988, leaving as her last will and testament a Will dated 23 February 1978, probate of which was granted to the Legal Practitioner (as the sole executor and trustee named in the Will) on 10 March 1989.

(b) There was no justification for any delay in the administration of the estate of the Deceased.

(c) At no material time was the Legal Practitioner authorised (by the terms of the Will or otherwise):

(i) to lend money comprising an asset of the estate of the Deceased on the security of a contributory mortgage; or

(ii) to apply estate assets for his own personal benefit.

(d) On or about 20 March 1992 (after all estate assets had been realised) the Legal Practitioner, purporting to act as the executor of the estate of the Deceased but without any proper authority so to act, ostensibly lent $38,000.00 belonging to the estate of the Deceased to his sister Mrs Diane Mavis Roberts (“Mrs Roberts”), but for his own personal benefit, on the security of a contributory mortgage bearing that date.

The total amount of the mortgage debt (namely, $85,000.00) was expressed by the mortgage to be repayable on 20 March 1993. Interest was payable under the mortgage at quarterly intervals, the first payment of which interest was due on 20 June 1992.

(e) The moneys ostensibly lent to Mrs Roberts (namely, $85,000.00) were on-lent by her to the Legal Practitioner personally. He used those moneys to meet a personal obligation he owed to Mr Roman Alexander Dechnicz (“Mr Dechnicz”) arising from his entering into partnership with Mr Dechnicz. At the direction of Mr Dechnicz the moneys were disbursed as follows:

(i) $60,000.00 was paid to discharge a debt due by Mr Dechnicz to Messrs Smits Leslie Barwick, solicitors, in relation to the winding up of that firm (of which the Legal Practitioner had been a member);

(ii) $10,000.00 was paid to the State Bank in relation to money payable by Mr Dechnicz; and

(iii) $15,000.00 was paid to Messrs Esplins, solicitors, for professional fees due to them from Mr Dechnicz.

(f) The mortgage was never registered or protected by lodgment of a caveat.

(g) At all material times the land was the subject of a registered mortgage (No. Z491969) in favour of the National Australia Bank Limited.

(h) The mortgage was not stamped until 10 November 1992, following the intervention of a Trust Account Inspector of the Law Society of New South Wales.

(i) Interest was not paid in accordance with the mortgage. In particular, the interest due on 20 June 1992 (before the intervention of the Trust Account Inspector of the Law Society) was not paid when due.

(j) The Legal Practitioner did not:

(i) keep Mrs Rosaline Margaret Fulton (“Mrs Fulton”), a residuary beneficiary named in the Will of the Deceased, fully informed of the progress of, and developments in, the administration of the estate; or

(ii) account to her promptly for moneys payable to her from the estate. In particular:

(A) The Legal Practitioner failed to obtain Mrs Fulton’s consent to, or approval of, the loan of estate moneys to Mrs Roberts (or his interest as a borrower from Mrs Roberts) before such moneys were so lent.

(B) The Legal Practitioner failed to disclose the loan to Mrs Fulton until 25 February 1993 or thereabouts when he secured her signature on a document (entitled “General Lending Authority” and dated 24 August 1992) as a condition of estate moneys being distributed to her on or about 26 February 1993.

(C) The Legal Practitioner at no time gave advice to Mrs Fulton as to the nature of a contributory mortgage, the details of the mortgage transaction (including the application of the loan moneys) or his personal interest in the proceeds of the mortgage advance.

(D) The Legal Practitioner did not promptly pay to Mrs Fulton moneys payable to her under the Will of the Deceased. Nor did he disclose to her that moneys paid to her were paid, at least in part, from the office account of the firm of which he was a partner.

[The Legal Practitioner caused Mrs Fulton to be paid $50,000.00 on or about 11 December 1989; $25,000.00 on or about 15 February 1990; and $20,918.05 on or about 26 February 1993.]

(E) The Legal Practitioner failed to respond promptly to inquiries made by Mrs Fulton.

(k) The Legal Practitioner was guilty of neglect, delay and incompetence in that:

(i) he failed to attend within a reasonable time to the conduct, and completion, of the administration of the estate of the Deceased.

(ii) without any authority so to do, he (via the loan to Mrs Roberts, on-lent to himself) applied estate moneys for his own personal benefit.

(iii) without any authority so to do, he lent estate moneys without proper security.

(iv) he failed to ensure that the contributory mortgage granted by Mrs Roberts in respect of the loan to her was duly stamped and registered or protected by caveat as a first charge on the land mortgaged or at all.

(v) he failed to ensure that interest on the loan transactions made for his personal benefit was paid when it fell due under the mortgage.

(vi) he failed to obtain the fully informed consent of Mrs Fulton to the loan transactions and failed to attend promptly to her enquiries about the estate of the Deceased.

1. The Legal Practitioner preferred his own interests over the interests of Mrs Fulton, to whom (as the executor and trustee of the estate of the Deceased and a solicitor acting in the administration of the estate) he owed fiduciary obligations.


PARTICULARS

(a) The Law Society repeats sub-paragraphs (a)-(j) inclusive of the particulars set out in paragraph 1 above.

(b) The Legal Practitioner preferred his own interests over the interests of Mrs Fulton (a residuary beneficiary in the estate of the Deceased) in that:

(i) without any justification for delay, he failed to attend within a reasonable time to the conduct, and completion, of the administration of the estate of the Deceased.

(ii) he applied estate assets for his own personal benefit (via the loan to Mrs Roberts, on-lent to himself).

(iii) he failed to protect the interests of the estate by ensuring the provision of proper, authorised security and compliance with the terms upon which interest was payable on the loan to Mrs Roberts.

(iv) he failed to obtain the fully informed consent of Mrs Fulton to his application of estate moneys.

2. The Legal Practitioner misled Mrs Fulton about the application of assets of the estate of the Deceased for his own benefit.


PARTICULARS

(a) The Law Society repeats sub-paragraphs (a)-(j) inclusive of the particulars set out in paragraph 1 above.

(b) The Legal Practitioner misled Mrs Fulton in that:

(i) at a time when Mrs Fulton was to his knowledge concerned about delays in the administration of the estate of the Deceased, he failed to disclose to her that estate moneys had been applied (via a loan to Mrs Roberts, on-lent to himself) for his own personal benefit.

(ii) in submitting the “General Lending Authority” dated 24 August 1992 to Mrs Fulton for her signature on 25 February 1993 or thereabouts:

(A) The Legal Practitioner falsely represented to Mrs Fulton that the document related to the release of estate moneys, by way of distribution, to her.

(B) The Legal Practitioner failed to explain to Mrs Fulton that the documents purported to be an authority for the investment of estate moneys which he proposed to produce to the Law Society as evidence that she had ratified his loan of estate moneys to his sister, Mrs Roberts.

(C) The Legal Practitioner failed to explain to Mrs Fulton that, notwithstanding the form of clause 1 of the document (which purported to authorise an investment secured by a registered mortgage), estate moneys had been lent on the security of a mortgage which had been neither registered nor protected by caveat.

(D) The Legal Practitioner failed to explain to Mrs Fulton that, notwithstanding the form of clause 8 of the document (which purported to record an understanding that estate moneys would not be lent to the Legal Practitioner, or an associate of the Legal Practitioner, or a borrower in which the Legal Practitioner had a financial interest), estate moneys had been lent to his sister, and on-lent by her to him, for his personal benefit.

3. In providing for his sister, Mrs Roberts to borrow moneys from clients of the firm of solicitors of which he was a partner (including the estate of the Deceased) the Legal Practitioner:

(a) failed to comply with clause 27(2) of the Legal Profession Regulation 1987.


PARTICULARS

(i) The Law Society repeats sub-paragraph (a), (c) and (d) of the particulars set out in paragraph 1 above.

(ii) Mrs Roberts was a sister of the Legal Practitioner.

(iii) Mrs Roberts was an associate of the Legal Practitioner within the meaning of clause 27(2) of the Legal Professional Regulation 1987 (by reference to the definition of “associate” in clause 2 of the Regulation, and sections 60(2)(e) and 60(3)(c) of the Legal Profession Act 1987).

(iv) The firm in which the Legal Practitioner and Mr Dechnicz were partners were acting as solicitors for each of:

(A) the estate of the Deceased, in the administration of the estate;

(B) James Mottram (“Mr Mottram”); and

(C) Zdan Kolomyjec (“Mr Kolomyjec”) and Taras Figol (“Mr Figol”) as trustees of the estate of the late Lubomyr Slepkowycz (also known as Sklepkolycz).

(v) Each of the estate of the Deceased, Mr Mottram, Mr Kolomyjec and Mr Figol, was a “client” of the Legal Practitioner within the meaning of clause 27(1) of the Legal Profession Regulation 1987.

(vi) None of:

(A) the estate of the Deceased;

(B) Mr Mottram;

(C) Mr Kolomyjec; or

(D) Mr Figol,

was within the category of persons described in the Table referred to in clause 27(2)(a) of the Legal Profession Regulation 1987.

(vii) On or about 20 March 1992 Mrs Roberts, on the security of a contributory mortgage bearing that date, ostensibly borrowed $85,000.00, contributed by the following lenders:

(A) The Legal Practitioner (in his capacity as the executor and trustee of the estate of the Deceased) in the sum of $38,000.00.

(B) Mr Mottram in the sum of $20,000.00.

(C) Messrs Kolomyjec and Figol (in their capacity as trustees of the Slepkowycz Estate) in the sum of $27,000.00.

(viii) On or about 20 March 1992 the moneys ostensibly borrowed by Mrs Roberts were lent by her to the Legal Practitioner in his personal capacity and applied by him to meet obligations he owed to Mr Dechnicz, as asserted in sub-paragraph (e) of the particulars set out in paragraph 1 above.

(ix) Neither at the time of the loan to Mrs Roberts nor at such other time as may be material did the Legal Practitioner obtain, or take steps to have obtained, in respect of the loan a certificate of independent advice (Form 2) for which provision was made in clause 27(2)(c) of the Legal Profession Regulation 1987.

(x) The Legal Practitioner failed to comply with clause 27(2) of the Legal Profession Regulation 1987 on or about 20 March 1992 in that he provided for Mrs Roberts (an associate of the Legal Practitioner) to borrow the sum of $85,000.00 (in amounts contributed as set out above) from clients of the Legal Practitioner without ensuring that each of the clients received the benefit of full disclosure of the relationship of Mrs Roberts to the Legal Practitioner and independent legal advice generally.

(b) failed first to obtain from Mrs Fulton, and from Mr Mottram and Messrs Kolomyjec and Figol (ostensibly lenders to Mrs Roberts), an authority in writing as required by clause 32(1) of the Legal Profession (Trust Accounts and Controlled Money) Regulation 1988


PARTICULARS

(i) The Law Society repeats sub-paragraphs (a), (d) and (e) of the particulars set out in paragraph 1 above, and sub-paragraphs (ii), (iv), (vii), and (ix) of the particulars set out in sub-paragraph 4(a) above.

(ii) On or about 20 March 1992 and at such other times as may be material Mrs Roberts was an associate of the Legal Practitioner within the meaning of clause 32(1) of the Legal Profession (Trust Account and Controlled Money) Regulation 1988 (by reference to the definition of “associate” in clause 3(1) of the Regulation, and sections 60(2)(e) and 60(3)(c) of the Legal Profession Act 1987).

(iii) Neither at the time of the purported loan to Mrs Roberts nor at such other time as may be material did the Legal Practitioner obtain from the lenders to Mrs Roberts an authority in writing as required by clause 32(1) of the Legal Profession (Trust Accounts and Controlled Money) Regulation 1988.

(iv) Accordingly, the Legal Practitioner failed to comply with clause 32(1) of the Legal Profession (Trust Accounts and Controlled Money) Regulation 1988 on or about 20 March 1992.

(c) by his failure to comply with clause 32(1) of the Legal Profession (Trust Accounts and Controlled Money) Regulation 1988, wilfully contravened section 61(1)(b) of the Legal Profession Act 1987.


PARTICULARS

(i) The Law Society repeats the particulars set out in paragraph 4(b) above.

(ii) The fact that the moneys ostensibly lent to Mrs Roberts were on-lent by her to the Legal Practitioner to meet personal obligations owed by him to Mr Dechnicz is relied upon by the Law Society in the characterisation of the Legal Practitioner’s contravention of section 61 of the Legal Profession Act 1987 as “wilful”.

(d) failed to comply with clause 33 of the Legal Profession (Trust Accounts and Controlled Money) Regulation 1988 (which provided for the preparation, issue and recording of a prescribed form of epitome of mortgage).


PARTICULARS

(i) The Law Society repeats sub-paragraphs (i) and (ii) of the particulars set out in paragraph 4(b) above.

(ii) Neither on or about 20 March 1992 nor at such other time as may be material did the Legal Practitioner prepare, issue or record in an Investment Register kept by the Legal Practitioner a prescribed form of epitome of mortgage in accordance with clause 33 of the Legal Profession (Trust Accounts and Controlled Money) Regulation 1988.

(iii) Accordingly, the Legal Practitioner failed to comply with clause 33 of the Legal Profession (Trust Accounts and Controlled Money) Regulation 1988.

(e) by his failure to comply with clause 33 of the Legal Profession (Trust Accounts and Controlled Money) Regulation 1988,wilfully contravened section 62 of the Legal Profession Act 1987.


PARTICULARS

(i) The Law Society repeats the particulars set out in paragraph 4(d) above.

(ii) The fact that the moneys lent to Mrs Roberts were on-lent by her to the Legal Practitioner and applied by the Legal Practitioner to meet Personal obligations owed by him to Mr Dechnicz is relied upon by the Law Society in the characterisation of the Legal Practitioner’s contravention of section 62 of the Legal Profession Act 1987 as “wilful”.

4. The Legal Practitioner made representations to the Law Society of New South Wales which were misleading and attempted thereby to mislead each of the Law Society and the Legal Services Tribunal.


PARTICULARS

(A) In relation to Mrs Fulton

(a) The Law Society repeats sub-paragraphs (a), (c) and (d) of the particulars set out in paragraph 1 above.

(b) The Legal Practitioner did not obtain Mrs Fulton’s consent to, or approval of, the loan of estate moneys to Mrs Roberts (or his interest as a borrower from Mrs Roberts) before such moneys were so lent.

(c) On or about 12 May 1993, by a letter bearing that date, and written in the course of an investigation leading to the filing of the Information in these proceedings the Legal Practitioner represented to the Law Society that, by her execution of a document entitled “General Lending Authority” and dated 24 August 1992, Mrs Fulton had ratified his conduct on or about the date of that document.

The representation that Mrs Fulton had ratified the conduct of the Legal Practitioner was express. The representation that she had ratified the conduct of the Legal Practitioner on or about the date of the “General Lending Authority” was implied from the assertion of ratification; the production of the document to the Law Society bearing the date 24 August 1992; and the absence of any suggestion that the document was executed otherwise than on the date it bore.

(d) These representations were false in that:

(i) the document entitled “General Lending Authority” was executed by Mrs Fulton on or about 25 February 1993, not on 24 August 1992 or thereabouts; and

(ii) Mrs Fulton’s execution of the document did not constitute ratification of conduct of the Legal Practitioner, particularly (but not only) as the Legal Practitioner, in obtaining her execution of the document, failed to obtain her fully informed consent to the loan transactions which had been effected by him on or about 20 March 1992.

(B) In relation to Matters Generally

(f) By the Statutory Declaration made by him in the same Tribunal proceedings on 2 May 1997 (“the Second Statutory Declaration”) the Legal Practitioner made misleading representations to the Law Society in that, by paragraphs 55 and 56 of the Second Statutory Declaration, he represented that he was not aware in the latter part of March 1992 (when discussing with Mrs Roberts and Mr Dechnicz the availability of her Mosman property as security for borrowings by Mr Dechnicz and himself) that the property was subject to a first mortgage. However, the first mortgage (in favour of the National Australia Bank) had been negotiated with the Bank by the Legal Practitioner in or about January 1991 in order to raise moneys for Mrs Roberts when the Legal Practitioner was unable to account to her for moneys due to her from Mundroola Pty Ltd but used by him.

7. The Legal Practitioner attempted to mislead the Trust Account Inspector:-

(b) with respect to the conduct of the Wilkinson Estate:

(i) The matter of the Wilkinson Estate (under reference in the first complaint, above) and the contributory mortgage advance to Roberts had become a mater of interest to the Society’s Trust Account Inspector and was the subject of his reports dated 19 August 1992 and was the subject of further enquiry.

(ii) The Legal Practitioner was aware of the delay in the administration of the Estate and the concern with the delay expressed by Mrs Fulton, the residual beneficiary, from time to time.

(iii) On or about 5 April 1993, the Legal Practitioner gave instructions to his employee, Motra Hayward, (in the circumstances set forth in the affidavit sworn by her on 1 May 2001 and comprising 39 paragraphs) to place false or misleading documents on the files relating to the Wilkinson Estate and the Mortgage Advance to Roberts in such a manner as to lead an uninformed observer to believe, amongst other things, that certain communications had occurred with Mrs Fulton and that certain efforts had been made to progress the administration of the Estate.

The documents included:

(a) Notes of telephone messages to Mrs Fulton explaining continuing delays

(b) File copy letter to the executor of the Estate of the Late Eileen Gertrude Lenehan seeking a copy of the Death Certificate for Eileen Gertrude Lenehan and evidence of the death of Kathleen Winifred Lenehan.

(c) Documents dictated by the Legal Practitioner (and reproduced as annexures “MH-1” TO “MH-O” of Ms Hayward’s affidavit).

The Appeal
46 The appeal was heard on 8 October 2002. Some of the grounds of the notice of appeal were not pressed. An application, contained in the notice of appeal, for leave to extend the appeal to the merits was withdrawn. The appeal was restricted to an appeal alleging errors of law. (This was said to have implications for the scope of any order the Appeal Panel can make in the event that material error is found, the most significant being that it must remit the matter for further determination rather than finalise it itself.)

47 Ultimately there were three types of legal error that were said to have occurred: denial of procedural fairness; failure to give adequate reasons for decision; and miscarriage of the discretion as to the order.

48 As noted earlier, Mr Barwick, has sought throughout these proceedings a disciplinary order short of removal from practice as the appropriate response to his misconduct. The Law Society made a general submission relevant to all points of appeal that even if the Appeal Panel were to find error in that one or more of the points of appeal were made out, it remained necessary for the Panel to satisfy itself that error or errors were of sufficient materiality and significance to have been likely to have affected the order that was made, especially when so many matters of misconduct had been admitted.

Procedural Fairness: Findings allegedly contrary to prosecutor’s submissions.
49 Mr Barwick contends that the Tribunal erred in law by denying him procedural fairness:


(i) in that the Tribunal gave no notice of its intention to proceed to make findings in respect of Ground 5(B)(f) [false declaration to Tribunal] when the Law Society had indicated that it did not press the Ground;

(ii) in that the Tribunal gave no notice of its intention to proceed to make findings in respect of Ground 3(b)(ii)(A) [false statement to Mrs Fulton] when the Law Society had indicated that it did not press the Ground;

(iii) in making a finding that went beyond the scope of the Particulars and was not put to Mr Barwick, being that contained at para [320] reasons, where the Tribunal said that ‘it was satisfied that there had been a systematic and deliberate course of conduct by Mr Barwick designed to protract the finalisation of the Wilkinson estate in particular until such time as his sub-division [the Bungan Head development] had been completed and funds became available to him’; and

(iv) took into account as part of the relevant conduct of Mr Barwick for the purpose of its order: (a) that he had given false evidence in respect of the alleged falsification of the Wilkinson Estate and Mortgage Advance loan files; (b) deliberately concealed the contributory mortgage from the National Australia Bank; and (c) made false declarations to the Tribunal.


50 Objections (i) and (ii) under this heading raise the same point of law.

51 As is conventional in disciplinary proceedings, these proceedings were conducted on the basis of a fully particularised Information with, in this case, several Grounds alleged upon each of which a finding of Professional Misconduct was sought. Prior to the commencement of the proceedings, the Informant and prosecutor, the Law Society, had withdrawn some charges (in particular those contained under Ground 6 and Ground 7(a)).

52 The hearing was conducted on the basis that the matters raised by all other Grounds were in issue. As noted there were several matters that were admitted. Nonetheless the charges not admitted by Mr Barwick were ones of great seriousness in terms of his character and his continued fitness to practise, and led to there being several days of oral evidence (from Mrs Fulton, Mrs Hayward, Mrs Roberts and from Mr Barwick himself) in addition to the evidence already filed by way of affidavits.

53 The Law Society, in reply, denied that either Ground had been withdrawn from consideration by the Tribunal. The Society acknowledged that in final written submissions it had submitted that the prudent course was for the Tribunal to find that the Ground 5(B)(f) (false declaration as to awareness of the 1991 mortgage) had not been established on the evidence; and that in relation to Ground 3(b)(ii)(A) (false representations in respect of the general lending authority given to Mrs Fulton) the Law Society stated that it did not intend the Ground to convey an allegation that Mr Barwick had represented to Mrs Fulton that the execution of the General Lending Authority by her was a condition precedent to her receipt of moneys.

54 Mr Barwick’s counsel characterised these statements as being indications by the Law Society that the grounds were no longer pressed. Accordingly it was a denial of procedural fairness to go on and consider them, and for the Tribunal not to inform Mr Barwick that it intended to do so. This characterisation overstates the position expressed by the Law Society in respect of both grounds. In the case of Ground 5(B)(f) there was a submission as to the weight to be given to the evidence; in the case of Ground 3(b)(ii)(A) there was merely a submission as to how certain evidence should be construed.

55 The Tribunal dealt at [97] to [113] of its reasons with Ground 5(B)(f) under the heading ‘The Prior Mortgage’; and found the Ground established. The Tribunal dealt at [349] to [352] of its reasons with Ground 3(b)(ii)(A) and found that Mr Barwick intentionally misled Mrs Fulton as to the document she was signing. It stated in addition – ‘Certainly he did not make full disclosure.’

56 Mr Barwick’s counsel did not refer to any authority in support of the novel proposition that if a prosecutor makes a submission that the charge is not made out, the Tribunal is foreclosed from dealing with the charge or has a duty to the respondent to inform him that it remains under consideration.

57 We see no difficulty with the course adopted by the Tribunal on these matters. We do not consider that it is necessary for a disciplinary tribunal seized of a charge to advise a respondent to the charge that it will not proceed to deal with it even if, contrary to the usual situation, the informant has indicated in closing that the evidence is not sufficient to sustain the charge.

58 The Law Society or the parties jointly could have moved that the Tribunal permit the Grounds in issue to be withdrawn. This course was not adopted.

59 In these circumstances the charge clearly remained before the tribunal.

60 Objection (iii) as we see it raises a more difficult issue.

61 At [320] the Tribunal stated that ‘throughout the entire period under consideration there was a systematic and deliberate course of conduct’ by Mr Barwick ‘designed to protract the finalisation of the estate and payment of the final dividend, until such time as his sub-division had been completed and funds became available to him’; and in going on to state that – ‘This finding is relevant to the order that we will make.’

62 This conclusion appears in the course of dealing with Grounds 1 [neglect, delay and incompetence in the administration of the Wilkinson Estate] and 2 [Preferring his own interest over that of a Beneficiary] of the Amended Information. The Tribunal’s reasons deal with these Grounds from para [311] to [358] (interposing its examination of Ground 3(b) at [349-352]).

63 The Law Society stated in reply that the finding was within ‘the ambit of the issues’ raised for determination by Grounds 1 and 2 of the Amended Information and by virtue of the order sought in the proceedings (removal of name from the roll of Legal Practitioners); the Amended Reply by Mr Barwick, para 1(1); and the case advanced by Mr Barwick at hearing; and supported by various passages in the transcript (enumerated); and that it was within ‘the ambit of the submissions’ made by the Law Society (enumerated). The Law Society noted in submissions at hearing that Mr Barwick himself raised the subject of the nature of his conduct in the course of the proceedings.

64 It is the case, as Mr Brereton contended, that there is no charge or particular expressed in the precise terms used by the Tribunal in its finding at [320]. An issue clearly arises as to the appropriateness of the comments made by the Tribunal at [320].

65 The courts have emphasised that great care must be shown by disciplinary tribunals in not exceeding the scope of the charges and particulars in the findings they make. Furthermore, the order made by a disciplinary tribunal must be based on findings in relation to the charges to the extent found proven and the particulars to the extent found proven.

66 In Smith v New South Wales Bar Association (1992) 176 CLR 257 the High Court reviewed the conduct of disciplinary proceedings before the New South Wales Court of Appeal. In those proceedings a barrister had been found guilty of professional misconduct in that he gave false assurances that he was instructed to appear for the defendant; and did so twice to a Magistrate, as well as making other inaccurate statements about the matter, before the commencement of a hearing. By the time the hearing commenced the barrister had obtained a back-sheet showing that he was now briefed. But an issue remained as to whether what he had said to the Magistrate earlier in the day was accurate. The barrister’s consistent defence had been that he honestly believed that he had been retained by the solicitor who acted for the defendant, by virtue of a long standing arrangement and in light of a conversation that he said he had had with the solicitor in a nearby car park some days before. The court rejected the barrister’s explanation, and found the charge of professional misconduct established.

67 During observations on the order to be made one of the judges (Samuels JA) said that not only had the barrister lied to the Magistrate in relation to the state of his instructions, but he had also lied to the Court in his evidence on the matter. These observations were adopted by the other judges. While Samuels JA would only have administered a censure, the other two judges (Mahoney and Meagher JJA) considered striking off appropriate. Accordingly his name was struck off the roll. Meagher JA said:


‘[The appellant] lied to the magistrate, and has subsequently lied to this court, and on oath.

It must be in the public interest that the profession be purged of those members who succumb to the temptations of mendacity.’


68 The High Court held that the Court of Appeal had erred in law in that it had taken into account on penalty not only the conduct of which he had been found guilty as charged but also his conduct in the proceedings before the Court of Appeal.

69 The High Court noted that the barrister’s case was that he had been honestly mistaken when he gave the assurance to the Magistrate; and the Court of Appeal, as it was entitled to do, did not accept that evidence. It followed from the Court’s rejection of the honest mistake defence that it was satisfied, to the requisite standard, that the barrister knowingly gave a false assurance; and there could properly be a finding that the barrister lied on that occasion: see Brennan, Dawson, Toohey and Gaudron JJ at 269.

70 Their Honours noted at 269 that to make a positive finding that a witness had lied in any proceedings was a serious matter that went beyond a mere rejection of a witness’s evidence. Such a finding is tantamount to a finding of perjury. It was essential in the present case, particularly having regard to the gravity of such a finding, that the barrister be given an opportunity to be heard on the matter.

71 Deane J stated at 270 that allegations against a practitioner must be specifically identified, citing among other authorities R v Solicitors’ Disciplinary Tribunal [1988] VR 757 at 768-770; and O’Reilly v Law Society of NSW (1988) 24 NSWLR at 210, 224-5. He also stated that the practitioner must be given a reasonable opportunity to be heard citing among other authorities Wentworth v NSW Bar Association (1992) 176 CLR 239 at 252-4. It remained a separate question for the Court (or other disciplinary tribunal) as to whether having rejected the evidence, the barrister’s conduct in giving that evidence should itself be the subject of a further finding of misconduct: at 273.

72 Deane J saw it as essential that before making a separate finding that the barrister had lied to the Court itself the information should have been amended, and a particularised complaint to that effect be made against the barrister. The Court of Appeal, he said, was not entitled to make an adverse order wholly or partly based on a finding that the appellant was guilty of professional misconduct in respect of his evidence before them. For further discussion of Smith’s case, see Bannister v Walton (1993) 30 NSWLR 699 at 723-729 per Mahoney JA.

73 There are a number of more recent cases arising in the professional discipline context, not cited in argument by counsel for Mr Barwick, which are also relevant.

74 In Gad v Health Care Complaints Commission [2002] NSWCA 111 (24 April 2002) a medical practitioner had been charged with professional misconduct and unsatisfactory professional conduct in relation to the administration of a course of testosterone to a girl of 16 (to deal with weight problems) that resulted in severe hormonal effects and the development of male characteristics. The Medical Tribunal found the practitioner guilty and ordered that he be deregistered and not be considered for readmission for at least three years.

75 There were five principal ‘particulars of the complaint’, one of which related to record keeping practices, as follows:

‘3. In April and May 1998, the practitioner:
i Did not keep proper or adequate medical records for patient A.

ii Did not keep adequate records in relation to the supply of a restricted substance, in contravention of clauses 40 and 59 of the Poisons and Therapeutic Goods Regulation 1994.’

(The practitioner admitted particular 3(i), the only particular admitted in respect of any of the complaints.)

76 The Tribunal went beyond the scope of the charge as particularised, and made a finding that the appellant had engaged in ‘deliberate falsification’ of records. In the leading judgment, Stein JA observed:

‘43 However … the Tribunal found that the appellant had falsified his records with the intention of misleading anyone who might read them into the erroneous belief that he injected Intravite. The Tribunal said that this was a 'deliberate falsification of his records'.

44 There never was a Particular of complaint alleging falsification of the records by the appellant. On behalf of the appellant it is submitted that the Tribunal failed to accord him with procedural fairness. It was necessary to bring home to the appellant that it was the respondent's case that his records were not simply inadequate, but falsified so as to mislead.

45 There is substance in the submission since there was no explicit allegation particularised of deliberate falsification by the appellant of his records in order to deceive. Further, it is conceded that there was no direct cross-examination of the appellant to this effect.

46 In a way I can understand how the circumstance arose. The particular complaint was admitted, unlike all of the others. The evidence therefore concentrated on the disputed complaints. At the end of the day the Tribunal was clearly of the opinion that the evidence in relation to the records was such as to entitle it to make the finding of deliberate falsification.

47 This was probably the case but in so finding the Tribunal overstepped the mark because such a charge had never been particularised, nor admitted. The failure to cross-examine Dr Gad about it also raises the spectre of a failure to accord procedural fairness.

48 These grounds of appeal should therefore be upheld. The question remains as to what effect a proper finding of a breach of Particular 3(i), as particularised and admitted by the appellant, would have made. The answer is that a finding of unsatisfactory professional conduct would have been made rather than one of professional misconduct, as found by the Tribunal. That is, the lesser offence under s 36 would have been found, rather than the more serious one under the definition in s 37 of the Act.

49 Nonetheless, the parties are in agreement that if error be found in relation to these grounds, the court should not remit the matter to the Tribunal, but, as it were, proceed to re-sentence the appellant. This approach is in accordance with Bannister v Walton (1993) 30 NSWLR 699 at 731.’

77 In the above instance a narrow charge ‘inadequate’ recordkeeping had been laid. The finding entered was far more serious ‘deliberate falsification’ – forgery. The situation parallels that dealt with by the High Court in Smith .

78 On the other hand in Coe v NSW Bar Association [2000] NSWCA 13 the barrister appealed unsuccessfully on procedural fairness grounds against his striking off. The misconduct alleged was that in Family Court proceedings between him and his wife he had sworn an affidavit that was ‘false in a material particular.’

79 The barrister challenged the Tribunal’s finding that he had sworn it knowing it to be false. The Tribunal rejected the barrister’s evidence (on affidavit) that he had been mistaken and had given the relevant information (as to his income and assets) in good faith. The Court rejected the submission that the Tribunal had exceeded the scope of the charge in its finding.

80 Mason P recited the several considerations arising from the evidence that had led the Tribunal to its conclusion. His Honour said at [5]: ‘The Tribunal was, in my view, clearly entitled to conclude that the affidavit had been sworn falsely and knowingly so. Given that the barrister did not give evidence before the Tribunal, despite the most explicit warning of the risk he was taking, the conclusion was well-nigh inevitable.’

81 This case is one, as we see it, that falls on the acceptable side of the line set by Smith. The finding flowed logically from the matter charged; and, viewed objectively, ought not to have surprised the respondent.

82 In Sabag v Health Care Complaints Commission [2001] NSWCA 411 the Court reviewed the conduct of proceedings before the Medical Tribunal giving rise to an order for deregistration of a medical practitioner. The decision of the Tribunal was set aside on two grounds, of which the second is presently relevant.

83 The particulars of the complaint laid against the practitioner referred to his conduct in connection with the performance of nerve block procedures and the administration of injections, and particularised incorrect statements in Medicare claims as to services rendered, making of claims without having performed any procedures, and incorrect techniques in the performance of the procedures. At hearing the practitioner adopted the position that he had never performed ‘nerve block’ procedures, but was instead engaged in the (less intrusive) performance of intramuscular injections into muscle bundles near the source of pain. He made a number of admissions, based on that version of his conduct, in relation to the claims and record keeping allegations. The particulars were never amended to take account of these (less culpable) admissions. The Tribunal accepted that he was engaged in this alternative procedure. One result was that the charge in relation to the use of certain techniques as particularised was not made out, as those techniques were only relevant to the more intrusive 'nerve block' procedure.

84 The Tribunal then made a series of adverse findings as to the practitioner's competence in using the (less culpable) intramuscular technique, of which the two most significant were that he was ‘incompetent’ to perform those procedures; and had misled investigative agencies.

85 The Court, by majority, set aside the Tribunal’s decision. The practitioner's contention at appeal essentially was that he been found guilty of a case different to the one he had been asked to meet. The practitioner's defence had led to the focus on the intramuscular technique.

86 Davies AJA (in dissent) was of the view that as the practitioner had introduced the matter of intramuscular treatment, it was not procedurally unfair of the Tribunal to deal with it, notwithstanding that particulars of incompetence in that respect had not been given (at [28-29]).

87 Sperling AJA (with whom Beazley JA agreed) said at [95]: ‘There is no suggestion that the Tribunal would have considered deregistration the appropriate penalty if incorrect claiming was all that was involved. Deregistration was the result because of further findings made by the Tribunal. They were a finding of incompetence to carry out the procedures which were in fact carried out, and a finding that Mr Barwick had deliberately misled the investigating agencies at an earlier time.’

88 Sperling AJA said, applying Smith, at [106-7]:

‘…There was nothing in the complaint giving notice to the complainant of either of these two matters - incompetence to perform the procedures carried out or having misled investigating agencies - as conduct to be relied upon as constituting or contributing to the professional offences charged. There was no such notice in the opening address by counsel for the complainant. On my reading of the opening statement made by counsel for the appellant and his later opening address before adducing evidence, there was nothing to suggest that the appellant was otherwise on notice of these matters as part of the complainant's case. (Davies AJA has a different view and I will come to that). It was not put to the appellant in cross-examination by the Tribunal that the appellant was incompetent to perform the procedures in fact carried out by him or that he was incompetent in a more general sense. Neither of the two above matters was put to the Tribunal in the closing address by counsel for the complainant, as elements of the complainant's case. Again, counsel for the appellant did not, in his closing address, recognise any such elements in the complainant's case. The Tribunal itself did not raise these matters for consideration before giving its decision.

107 In short, the appellant had no notice that these matters would be or might be relied upon by the Tribunal as constituting or contributing to its ultimate findings. The appellant did not have an opportunity to be heard in relation to those matters.’

89 As to the dissenting view of Davies AJA, his Honour said at [116]:
‘116 The authorities cited by Davies AJA establish that, where an issue has emerged at the trial and has been litigated, it is no objection that the issue was not notified before trial. Davies AJA takes the view that the issue of competence to perform procedures in fact carried out was litigated, I take the view that it was not. That appears to be the point which has led us to different conclusions on this aspect of the appeal.’
90 Returning to the present case. It will be seen from the evidence before the Tribunal that there was a clear connection in time between Mr Barwick’s personal financial difficulties (as at 1992 he did not have sufficient income to meet repayments due on mortgages held over his several real estate assets), Mr Dechnicz’s personal financial difficulties and the new firm’s cash flow situation, on the one hand, and the taking of clients’ monies without authority, on the other hand. The money that was taken was used as to $60,000 to cover Mr Dechnicz’s first two payments under the terms of settlement of a dispute with the former partners of Mr Barwick and Mr Dechnicz in the firm of Smits, Leslie and Barwick. It was acknowledged by counsel for Mr Barwick at hearing that if Mr Dechnicz had not been bailed out, he would probably have been forced into bankruptcy thereby causing the dissolution of the new partnership.

91 Then five months later, there is a clear connection in time between the commencement of questioning by the Law Society’s inspector and steps being taken by Mr Barwick and Mr Dechnicz to obtain authorities and regularise the documentation created when the clients’ monies was taken.

92 Ground 1 of the information amounted, we consider, to a ‘course of conduct’ charge, i.e. – that Mr Barwick was guilty of ‘neglect, delay and incompetence’ in the administration of the estate. As we see, in the impugned passage in the Tribunal’s reasons at [320] it was giving a general assessment of the totality of the conduct alleged in the particulars supporting Ground 1.

93 The statements in [320] occur at a point in its reasoning where the Tribunal forms the view on the evidence that this is not a case of mere delay. It has referred to the clear fact that this was a simple estate to administer, with the sale of the major asset, the unit at Neutral Bay, having occurred in December 1988. Though there were periods during 1989, 1990 and 1991 when Mr Barwick was not engaged in active practice (he had for example taken leave in the run-up to the federal election held in March 1990 in which he was a Liberal Party candidate), he had continued as the executor. There could be no reasonable explanation for the long time that it took to complete the administration of the estate. So much was acknowledged by Mr Barwick in his formal admissions.

94 At [318] the Tribunal begins to give its overall view of the degree of seriousness of the misconduct. The Tribunal says ‘The delay was probably due initially to neglect.’ But it then expressed the view that once the $38,000 had been lent under the contributory mortgage, ‘Barwick we think made no genuine effort to progress the matter to completion.’ It is against this background that it proceeds to make the statements in [320] now placed in issue.

95 In our view the statements in [320] did not purport to deal with any additional or fresh matter. In the reasons which follow [320] the Tribunal itemises many of the actions taken by Mr Barwick to avoid payment to Mrs Fulton, such as repeatedly not responding to telephone messages and then only acting to release the funds when her husband threatened to report her to the Law Society. At that point it notes that Mr Barwick had to use funds from the office account. (Elsewhere in its reasons the Tribunal rejected Mr Barwick’s evidence based on the notes placed in the file by Mrs Hayward that he had given some degree of attention to Mrs Fulton’s enquiries during 1992. This necessarily followed from the finding that they were falsified.)

96 At [357] the Tribunal again provided an assessment of the gravity of the conduct proven in respect of delay and preferring his own interests. It said:

‘We find that he was responsible for the delay throughout the time he was the solicitor for the estate. This was for all of the time since the death of the testatrix …[with the exception of a short period] … . He clearly breached his duties to the beneficiaries to progress the administration. He betrayed the trust and confidence which Miss Wilkinson placed in him when she made him executor of her will.’
97 The Tribunal’s comments at [320] must also be read in the context of Mr Barwick’s essential defence – that he had been affected by depression at the time of many of the events, and that was the explanation for much of his conduct. He had, he claimed, admitted the objective falseness and inaccuracy of many statements and the inadequacy of much of his conduct, but had denied that the file notes were intentionally false.

98 While Ground 1 was broad-ranging, we agree that a 'systematic' and 'deliberate' course of conduct was not charged. On the one hand 'neglect', 'delay' and 'incompetence' were charged. Sometimes 'neglect' and 'delay' may be attributable to simple office mismanagement or some special factor such as sickness. This was clearly not such a case.

99 Mrs Fulton and later her husband had been in regular contact trying to find out what was happening in relation to the final payment from the estate. There was abundant evidence before the Tribunal as to the financial difficulties that affected Mr Barwick, his partner and the continued existence of the practice.

100 It was open, we consider, in these circumstances for the Tribunal to form the overall view as to the character of the 'neglect', 'delay' and 'incompetence' that it lay at the serious end of the scale. This is what we see the use of the words 'systematic' and 'deliberate' as being intended to convey. The Tribunal was entitled to give an indication as to the quality of the misconduct found proven.

101 We do not consider that this, the primary conclusion reflected in [320], gives rise to any error of law. There is a further conclusion expressed in [320] - that Mr Barwick’s conduct had been ‘designed to protract the finalisation of the estate and payment of the final dividend, until such time as his sub-division had been completed and funds became available to him’.

102 We agree with Mr Brereton’s submission that his client never had an opportunity to answer any such allegation.

103 As it happened, Mr Barwick paid out Mrs Fulton ahead of the due date under the contributory mortgage on 26 February 1993 which was well ahead of the completion of the sub-division. The Tribunal was satisfied that this action was precipated by the pressure applied by Mrs Fulton’s husband, Commander Fulton, especially in light of the threat that he would report the matter to the Law Society.

104 The most questionable element of the Tribunal’s statement, as we see it, is the reference to ‘until such time as the sub-division had been completed’. Mr Barwick has acknowledged throughout that he had hoped to have the sub-division completed more quickly than ultimately transpired. He referred in his evidence to difficulties with development approvals and the like. There is ample evidence that he did not expect to be liquid in a cash flow sense until the practice picked up significantly or the sub-division proceeded. We acknowledge that Mr Barwick’s evidence consistently, and not doubted by the Tribunal, was that at the time his net worth covered his liabilities (see generally Transcript 490-492).

105 What is, in our view, incontrovertible is that Mr Barwick did not intend to release the monies ‘until … funds became available to him’. In the circumstances what he did was to take monies substantially from his office account to pay out Mrs Fulton. Monies were only returned to the estate trust account when his sister was used to refinance the previous loan by entering into new mortgage with the St George Bank in April 1993, now for $95,000, out of which she said she received only $1,000 or $2,000.

106 The Tribunal, we agree, went too far in stating with certainty that the delay would continue until such time as the sub-division was completed. The Tribunal’s went too far in expressing a conclusion as to the point of time in the future when Mr Barwick would have resolved his financial difficulties.

107 There is an error, but one in our view of minor degree. We deal with the effect of this and any other errors on the decision under appeal at the end of these reasons.

108 Objection (iv) is that the Tribunal denied Mr Barwick natural justice in making the following findings when, it was said, they were not the subject of particulars: (a) ‘that his evidence concerning the file notes was intentionally false’: para [377] of the reasons; (b) ‘We find that Barwick … deliberately concealed the contributory mortgage from the National Bank’: para [286]; and (c) that Mr Barwick omitted certain material matters and made an untrue statement in his statutory declarations of 2 May 1997 and 7 March 1997: paras [305-308].

109 The Law Society’s reply is that the findings were within the ambit of the issues relating to credit and fitness for practice of Mr Barwick.

110 The Law Society refers to a variety of material to support its submission that the matter was properly before the Tribunal: various written submissions by it and Mr Barwick, transcript, chronologies presented at the hearing; appellant’s statutory declarations; submissions as to orders (all enumerated). It was said in submissions at hearing that any departure from the ambit of the issues was acquiesced in by Mr Barwick, and that there is nothing exceptional about that in the adversarial process.

111 As to item (a), there was a mass of evidence before the Tribunal in this case, including the accounts of his conduct given by Mr Barwick in his statutory declarations and in his oral evidence at hearing. He gave evidence for over a day. The Tribunal is entitled to form a view as to his accuracy and honesty on matters of significance, and take that into account on credit as it did. We see nothing problematic in the observations of the Tribunal.

112 It is plain from the reasons that the Tribunal recognised that falsehood and inaccuracy (other than as to what was said in respect of the 1991 mortgage transaction) had not given rise to a particularised allegation in the Amended Information: see para [305]. Equally it is clear – see para [308] – that the Tribunal sees the inaccurate declarations as reflecting adversely on his credit.

113 The finding referred to under item (b) appears under a heading in the reasons ‘Correspondence with the Law Society’. At para [281] the Tribunal refers to the second trust account inspection undertaken by the Trust Account Inspector, Mr Sofiak, on 7, 10 and 11 May 1993. The Tribunal itemises the number of letters that had already been sent by the trust account inspector or the Professional Standards Department to Mr Barwick and had gone unanswered (four since the first in October 1992). The reasons then refer to the one letter written by Mr Barwick in this period, reporting progress, that dated 11 February 1993. With that letter Mr Barwick had enclosed a copy of the ‘duly stamped mortgage’ and went on to make the following statements:

‘There have been delays in securing registration, a caveat was prepared.’
114 The Tribunal commented on this assurance as follows:
284. Despite what is said in Barwick’s letter, in our view it was never intended by either Barwick or Dechnicz that the contributory mortgage would be registered or protected by a caveat over Mrs Roberts’ property.

285. The mortgage was not capable of being registered, initially because it was not stamped and at all times because there had been no request made to or consent given by the National Bank to the registration of the contributory mortgage as a second mortgage. It seems tolerably clear that, had the Bank been requested to give consent, it would have refused. By the time the mortgage was finally stamped (after Mr Sofiak’s inspection) the firm’s overdraft account with the National Bank had climbed to substantial amounts and was continuing to escalate.’

115 It is after these observations that the Tribunal states:
‘286. We find that Barwick and Dechnicz deliberately concealed the contributory mortgage from the National Bank. The firm’s overdraft facility was supported by a guarantee from Mrs Roberts which in turn was supported by her 1991 mortgage to the bank. They had no other available security to offer the Bank. The existence of a second mortgage had the potential to influence the bank’s consideration of any request by the firm for increased or continued overdraft facilities.’
116 The Tribunal then goes on to say in para [287]:
‘ … It is the respondents’ case that the usual procedures were not followed because it was intended to discharge the contributory mortgage after a short period of time. This is not a plausible excuse. This was a loan of clients’ funds. If it was a genuine loan, both Barwick and Dechnicz knew the importance of protecting it at least by caveat.’
117 The Tribunal refers once again to the letter of 11 February 1993 at [288], stating: ‘As we have said, we do not believe this was an accurate statement of intention.’ It said further: ‘We note that this letter forms no part of the Law Society’s case against Barwick, however we take it into account in assessing his next letter of 12 May 1993.’

118 On any view, the letter of 12 May 1993 is of central significance in assessing the degree of culpability of Mr Barwick’s conduct. The Tribunal rejected Mr Barwick’s evidence that he was ‘insufficiently attentive’ to its contents before signing it. The Tribunal found that by enclosing a General Lending Authority signed by Mrs Fulton and dated 24 August 1992 he had set out to mislead the Law Society. Mrs Fulton’s evidence was accepted that she first sighted the document on or about 26 February 1993, and signed it then. Further as the Tribunal noted, the letter represented that she had been given full and informed advice before signing the Authority. It was satisfied that she had not been given such advice.

119 It is apparent from the above passages that the Tribunal was aware that there was no charge before it specifically addressing the contents of the letter of 11 February 1993. On the other hand one of the matters charged, at Ground 1(k) was that Mr Barwick had been guilty of neglect, delay and incompetence in that ‘(iv) he failed to ensure that the contributory mortgage granted by Mrs Roberts in respect of the loan to her was duly stamped and registered or protected by caveat as a first charge on the land mortgaged or at all.’

120 The statements made in the letter of 11 February 1993 were clearly relevant to this charge.

121 The conclusion of the Tribunal went, as we see it, to the extent of his failure in this regard. As we see it, the Tribunal is saying that this is not a case of omission of a kind that may result from a mismanaged or poorly organised practice.

122 It is saying that the omission had a worse quality – for reasons to do with the financial state of the practice it was unlikely initially that any action would have been taken to protect Mrs Robert’s interests.

123 Eventually after the matter came to the notice of the inspector the most basic step - execution and stamping of the instrument of mortgage - was taken. There was in the Tribunal’s view no practical likelihood that the next step - lodging a caveat - would have occurred. This is as, we see it, a relevant matter for the Tribunal to consider in assessing the gravity of the conduct in issue.

124 In closing submissions on 24 July 2001, the following exchange occurred between the Deputy President and counsel for Mr Barwick in respect of disclosure to the Bank (Transcript page 1048):

DEPUTY PRESIDENT: … what is the explanation for the failure to seek a consent of the bank to register it as a second mortgage?

MR ALLAWAY: It would rock the boat. The firm was relying upon that bank for its working overdraft. To burden the bank with some further security, with some further prospect of debt on the secured property – I know the bank would have first preference if it came to a forced sale – the bank would have said, “No, I am not a conveyancer.” There are people on the Tribunal who know more about this than I do.

The other thing is that it might have alerted Mrs Roberts to the fact that she had signed the mortgage document without having it fully explained to her. It is not clear that Mrs Roberts really knew on 20 March what she was doing when she signed the mortgage document. To put it in colloquial language, it would rock the boat. That’s the explanation.

125 On one view, the Tribunal’s conclusion – ‘We find that Barwick and Dechnicz deliberately concealed the contributory mortgage from the National Bank’ is no more than a reflection of the closing submissions presented on behalf of Mr Barwick. It was not a matter in serious contest.

126 We agree that there is no particulars or charge alleging deliberate concealment. If this statement is excessive and unnecessary, and amounts to an error of law, it is not a matter to warrant interfering with the decision. We deal with this point further at the end of our reasons.

127 As to item (c) this finding goes the contents of Mr Barwick’s statutory declaration as they relate to the creation of the file notes given to Mrs Hayward in April 1993 for inclusion in the Estate and Mortgage Advance files. We have set out the relevant text in the statutory declaration earlier in these reasons.

128 The observations in issue conclude with the statement that his evidence concerning the file notes was ‘intentionally false’ (at [377]).

129 At this point of its reasons the Tribunal was examining the question of the order to made in light of its findings. From paras [363] to [373] it makes general observations in respect of both of the cases that it had heard (against Mr Barwick and against Mr Dechnicz) on whether the conduct as proven constitutes professional misconduct, and expresses itself satisfied to the requisite standard that Mr Barwick had committed professional misconduct on the grounds set out in the information.

130 At [374] the Tribunal turned to consider each practitioner’s situation separately, commencing with Mr Barwick. It referred to the extent of his admissions, their timing, his evidence as to faulty recollection of events, his evidence as to suffering from depression and the quality of his evidence (‘Many of the answers given at hearing were not truthful or were at best a half truth’:[376].) It then said at [377]:

‘In addition to the primary findings of fact we have set out in these reasons, we have found that his evidence concerning the file notes was intentionally false. In reaching this conclusion we are conscious of the need for care and a high degree of satisfaction on the evidence [ O’Reilly’s case and Smith’s case cited]. We base our finding not only on the demeanour of the respondent, but upon the whole of the documentary and other evidence before us.’
131 This clearly is also a finding of the kind to which the principle in Smith’s case is directed. Plainly the finding was taken into account in making the ultimate order. The question is whether it was made after according Mr Barwick procedural fairness.

132 The file notes were relevant to the matters charged in two ways. One, if genuine, they showed some activity on the part of Mr Barwick in attending to the distribution of the estate and the making of a final payment to Mrs Fulton. They provided corroboration for his case that he had spoken to Mrs Fulton, and went to the question of the extent to which she was informed as to what had happened to the last part of her inheritance. Two, they were material to the charge that he attempted to mislead the trust account inspector by placing false and misleading notes on the file in the circumstances recounted by Mrs Hayward in her affidavit of 1 May 2001 and her evidence at hearing on 1 June 2001 (Ground 7(b)(iii) of the Amended Information).

133 It is clear that a key issue in this case was whether the notes were genuine or false. Mr Barwick stated that he prepared the notes from other notes kept by him of conversations with Mrs Fulton: see his Amended Reply filed 8 June 2001, at point 3. There was extensive examination of Mrs Hayward and Mr Barwick on these matters. Having reached the conclusion that Mrs Hayward’s evidence should be accepted and Mr Barwick’s rejected, there could, in our view, be no other conclusion reached, in the case of a practitioner who was competent at the time, that the notes were ‘intentionally falsified’. The conclusion logically follows in the way illustrated by Coe’s case, discussed earlier in these reasons. In these circumstances we do not consider that any issue of want of procedural fairness arises.

134 The Administrative Decisions Tribunal Act at s 89 contains requirements in relation to the content of written reasons for decision. Section 89(5) provides, as material:
‘the written reasons are to set out the following:

(a) the findings on material questions of fact, referring to the evidence or other material on which those findings were based,

(b) the Tribunal’s understanding of the applicable law,

(c) the reasoning processes that led the Tribunal to the conclusions it made.’

135 Mr Barwick contends that the Tribunal erred in law in that it contravened the requirements of s 89(5) in the following ways:
(i) in concluding that on his evidence, that he was not aware when the loan was made that Mrs Roberts’ property was subject to a mortgage to the National Bank, was false (at [112] of the reasons)

(ii) in concluding that Mr Barwick’s admissions were insignificant in the context of the proceedings (at [374])

(iii) in concluding that the character evidence was not based on any detailed account of the conduct that occurred (at [383])

(iv) in concluding that the public interest would not be served by allowing Mr Barwick to remain in practice.

136 Section 89(5) should be read, we consider, alongside the rulings given by the higher courts on what is required by way of adequacy of reasons. We refer in particular to Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 and Soulemezis v Dudley Holdings P/L (1987) 10 NSWLR 247.

137 Mr Brereton cited the recent Court of Appeal decision in Sinha v Health Care Complaints Tribunal [2001] NSWCA 206, to which we have referred earlier in these reasons.

138 In that case, as noted earlier, the misconduct alleged was that the male medical practitioner had been engaged in a sexual relationship with a female patient at his surgery frequently and consensually over many years. In the course of its reasons, the Tribunal had said that the issue was whether the patient was either maliciously lying or telling the truth; and then said, with little elaboration, that the patient’s account was “...essentially accurate and reliable..”. The patient’s evidence was preferred over that of the long-term secretary to the practitioner who had given evidence that she had never had any cause to suspect that the events alleged to have occurred in the surgery did occur. They were said to have occurred after the surgery closed; and she said she always left after Dr Sinha.

139 In Sinha the Medical Tribunal was bound by a substantially similar provision to s 89(5), being s 165 of the Medical Practice Act 1992. Fitzgerald AJA noted at [36] of his reasons that the Tribunal’s opinion related to a ‘central issue in the proceedings, and a critical aspect of the Tribunal’s decision.’ Fitzgerald AJA then closely examined the evidence of both the patient and the secretary. He acknowledged that only in very rare circumstances should an appellate court set aside the findings on credibility of a trier of fact: see, e.g., Rosenberg v Percival (2001) 75 ALJR 734; and State Rail Authority v Earthline Constructions (1999) 73 ALJR 306.

140 But in this case he saw it as open to the Court to determine whether the Tribunal erred in law in reaching its decision by breaching s 165 in that it ‘failed to explain satisfactorily’ why it accepted the patient as credible; and referred to Beale v Government Insurance Office of NSW (1997) 48 NSWLR 430.

141 His Honour continued at [52]: ‘If the Tribunal did not explain why it accepted the patient's evidence notwithstanding material inconsistencies between her evidence and other evidence, favourable to the practitioner, which the Tribunal accepted, it made a legal error which warrants a rehearing.’

142 His Honour considered that the Tribunal’s treatment of this evidence was ‘exceptionally brief’ (at [56]). Further, there was a major contradiction between the Tribunal’s view of when the relevant events occurred – after hours; and the secretary’s statement that she never left the surgery until after the practitioner left, which was left unresolved. He concluded at [59]: ‘The Tribunal's failure to deal with this significant evidentiary conflict when explaining its acceptance of the patient's allegations makes its reasons critically defective, and the practitioner is entitled to a rehearing.’

143 The Appeal Panel has on previous occasions accepted that there is a general principle that a decision is affected by error of law if it is critically defective in the sense explained by Fitzgerald AJA: see, e.g.Woodside & Anor v Director General, Department of Community Services (CSD) [2000] NSWADTAP 8.

144 Turning to objection (i) under this heading. As noted earlier, the evidence in relation to the ‘prior mortgage’ is referred to at [97] & ff of the reasons for decision. At [109-112] the Tribunal made the following findings

‘109. We find that Barwick negotiated for Mrs Roberts with the bank. In all probability the bank made its security requirements known to him on that occasion. Even if the question of security did not come up until after their meeting with the manager, we are sure that Mrs Roberts would have discussed this with him before signing the mortgage.

110. We think Mr Barwick was well aware in January/February 1991 that the loan from the National Bank to Mrs Roberts was to be secured and was actually secured by a first mortgage.

111. We are confirmed in this view by Mrs Roberts’ evidence of the meeting with her brother, joined by Mr Dechnicz, in early April 1992, to which we refer below.

112. Accordingly we hold that ground 5 B(f) of the Information against Mr Barwick is established.’

145 Prior to expressing these views, the Tribunal referred to evidence that Mr Barwick accompanied his sister to the National Bank at Cremorne on 16 January 1991. Mrs Roberts’ evidence before the Tribunal was that she had filled out a document title ‘line of credit - schedule of securities’ in the presence of Mr Barwick on this date. Mrs Robert returned to the bank by herself a few days later to sign the mortgage; according to the Bank’s records on 22 January 1991. The Tribunal took into account the nature of the relationship between Mr Barwick and his sister, and the extent of Mr Barwick’s experience as a practitioner (Mr Barwick had worked in the Law for 15 years as a clerk and managing clerk before being admitted to practice in 1977).

146 There was ample evidence before the Tribunal on the crucial question of the accuracy or otherwise of Mr Barwick’s declaration that he was not aware in the latter part of March 1992 that the property was subject to a first mortgage to the National Australia Bank. The Tribunal received written and oral evidence from Mrs Roberts and from Mr Barwick. The Tribunal indicated its preference for the evidence of Mrs Roberts where her recollection conflicted with that of Mr Barwick (at [106]).

147 The Tribunal referred in general terms to the evidence that it took into account on this issue. It referred (appropriately in our view) to Mr Barwick’s status as an experienced conveyancing solicitor, the closeness of his relationship to his sister, and received evidence on the importance to Mr Barwick at the time of the $25,000 loan. There was ample evidence before it, in our view, to conclude as it did. It has, in our view, given a sufficient account of its reasoning process.

148 It was, perhaps, unnecessary for the Tribunal to go as far as it did in [109] in order to deal with the allegations set out in Ground 5(B)(f). The issue that it was called on to address was the state of Mr Barwick’s awareness of the prior mortgage of January 1991 at the time he entered into the second mortgage transaction involving his sister (in March 1992). The Tribunal said:

‘109. We find that Barwick negotiated for Mrs Roberts with the bank. In all probability the bank made its security requirements known to him on that occasion. Even if the question of security did not come up until after their meeting with the manager, we are sure that Mrs Roberts would have discussed this with him before signing the mortgage.’.
149 The first conclusion expressed in [109] is acknowledged by Mr Barwick in his evidence. He did go to the Bank with her to negotiate a loan of $25,000. The next conclusion is that ‘In all probability the bank made its security requirements known to him on that occasion.’ This conclusion is stated tentatively, and is, as we see it, a reasonable one founded in common experience of transactions of this kind. It is also a conclusion open to be inferred from the fact that on the next occasion of an attendance at the Bank, by Mrs Roberts alone, the relevant mortgage documentation was placed in front of her to sign. It is not necessary for the Tribunal to set out its thinking didactically on a matter of this kind.

150 The Tribunal then deals with the hypothesis that is in line with Mr Barwick’s case, i.e. that he was not made aware at the first discussion that a mortgage was contemplated as the form of security, and says ‘we are sure that Mrs Roberts would have discussed this with him before signing the document’.

151 Mr Brereton submitted that there was 'not a skerrick of evidence' for the conclusions set out in [109], in particular the one now under consideration. He submitted that the conclusions amounted to sheer speculation on the part of the Tribunal, and consequently gave rise to an error of law.

152 There is, we acknowledge, no direct evidence going to the last of the conclusions. Viewed against that standard, this was an unavailable finding.

153 On the other hand, it is open to the Tribunal, as we see it, to form a considered view about the nature of the relationship that existed between Mr Barwick and his sister, and her likely conduct. In this case it had a great deal of evidence going to that matter, in particular Mrs Roberts’ unsworn affidavit of 1995 prepared for the Equity proceedings against her brother in the Supreme Court (adopted in its entirety by her by an affidavit filed in these proceedings) and her extensive evidence at hearing, as well as Mr Barwick’s own affidavit and oral evidence.

154 The finding in issue should, we consider, only be read in that narrow sense, as an observation about her likely conduct. It is not sufficient to support the conclusion that Mr Barwick did discuss it with her, and we do not read the conclusion that widely.

155 This finding is one factor among several leading the Tribunal to the conclusion that Mr Barwick was in March 1992 aware that his sister’s Mosman property was encumbered. It is not a sufficient matter to render the Tribunal’s reasons on this matter inadequate under s 89(5) or under the general law.

156 Objection (ii) relates to the statement made by the Tribunal (when considering what order is appropriate) that Mr Barwick’s admissions were ‘insignificant’ in the context of the proceedings. The full text of [374] is:

‘Barwick did make some admissions but only at the last moment and they were not full and frank. They were insignificant in the context of the proceedings.’
157 The following paragraphs [375-376] develop the point as to lack of frankness and candour. While, it is true that Mr Barwick formally admitted many of the Grounds and supporting Particulars, it is also clear from a review of the evidence filed and Mr Barwick’s evidence at hearing that much of his evidence was vague and less than comprehensive. One of the tasks of a disciplinary tribunal is to assess the gravity of the proven misconduct. It is not assisted in that task by partial or selective accounts of critical events in issue.

158 Moreover, as already noted, Mr Barwick contested vigorously three major allegations against him, and his evidence was found to be unsatisfactory. It was open as we see it to the Tribunal to describe the net result of the admissions especially where they are not full and frank as being ‘insignificant in the context of proceedings’. It is not the kind of assessment which, we consider, requires elaborate reasoning. We do not consider that the approach adopted in the reasons involved any inadequacy in terms of s 89(5).

159 Objection (iii) is that the Tribunal failed to give adequate reasons in support of its conclusion that the character evidence given in support of Mr Barwick at the hearing ‘was not based on any detailed account of the conduct that occurred’: at [385].

160 It is true that at the point at which it appears there is no elaboration. It was not necessary in our view to provide any elaboration on this point. The conduct in issue was grave, and went to the heart of practice as a solicitor, and the trust that is reposed in solicitors by the community. It also went to the heart of the obligations owed by a solicitor to body invested with public trust as the regulator, the Law Society.

161 In our view there was little that character witnesses could offer to exculpate or minimise the gravity of the conduct found proven. One should not overstate the significance of character witnesses in circumstances of the kind that presented in this case. We endorse similar comments by Sheller JA in Law Society of New South Wales v Bannister (1993) 4 LPDR 24 (CA) at 29.

162 We note that at hearing Mr Barwick continued to give an account of his conduct that was relatively favourable to him, as compared to what was ultimately found by the Tribunal. We accept that the witnesses were made aware of the contents of the Information. One character witness at least (Judge Craigie) did sit in on the hearing until the point at which he gave his evidence. But we see no problem with the Tribunal’s general description that the witnesses had no detailed account of the conduct of Mr Barwick.

163 At the time they gave their evidence these witnesses did not have before them the darker view of Mr Barwick’s conduct as found by the Tribunal. It is difficult to imagine that the character witnesses, some of great standing in the legal profession and the community, would have been as positive in their testimonials, if they had been asked to attest on the basis that Mr Barwick had been found to have

• concocted file notes in anticipation of a trust account inspection,
• not adequately informed a beneficiary as to the nature of a document headed General Lending Authority and not dated it with the day of its execution, and
• stated falsely on oath to the Tribunal that he was not aware of a prior mortgage of January 1991 over a property when he arranged for a further mortgage of the same property in March 1992.

164 We see no difficulty with the Tribunal’s treatment of the character evidence, which is consistent with the record of the proceedings. Its reasons are short, but to the point. There is no error.

165 Objection (iv) is a broader objection, going to the Tribunal’s ultimate evaluation of the public interest relating to whether Mr Barwick should be allowed to remain in practice despite his misconduct.

166 The Tribunal’s conclusion is expressed at [385] and follows on from the reasons given generally at between [363] and [373] and in relation to Mr Barwick between [374] and [385]. In its general conclusions the Tribunal found, as we consider it was bound to on the formal admissions alone, that the conduct of both practitioners did not involve an isolated act or omission. Moreover it found, as we consider was clearly open to it on the evidence and the facts as found, that both practitioners then engaged in conduct designed to conceal what they had done.

167 With findings of that kind, and having regard to the way in which Mrs Fulton in particular was dealt with by Mr Barwick and the creation of false file notes, the situation was one where, unless there was some very significant material to the contrary, the public interest would dictate that the practitioner be prevented from continuing to practise.

168 The issue to be considered in relation to the order is always, we agree, one of ‘present unfitness’ to practise. In that regard it is clear that the Tribunal was dissatisfied with the adequacy of Mr Barwick’s recognition of the gravity of conduct at the point of the hearing. It was also concerned over the inadequacy of the evidence given to the Tribunal on critical matters by Mr Barwick. It referred to the length of time over which the misconduct had occurred. It acknowledged, on the other hand, that there was no further discreditable conduct.

169 We are satisfied that it adequately exposed its reasons in reaching the view it did as to the public interest.

Irrelevant Considerations
170 In this case, it is contended by Mr Barwick that the Tribunal took into account in relation to the order the following irrelevant considerations:

(i) that his failure to make admissions had the consequences that witnesses were obliged to give evidence and be cross examined (see [378-9])

(ii) that, as found, his evidence concerning certain file notes was intentionally false, when that did not form part of the subject matter of the information against him (at [377])

(iii) that the gravity and nature of the proven misconduct prima facie called for striking off (at [380])

(iv) that, as found, he had undertaken a systematic and deliberate course of conduct to protract the finalisation of the Wilkinson Estate and payment of the final dividend until such time as the subdivision had been completed and funds became available.

171 It is well-recognised that it is an error of law for a discretion to be exercised by having regard to irrelevant considerations, by failing to have regard to relevant considerations, or by exercising it in a manifestly unreasonably way.

172 As noted earlier, the question of the appropriate order was considered by the Tribunal from para [363] onwards. The Tribunal began by examining the definition of ‘professional misconduct’ under the Act, surveyed the case law and recognised that present fitness was the issue: see discussion of Kennedy v Council of the Incorporated Law Institute of NSW (1939-40) 13 ALJ 563 (Rich J) at [365] of the reasons.

173 As to objection (i) the Law Society’s reply was that read in context, the Tribunal was doing no more than explaining why Mr Barwick’s admissions of ‘guilt’ was not the mitigating factor it might have been in other contexts.

174 Mr Barwick, we acknowledge, recognised the wrongs that he had done, and the damaging effect of his conduct on his reputation and for his family, especially the loss of the ‘society’ (as he put it) of his sister: see transcript 494-495. This statement was made to the Tribunal soon after his sister had given oral evidence, and been cross-examined (5 June 2001).

175 The Tribunal referred to the effect on the conduct of the proceedings of Mr Barwick’s failure to make full admissions, and in particular the invidious situation that his sister found herself in, being called as a witness for the Law Society against her brother: at [378] of the reasons.

176 It is permissible in professional discipline proceedings to take into account the effect of a practitioner not making full and frank admissions on people who are victims of misconduct and must then give evidence of a stressful nature.

177 The fundamental obligation of a practitioner is to give prompt, full, honest and candid accounts of conduct that falls under notice. There were serious charges, admitted and found proven, in this case that showed a lack of co-operation with the investigative bodies. This lack of co-operation commenced with the failure to answer promptly and fully the trust account inspector’s questions. It is accepted that ‘resort to dishonesty by a solicitor to conceal his misconduct from officers of the Law Society checking on his activities would of itself demonstrate his unfitness to be a solicitor:’ per Hutley JA in Law Society of New South Wales v McNamara (1980) 47 NSWLR 72 at 80. See also Wilson v Law Society of New South Wales [1979] 2 NSWLR 760.

178 The admissions that narrowed these proceedings were not made until just before they commenced – on 28 May 2001: transcript 543. This is not the conduct of a practitioner who has quickly come to terms with his wrongdoing. It is clearly relevant to an order.

179 The practitioner is, of course, entitled to test the case against him or her. But the practitioner equally carries the risk if he or she fails that an adverse observation may be made by the Tribunal in the context of penalty.

180 It is the role of the tribunal of fact to assess expressions of regret and contrition. In this instance the Tribunal was not satisfied that Mr Barwick’s admissions and the contrition that he showed should be given significant weight. There is no error of law involved.

181 Objection (ii) concerns the finding that Mr Barwick’s evidence concerning certain file notes was intentionally false, when they did not form part of the subject matter of the information against him. This is a re-casting of the objection made initially on procedural fairness grounds. For the reasons already given we do not regard this finding as having been affected by error, and accordingly consider that to have been a matter that was relevant to be considered on penalty.

182 We agree with the Law Society’s reply that this finding was open to be made in a context where counsel for Mr Barwick had specifically anticipated the possibility and addressed the Tribunal about the possibility. We agree with the Law Society’s reply that there was no element of surprise in relation to this matter.

183 As to objection (iii), the Law Society in reply contended that the Tribunal did not adopt any ‘presumption’ or ‘prima facie’ test as suggested. The Tribunal actively canvassed considerations that might favour an order short of striking off (passages from decision were enumerated).

184 The discussion at [380] of the reasons followed a consideration of the totality of the evidence and the conduct found proven. The Tribunal was making the simple point that the conduct was of a kind that warranted striking off. At this point of its reasons the Tribunal was considering the factors that might favour a lesser sanction, one of the kind that Mr Barwick had sought. It was simply concluding its discussion. It was not purporting to substitute a new test for the one articulated in Kennedy and many other well known cases.

185 As we observed earlier in these reasons, there can, in our view, be little doubt that the unauthorised taking of monies from client trust accounts is an offence, in its own right capable of founding an order for striking off. In this case, there was further serious misconduct found proven and significant failures in dealing with trust account requirements and in dealing, in an honest and co-operative way, with the Law Society’s investigation. There was an adequate consideration of the limited matters that militated in favour of the practitioner, in particular his subsequent good professional conduct: at [382] of the reasons.

186 Objection (iv) like objection (ii) puts in issue a matter already considered in relation to procedural fairness. The objection is that the findings in para [320] (systematic and deliberate course of conduct to protract the finalisation of the Wilkinson Estate until the subdivision was completed) was not open to be made, and accordingly it is an irrelevant consideration.

187 We have commented adversely on this finding insofar as it extended to the question of seeking to identify the ultimate time at which Mr Barwick would clear the debt. To that extent it follows that this aspect of the finding becomes an irrelevant consideration.

188 It will be seen from the above reasons that we have concluded that the Tribunal’s reasons for decision were affected by the following errors or possible errors:
(i) the Tribunal denied Mr Barwick procedural fairness in expressing the view at [320] that Mr Barwick’s delaying conduct was ‘designed to protract the finalisation of the estate and payment of the final dividend, until such time as his sub-division had been completed and funds became available to him’ (emphasis added);

(ii) and, possibly, in expressing the conclusion at [286]: ‘We find that Barwick and Dechnicz deliberately concealed the contributory mortgage from the National Bank’; and

(iii) consequently on (i), that the finding referred to in (i) also constituted an irrelevant consideration.

189 It is open to the Tribunal to form the view that the errors demonstrated are not of sufficient significance to warrant any interference with the order made. The Law Society submitted, quoting Stead v State Government Insurance Commission (1986) 161 CLR 141 at 147 that this is a case where ‘a properly conducted trial could not possibly have produced a different result.’ In Stead the High Court noted that there can be circumstances where a failure to accord procedural fairness might not result in setting aside of the decision under appeal.

190 The Law Society also referred in its submissions to Dare v Pullham (1982) 148 CLR 658. There a jury verdict for damages in excess of the claim for damages as particularised was left standing and not reduced. The High Court was satisfied that there was evidence to support the higher amount. This is a case of limited relevance, as we see it, to the question of the proper scope of findings based on particularised charges in a professional disciplinary context.

191 Mr Barwick referred to Murray v Legal Services Commissioner [1999] NSWCA 70 where the Court of Appeal found procedural unfairness and rejected a submission that the error would have made no difference to the outcome. There the Court found that the Legal Services Commissioner had not extended to the practitioner an adequate opportunity to be heard on the question of whether the conduct in issue was such that it must be referred pursuant to s 155 of the Act to the Tribunal for inquiry (and the possibility thereby arising, if found proven, of being struck off). The Legal Services Commissioner had failed to supply the practitioner with a copy of the original complaint. That failure was found to constitute a denial of procedural fairness which had vitiated the institution of the proceedings in the Tribunal. To similar effect, see Carson v Legal Services Commissioner [2000] NSWCA 308 esp per Sheller JA at [45-48].

192 Before turning to consider the seriousness or otherwise of the errors, it is desirable to refer briefly to recent judicial statements as to the object of disciplinary orders.

193 As Kirby P noted in Law Society of NSW v Foreman (1994) 34 NSWLR 408 at 412:

‘[H]igh standards are expected of legal practitioners, particularly in their dealings with clients and the courts. This is so that members of the public, litigants, other practitioners and the courts themselves can have confidence in the integrity of those who enjoy special privileges as legal practitioners.

This Court is the guardian of the maintenance of those standards. It is still the case that the Court accredits to the public legal practitioners who are put forward as people who can be trusted; whose word can be accepted as truthful; who will not involve themselves in shabby, deceptive and dishonourable conduct.’

194 Mahoney JA in the same case at 441 said:
‘The protection of the public has been described as, for example, the primary purpose or a purpose or a primary object of such [i.e. disciplinary] proceedings …. In the relevant sense, the protection of the public is in my opinion not confined to the protection of the public against further default by the solicitor in question. It extends also to the protection of the public against similar defaults by other solicitors and has, in this sense, the purpose of publicly marking the seriousness of what the instant solicitor has done.’
195 As to error (i) and the companion error (iii), we have already expressed the view that this was a minor matter in the overall context of the case. The reference to the ultimate intention of Mr Barwick was not necessitated by the Information. Nonetheless this was not an error of sufficient degree to warrant a conclusion that procedural fairness was denied to Mr Barwick to such a degree that its conclusion that he should be removed from practice might have been different.

196 Our preferred view is that the matter we have referred to under (ii) is, when read in light of the closing submissions of counsel for Mr Barwick, not an error: see para [125] above. However we consider the alternative view that it is an error, and explain our conclusion that even if it is an error it is not one warranting interference with the Tribunal’s decision.

197 The case for concluding that the statement at para [286] of the reasons was an error rests on the contention that the particulars did not require the question of ‘deliberate concealment’ to be addressed. It is a conclusion of some gravity, and arguably Mr Barwick should have had an opportunity to respond in light of Smith’s case.

198 This was only one matter in the context of a case where numerous serious transgressions of professional standards were found. This statement concerned the partners’ relationship with the National Australia Bank. They were heavily, and increasingly, in debt to the Bank.

199 The order made by the Tribunal would not, in our view, have been any different had the Tribunal not formed a view on the partners’ conduct towards the Bank. This finding was not one that could, reasonably viewed, have significantly tilted the balance in relation to the order finally made.

200 In that regards, we emphasise the numerous serious transgressions admitted started with the taking of trust moneys without authority and in an irregular way (to put it at its best light). It is well accepted that the misuse of trust account funds is a matter that will ordinarily call for striking off.

201 The trust account is ‘sacred’: ‘trust accounts should be sacred, so that moneys paid into the account should only be paid out to the persons to whom the money belonged, or as directed’: In re a Practitioner [1941] SASR 48 at 51.

202 It is no reply that the practitioner intended to pay the money back, and did so. Conduct of this kind remains ‘an affront to the sanctity of a practitioner’s trust account’: In re a Practitioner (1982) 30 SASR 27 at 31 per King CJ. King CJ went on to say at 31, responding to the circumstances of that case (short term holding of client funds before payment into the trust account):

‘The public can feel confidence in legal practitioners and their handling of their money only if they know that there is involved no element of judgment on the part of the practitioner, and their money must remain in his Trust Account until it is disbursed in accordance with their direction; because no matter how good the intentions of a practitioner might be, no matter how confident he might be that the money can be made good, whenever a client’s money is deliberately used for a purpose other than the purpose for which the client entrusts it to the practitioner, there is an act of dishonesty on the part of the practitioner and one which exposes the client to some risk as to his money. There are two aspects of such misuse of trust moneys held for clients: (1) the clients are exposed to some risk, great or small, depending upon the situation, as to their money, and (2) there is a dishonest misuse by the practitioner of money which does not belong to him for his own purposes and, of course, free of interest.’
To similar effect, see Dupal v Law Society of New South Wales (unreptd, 26 April 1990) per Handley JA at 23: ‘Sympathy for [the solicitor] and for the tragedy that he has brought on himself and his family by his inability to live up to the high standards which this Court and the profession demand of solicitors can not be allowed to deflect this Court from doing its duty’: cited with approval by Sheller JA in Law Society of New South Wales v Bannister (1993) 4 LPDR 24 (CA) at 30.

203 Mr Barwick’s abuse of trust was the first of a series of serious transgressions. The totality of the misconduct involved three strands of activity on the part of Mr Barwick: the use of his sister’s assets to prop up the ailing practice, his use of the Wilkinson Estate to the same end, and his conduct in response to the Law Society’s inquiries, in particular the creation of file notes. The findings on the admitted matters in respect of each of these strands of activity could, in our view, have comfortably supported a striking off order. This is not a case of a ‘solitary lapse’ (to use the words of Isaacs J in Incorporated Law Institute of New South Wales v Meagher (1909) 9 CLR 655 at 681).

204 While the conclusion that the partners had been engaged in ‘deliberate concealment’ is of a more serious dimension than the errors identified as (i) and (iii), it is not of sufficient significance to warrant interfering with the order; nor would all three of the possible errors read together.

205 There were submissions from Mr Brereton that any finding on the part of the Appeal Panel that the Tribunal dealt with Mr Barwick in a procedurally unfair way must lead inevitably to the conclusion that the proceedings are void, and the Information must be remitted for rehearing by the Tribunal. Before reaching that question, the Panel must be satisfied that there is an error of sufficient significance to vitiate the decision. Stead’s case recognises that that is the next step once an error is identified. This was not shown. Accordingly we have not dealt with Mr Brereton’s submissions on this point.

206 The Law Society applied for a costs order in its favour if the appeal was dismissed. Section 171E of the Act provides that in the event of a finding of guilt the practitioner may be ordered to pay the Law Society’s costs. On one view the same principle applies to Appeal Panel proceedings, as the Appeal Panel is part of the Tribunal: see Tribunal Act, s 4 definition of ‘Appeal Panel’. If it is not the case that the rule in s 171E applies directly to the Appeal Panel, then we are of the view that the underlying rule applying to this class of proceedings provides a ‘special circumstance’ within the meaning of s 88(1) of the Tribunal Act. Accordingly, in legal profession discipline appeals the appropriate order is that the unsuccessful appellant pay the costs of the respondent.


ORDER
1. Appeal dismissed.

2. Respondent to pay the Law Society’s costs of the appeal.