Berger v Council of the Law Society of New South Wales

[2019] NSWCA 119

Court of Appeal

Supreme Court

New South Wales

• Summary available

Medium Neutral Citation:	Berger v Council of the Law Society of New South Wales [2019] NSWCA 119
Hearing dates:	18 and 19 October 2018
Date of orders:	23 May 2019
Decision date:	23 May 2019
Before:	Meagher JA at [1], Payne JA at [2], Simpson AJA at [381]
Decision:	(1)   Appeal dismissed. (2)   Mr Berger to pay the costs of the Law Society of the appeal.
Catchwords:	OCCUPATIONS – legal practitioners – penalty appeal – whether the Tribunal erred in removing the solicitor’s name from the roll – failure to make costs disclosures and provide costs agreement to clients – causing deficiencies in trust account – misappropriation of trust monies – applying received monies in breach of the terms of agreement under which they were received – overcharging – purporting to act as executor when no grant of probate – purporting to act as attorney when donor of power was deceased – breach of costs disclosure undertakings given to Legal Services Commissioner – failure to comply with Supreme Court order – Legal Profession Act 2004 (NSW) – Legal Profession Act 1987 (NSW)   OCCUPATIONS – legal practitioners – whether a case of dishonesty had been pleaded or conducted – whether findings made by the Tribunal of dishonesty were open – whether findings made by the Tribunal that the appellant knew he was acting dishonestly were open
Legislation Cited:	Civil and Administrative Tribunal Act 2013 (NSW), Schs 1, 4, 5 Legal Profession Act 1987 (NSW), s 180 Legal Profession Act 2004 (NSW), ss 254, 255, 259, 309, 310, 311, 312, 316, 317, 328, 368, 370, 372, 393, 496, 497, 562 Legal Profession Uniform Law (NSW), Sch 4 Probate and Administration Act 1898 (NSW), s 61 Supreme Court Act 1970 (NSW), ss 48, 75A Uniform Civil Procedure Rules 2005 (NSW), rr 51.36, 51.53
Cases Cited:	Achurch v The Queen (2014) 253 CLR 141; [2014] HCA 10 Atwells v Jackson Lalic Lawyers Pty Ltd (2016) 259 CLR 1; [2016] HCA 16 Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34 Council of the Law Society of NSW v Doherty [2010] NSWCA 177 Dupal v The Law Society of New South Wales [1990] NSWCA 56 Ex parte Lenehan (1948) 77 CLR 403; [1948] HCA 45 Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 Johns v Law Society of New South Wales [1982] 2 NSWLR 1 Konstantinidis v Council of the Law Society of New South Wales [2018] NSWCA 59 Kumar v Legal Services Commissioner [2015] NSWCA 161 Macleod v The Queen (2003) 214 CLR 230; [2003] HCA 24 New South Wales Bar Association v Cummins (2001) 52 NSWLR 279; [2001] NSWCA 284 O’Connor v Fitti [2000] NSWSC 540 Peters v The Queen (1998) 192 CLR 493; [1998] HCA 7 Pham v Legal Services Commissioner [2016] VSCA 256 Prothonotary of the Supreme Court of NSW v P [2003] NSWCA 320 R v Ghosh [1982] QB 1053 Smith v New South Wales Bar Association (1992) 176 CLR 256; [1992] HCA 36
Category:	Principal judgment
Parties:	Victor Berger (Appellant) Council of the Law Society of New South Wales (Respondent)
Representation:	Counsel: D A Lloyd / M Kalyk (Appellant) B Tronson / M Nesbeth (Respondent)   Solicitors: Remington & Co (Appellant) Law Society of New South Wales (Respondent)
File Number(s):	2018/00035941
Publication restriction:	None
Decision under appeal	Court or tribunal: Civil and Administrative Tribunal of New South Wales Jurisdiction: Occupational Division Citation: [2017] NSWCATOD 137 [2018] NSWCATOD 4 Date of Decision: 21 September 2017 5 January 2018 Before: Hon G Mullane ADCJ (Principal Member), M Riordan (Senior Member), E Hayes (General Member) File Number(s): 2015/00383879 2016/00378630

HEADNOTE

[This headnote is not to be read as part of the judgment]

The appellant was found guilty of professional misconduct and unsatisfactory professional conduct and removed from the roll: [2017] NSWCATOD 137; [2018] NSWCATOD 4. Between 2005 and 2013, the appellant failed to make costs disclosures and provide costs agreement to clients, caused deficiencies in a trust account, misappropriated trust monies, applied received monies in breach of the terms of agreement under which they were received, engaged in overcharging, purported to act as executor when there was no grant of probate, purported to act as attorney when the donor of power was deceased, breached costs disclosure undertakings given to the Legal Services Commissioner, and failed to comply with a Supreme Court order.

The issues on appeal were:

(i)    whether the Law Society had pleaded or conducted a case alleging dishonesty;

(ii)   whether findings made by the Tribunal that the appellant knew he was acting dishonestly were open; and

(iii)    whether the appellant’s conduct warranted an order that he be removed from the roll.

In relation to (i), Payne JA (Meagher JA and Simpson AJA agreeing) held at [249], [276] and [383]:

Although the Law Society had not sufficiently pleaded a case alleging dishonesty, it was clear that from the beginning it conducted a case of dishonesty in relation to payments of $154,000 and $20,000 the appellant made from the estate of a client to himself or to his benefit.

In relation to (ii), Payne JA (Meagher JA agreeing) held at [263], [282]. [287]-[288], [293]-[294] and [358]:

The Law Society did not conduct a case that the appellant knew he was acting dishonestly. The findings by the Tribunal that the appellant knew his conduct was dishonest must be set aside. The fact that a fraudster subjectively believes that dishonest conduct is not “dishonest” is not relevant to proof of dishonesty.

Peters v The Queen (1998) 192 CLR 493; [1998] HCA 7; Macleod v The Queen (2003) 214 CLR 230; [2003] HCA 24; Council of the Law Society of NSW v Doherty [2010] NSWCA 177; Pham v Legal Services Commissioner [2016] VSCA 256 applied.

In relation to (ii), Simpson AJA held at [384]:

It was open to the Tribunal to reach the conclusion that the appellant’s conduct was illegal and dishonest and that the appellant knew that his conduct was illegal and dishonest.

In relation to (iii), the Court (Payne JA, Meagher JA and Simpson AJA agreeing) dismissed the appeal and held at [379] and [385]:

An independent consideration of all the evidence leads to the same conclusion reached by the Tribunal. The appellant’s name should be removed from the roll.

Judgment

1. MEAGHER JA: I agree with Payne JA.

2. PAYNE JA: Mr Victor Berger was admitted as a solicitor in New South Wales in 1969. He practised continuously until his practising certificate was first suspended in 2013. In October 2015, the Law Society commenced proceedings in the NSW Civil and Administrative Tribunal (“the Tribunal”) seeking an order that Mr Berger’s name be removed from the roll. Mr Berger admitted many of the detailed particulars of the Complaint, but contended that his conduct did not warrant an order removing his name from the roll.

3. On 31 October 2017, the Tribunal found Mr Berger guilty of professional misconduct and unsatisfactory professional conduct on multiple grounds.

4. On 5 January 2018, following a second hearing, the Tribunal ordered that Mr Berger’s name be removed from the roll of local lawyers.

5. This appeal from that order is in essence a penalty appeal. Many of the findings of the Tribunal were accepted. The essence of Mr Berger’s complaint is that the findings of what was described as “subjective” dishonesty made by the Tribunal were not open. It was submitted that if this Court upheld any of the grounds of appeal it should not remit the matter to the Tribunal. Instead it could and should determine the question of whether Mr Berger was probably permanently unfit to practise law and make appropriate orders.

6. The circumstances giving rise to the Complaint principally involved a Mrs Domabyl, a Mrs Dougall, a Ms Frischer and a company Storey Street Development Pty Limited. For reasons which were never made clear, the Tribunal referred to the individuals involved by pseudonyms. No pseudonym orders were ever made. No such orders were sought in this Court.

7. Despite the limited number of clients involved, there was considerable detail in the particulars of the Complaint. The matter was made more difficult than it should have been because of the way the Law Society framed the Complaint, relying on an overlapping series of particulars in addressing each of the separate subjects of the Complaint.

8. The reasons of the Tribunal were correspondingly difficult to follow because in order to address each of the relevant aspects of the Complaint, the Tribunal found it necessary to deal with the conduct thematically and, as a result, adopted a new numbering system to address the issues in a way that the Tribunal found satisfactory. To enable the essence of the conduct complained of to be understood before considering the grounds of appeal, it is necessary first to set out chronologically, and in some detail, the relevant facts as they appear from the Tribunal’s reasons and the primary documents (all typographical errors in the quoted passages are as they appear in those documents), and then to summarise the Tribunal’s reasons before addressing each of the grounds of appeal. As will become apparent when addressing the grounds of appeal, the appellant has introduced yet another numbering system to attempt to address in response to the complexity engendered by what had gone before. This is not a criticism of Mr Lloyd, who appeared for Mr Berger in this Court and ably represented his interests but rather a commentary on the way the case was framed and dealt with by the Law Society.

Relevant facts

9. On 14 February 1969, Mr Berger was admitted to the roll of solicitors in NSW. In 1970, he became a partner in the firm JW Milne and Berry.

10. In about February 2005, Mr Berger was introduced to Mrs Domabyl and took instructions from her to prepare her will. No costs disclosure or costs agreement was provided to Mrs Domabyl. As will become apparent, the Tribunal found that Mr Berger was obliged to make a costs disclosure to her at this time and to provide updated costs disclosures thereafter.

11. On 4 June 2006, Mr Berger became a principal of the firm Milne Berry Berger & Freedman (“MBBF”). On 27 November 2007, Mrs Domabyl granted Mr Berger a general power of attorney. Again, no costs disclosure or costs agreement was provided.

12. On or before 6 April 2008, Mr Berger took instructions from Mrs Dougall. On 6 April 2008, Mrs Dougall executed a will nominating Mr Berger as the executor, and granted Mr Berger a power of attorney. No costs disclosure or costs agreement was provided to Mrs Dougall.

13. On 18 March 2009, Mr Berger gave the Office of the Legal Services Commissioner an undertaking (“2009 Disclosure Undertaking”) in the following terms:

“… I am willing to give the undertaking you seek that we will comply with such obligations to disclose the basis of our costs in all matters in that which we are retained.”

14. The 2009 Disclosure Undertaking was given in response to a complaint made by a Mrs Treadgold to the Legal Services Commissioner regarding Mr Berger’s failure to make a costs disclosure or provide a costs agreement. Notwithstanding the terms of this undertaking, Mr Berger did not make a costs disclosure or provide a costs agreement to Mrs Domabyl, either at this time or at any time before her death.

15. On 13 July 2009, Mrs Domabyl executed a will nominating Mr Berger and Mr Green, an accountant, as executors. The will was drafted by Mr Berger. No costs disclosure or costs agreement was provided to Mrs Domabyl. During 2010, Mr Berger provided services of a general nature to Mrs Domabyl with an increased frequency. Again, no costs disclosure or costs agreement was provided to Mrs Domabyl.

16. On 18 April 2011, Mr Berger prepared the seventh and final codicil to Mrs Domabyl’s will. No costs disclosure or costs agreement was provided to Mrs Domabyl.

17. On 25 April 2011, Mr Berger emailed Mrs Domabyl’s estranged husband, Mr Jan Domabyl, who resided in the Czech Republic:

“I am greatly troubled by the state of health of Mrs Domabyl. I have several timed broached her moving to a nursing home. She seems more frequently weak and I worry about her eating and taking her medication. At least at a nursing home that would be assured, to say nothing of any action should she injure herself in any way. kindly let me have your thoughts and if you favour that help me achieve it.”

18. In about July 2011, the other partners of MBBF, Mr Freedman and Ms Gopalan, became aware of the very substantial amount of work in progress (“WIP”) charged by Mr Berger to Mrs Domabyl’s file and sought advice from Mr Gulley, an expert solicitor and costs assessor, in relation to Mr Berger’s failure to provide a costs agreement or to make any disclosure about costs or the basis of costs charged to Mrs Domabyl. Mr Berger was aware of the request and prepared a chronology for Mr Gulley.

19. On 23 September 2011, Mr Freedman and Ms Gopalan sent Mr Berger a letter setting out their concerns about his handling of Mrs Domabyl’s matters. This was an important letter. In it, Mr Berger’s partners expressed serious concerns about the non-disclosure of costs by Mr Berger to Mrs Domabyl. The letter described Mrs Domabyl, correctly, as a vulnerable client. The letter referred to various of the statutory obligations to disclose costs to a client and pointed out the serious consequences for Mr Berger and the firm of a failure to do so. The letter, signed by Mr Freedman, is sufficiently important to set out at length:

“For many months now [Ms Gopalan] and I have expressed our real concerns at what is occurring in relation to the affairs of Mrs Domabyl. I attempted to raise this with you informally at some finance meetings however I was not able to deal with my concerns in a meaningful way. When I did try and discuss the matter with you, you repeatedly asserted that you were acting in compliance with our regulations. Putting aside the other issues we discussed that evening, I raised with you my concerns not only at the amount of the unbilled WIP, but the fact that it appeared to me that there had been no costs disclosure whatsoever. On that occasion you responded to me by saying that “the Legal Profession Act does not require a Cost Agreement· to be required for each file.” I questioned that and you said that you would provide me with a copy of the relevant section. That never occurred.

I was concerned in so many ways in relation to what was happening in the Domabyl file. There was no cost disclosure. You were charging her for numerous activities which I am sure she was not aware that she had been charged for. Having at that time experienced three cost determinations which cost the firm dearly because there had been no costs disclosure by you and also being extremely concerned if any potential liability might fall over me and [Ms Gopalan], we agreed to nominate Mr Richard Gulley to express his opinion as to whether or not there was a requirement [upon] you for a cost disclosure to be made and what the consequences would be in these circumstances where no costs disclosure had been issued. Both you and I knew [Mr Gulley] and clearly felt that he was an appropriate person to express an opinion in this matter. He is well regarded in the profession and also has vast experience not only as a practitioner but having participated on various boards and committees within the Law Society.

I think it is appropriate for the purposes of this letter to set out parts of what [Mr Gulley] has written. You will see at the top of page 2, …

“The effect of non disclosure is set out in Section 182 of the Act. … Section 182(4) which provides that the failure is capable of being unsatisfactory professional conduct or professional misconduct.

It is probably more fair to say in the circumstances this matter of disclosure was even more essential when you consider the situation of the testator who could be regarded as more vulnerable than others of younger years. I do not know of any matters where the section has been applied, however that is not to say that it has not. To address the other issues raised by you in respect to disclosure, my view is that the responsibility of disclosure rests with Victor Berger. I see no reason for any responsibility to attach to a partner.”

…

It is reasonable to assume that [Mr Gulley] read all of the material contained in the initial brief and also in your chronology. He has not completely answered all of the specific issues that I raised with him and I have asked him to address those and respond as soon as possible and then to issue an account.

I understand [Mr Gulley]’s letter was forwarded to you whilst you were overseas and you acknowledged having read it in your email to me dated 12 September 2011 in which you state, inter alia, “I see the attached. In general I leave it to you to inform me what is to follow.”

I found this response to be even more disconcerting. For many months you knew this was a matter which was worrying me significantly. I had raised with you my concerns and I recall at least one email saying I was concerned on your behalf as to the consequences of your behaviour. There was no doubt in my mind when I first became aware that you were charging such significant sums of money with no cost disclosure that this must be a breach of the Legal Professions Act. Yet when I made these claims to you, you consistently denied them as any such breach and stated that the worse that could happen is that we would have the bill assessed and loose some money. On at least three occasions I remember you saying, I am quite happy to get into the witness box.

…

We spoke with two members of the Law Society and described to them the basic issues involving this matter which were contained in the observations to [Mr Gulley]. They expressed opinions that they thought the situation was extremely serious and as a consequence we should write this letter to you.

There can no longer be any doubt, ambiguity or possible alterative interpretations to there being clearly a long standing and continuing breach of the Legal Profession Act. The Law Society representatives used the same expression as [Mr Gulley] did in his letter to us in saying that someone in Mrs Domabyl’s capacity who is elderly and isolated has an ever greater need to have explained to her the basis upon which the solicitor was being engaged and with respect to which charges were to be made.

…

How can the situation be resolved?

The Law Society suggested two options:-

1. The first option: we believe that this is the appropriate action to follow and that is that you agree that the firm waive all charges presently being recorded in this matter and so as to avoid any further criticism you stand aside as her executor. The mental condition is such, as we understand it that a Guardian ought to be appointed and her affairs managed on that basis until her death.

It would also be appropriate that you return any monies that you receive from her, either as a gift or as fees that have been charged and paid for some years ago.

2. The second option: arises in the event that you are not prepared to agree for the firm [to] follow the first option. To avoid any liability both professional or financial against us and the impact that it would have on our reputations and relationships with existing and potential clients and to avoid prosecutions and claims, should you not agree to option 1 then we must give notice of our intention to terminate the partnership.”

20. On 23 September 2011, Mr Berger met with Mr Freedman and Ms Gopalan to discuss Mrs Domabyl’s file. On 25 September 2011, Mr Berger emailed Mr Freedman:

“Our conversation on Friday caused me to see the perception you had about this matter. My perception had been, and my remarks from time to time to you and by email, were based upon the conclusion I drew from what I understood from what you were saying that you primary interest was being compensated for what would not be paid of what I had recorded. I was satisfied on Friday that was not your goal and I apologise that I had previously not concluded that.

I will not engage in how we each view differently my charging Mrs. Domabyl for my time, except to say I have agreed that the likelihood would be that the conclusion would be I had made “inadequate disclosure” and that In my view no action would be taken against me as a result nor would there be any liability to the partners.

…

On reflection it seems to me your concern has been the reasonableness of our charge and the criticism that may attract. You generously seek to avoid that by reversing any claim for fees. I am still unhappy that the estate not pay fees at all. In my view that would ne unreasonable and I believe unexpected by the family.”

21. Given the central nature of Mrs Domabyl’s matter to the issues before this Court, the significance of this email should be emphasised. It demonstrates that Mr Berger’s contemporaneous state of mind was that he accepted that any investigation into his conduct would likely conclude that “I had made ‘inadequate disclosure’”. Mr Berger apparently believed, however, that “no action would be taken against me.”

22. On 26 September 2011, Mr Freedman emailed Mr Berger. In that email Mr Freedman explained at some length to Mr Berger that his conduct in charging Mrs Domabyl considerable fees without explaining to her that she or her estate would be charged for those attendances was “morally and legally wrong”. Mr Freedman records Mr Berger stating his contemporaneous view that if he explained to Mrs Domabyl what he was charging her she would “withdraw instructions”:

“Again, if I understand your comments below correctly, it seems once again that you have not understood what I was addressing to you on Friday. Your charging Mrs Domabyl for all the attendances and other activities without explaining to her that she or her estate will be charged is simply morally and legally wrong. The opportunity to rectify the situation again has passed after both [Ms Gopalan] and I raised this with you many months ago. You asked, “what do you want me to do?” I said you should go and meet with her and tell her what you understood the fee arrangement to be, (or words to that effect). Your reply was, “if I do that she will withdraw instructions, is that what you want?” I said I don’t care.

…

I have had advice from the Law Society to the effect that the intention to charge the estate the time recorded, in the circumstances of there being no proper or meaningful disclosure and taking into account Mrs Domabyl’s situation, can be considered to be misconduct and potentially professional misconduct. Unlike [Mr Gulley]’s and your belief, the Law Society could not rule out, that having looked into the Matter, [Ms Gopalan] and I are also potentially liable to a charge of misconduct being aware of the situation and not acting appropriately. Your actions could also be considered to be fraudulent and false and misleading and, it was stated, possibly criminal. There may be civil consequences that follow in the event that any claim for these charges is made and contested.”

23. On 27 September 2011, Ms Gopalan emailed Mr Berger, referring to their meeting on 23 September 2011. The email stated, relevantly:

“I refer to our meeting held on 23/9/2011, during which the concerns relating to this file were raised by [Mr Freedman] and you confirmed the following:

1. That you will waive all the fees charged to date in this file considering that there is no costs agreement.

2. Re monies you have received in the sum of $3500 (towards the invoices) and $10,000 that you received as a gift from this client, you confirmed that you didn’t see any reasons why you had to return it.

But re the outstanding amount outlined in the WIP (as of to date in file no 7062) in the sum of $113,486.71 (inclusive of GST), [Mr Freedman] and I were most concerned especially after having received the advice from the Law Society. The Members who advised us clearly stated that both [Mr Freedman] and I might be held responsible, for professional misconduct, fraud and civil claim by continuously breaching the LPA apart from risking the firm’s reputation and name being tarnished. It is as a result of the unequivocal guidance from the Law Society, the risk exposure to all the partners and the firm; that we sought an urgent meeting with you, upon your returning from your overseas holiday.

From day one, since I have been concerned with the conduct of this file. You will recall that [Mr Freedman] and I had requested you and your team members not to include a $ value when time was being entered in this file. Though you agreed to attend to correcting the problems in June 2011, to date that was not followed. What is further disturbing is that it appears that more charges have been incurred in this file.

I want to make it clear that it is my opinion that the conduct in this file is totally against my principles, ethics and mode of professional conduct. Being the Managing partner, I do not wish to risk the firm, the employees, my career and most importantly an elderly demented (as you say) client, who has approached our firm to do a POA or Will for $2000 and who simply not aware that she is going to be liable for a bill for $113,486 at the very least, when she dies.

If you wish to continue to charge this client, it is evident that there is a real risk that [Mr Freedman] and I may be liable for Professional misconduct (Bridges v Law Society of NSW – (1983) 2 NSWLR and Mayes (1974) 1 NSWLR 19) and I am not prepared to take that risk. I do not wish this upon the client, the firm and myself and hence I simply do not agree.

As far as I am concerned, what difference does it make if you charge $450 an hour or $300 an hour?? At the end of the day, you have not provided a disclosure to this old client of ours and hence according to me, it doesn’t matter whether you charge a mere $25 an hour or any other amount. As far as [Mr Freedman] and I are concerned, when we met you on 23/9/11, we were quite upfront and asked you to waive the entire WIP amount relating to this file. You immediately agreed to it and it is truly disappointing and disheartening to receive this email since.

…

However, issues like this resulting in threat to the reputation of the firm, the inappropriate build of the WIP and the need for subsequent write offs are clearly out of step with the underlying spirit in which the original agreement was entered into.

I hope that we can work this out and I look forward to receiving your response confirming that you will stand by what you agreed to at the meeting held on 23/9/11.”

24. On 27 September 2011, Mr Berger emailed Mr Freedman:

“While I am willing at any time be of your choosing to discuss and conclude each and every matter you refer to below at a time of your choosing as to Mrs. Domabyl’s matter I am motivated by what would be fair to all concerned and if there is reasonable doubt as to flow on to you and [Ms Gopalan] to agree to waive all charges. Neither I nor, do I believe, does [Mr Gulley] have the view that there is any real prospect of liability for you and [Ms Gopalan]. Furthermore inadequate disclosure does not deprive a solicitor from reasonable fees.

I will speak to Gordon Salier who was a leading participant in the creation of assessment, was for a considerable time Chairman of the committee and a very sensible person as to his view on the issues here. I that ok?”

25. On 27 September 2011, Mr Freedman emailed Mr Berger in reply:

“We agreed to have [Mr Gulley] comment on the matter and as a consequence of his comments I have spoken with the Law Society. They have expressed their view as I have described in our meeting on Friday and in my email yesterday, which is that attempts to charge for your time for what you are doing without telling the client is arguably misconduct and possible much worse

The only relief I feel I would get is if you spoke with the Law Society yourself and got a ruling on the matter. Perhaps the 3 of us should arrange a meeting with the Law Society and bring this argument to an end. We had an agreement on Friday which you are trying to change

I see little point in [Mr Salier] expressing his opinion at this stage, because if he is incorrect and some complaint is laid against me and [Ms Gopalan], we would have no relief against [Mr Salier].

If the Law Society made a ruling contrary to what they told [Ms Gopalan] and me then at least if some compliant were laid against us we could use that ruling in our defence.

Nevertheless the impropriety in continuing to charge Mrs Domabyl when she doesn’t know you are doing so is still something that I find unacceptable. I also believe you should have a conversation with her and tell her what you are doing. I don’t know her state of mind but at least you will be seen to be trying to bring it to her attention.

In any event I thought we had an agreement on Friday and I don’t see why we are having to re-canvass the issue again.

What is being done here is simply wrong, and in my opinion can only be rectified by appointing a guardian.”

26. On 29 September 2011, Mr Berger emailed Mr Freedman in reply:

“I am not changing what was agreed on 23 September 2011. I was putting to you, in effect, that I did not believe that we needed to go to the extreme of writing all of the work off. Indeed my not seeking to renegotiate, or however you may have seen the point of my email should have been obvious from my words “if there is reasonable doubt as to flow on to you and [Ms Gopalan] to agree to waive all charges.”

I have made no secret of my severe lack of confidence [in the] attitude of most assessors and “regulators” as to the scope of discretion in, uncertainty in and cost to challenge to determinations. Indeed I have written to the president of the law on the subject who informs me the Supreme Court is to shortly announce a review of the process and the society is likely to announce some guidelines. Furthermore, I have yet to have any more than academic speculating by the officers of the Society though in the case of Nelson, I think it was, I was guided as to how to deal with an OLSC invitation to accept a reprimand withdrawn. Indeed I have achieved 2 out of 2. You will never achieve a ruling on anything worthwhile, [on] anything. If you tell me who you spoke to I would be interested to speak to that person. My reference to [Mr Salier] was because I believe he is best informed and frank.

I have put the thought in my earlier email and here simply to see if we are going too far.

As to appointing a guardian, apart from the protestation from Mrs. Domabyl, Mrs Domabyl is very proud of her view of herself, especially her intellect and memory. She has put this to me each time I have sought to have her capacity examined and does become insulted. Indeed she does have great intellect and memory. She has been highly critical of doctors I have had see her and indeed refuses to let me send anyone to her. She would lose confidence in me and I do not believe we need to go that far. I hate to say it but [it] is a great factor in the dilemma and that is, as I see it:

- I expected not to have much to do with her, especially as her son was caring for her;

- My belief when it became apparent my role grew considerably I believed it was likely she did not have capacity and frankly would not have been surprised if it was found not. My notes illustrate that I spoke to her at various times about my need to not benefit from her and to present her with some agreement would likely be seen as such; and

- She has lived longer than expected;

I am willing to act on the agreement and simply for my own interest take opinions. If that is how this should be left I accept that though suggest on her death I see if I can negotiate something for us.

PS. As to the point on compensation for that was clearly my understanding. Indeed one instance was when we discussed having the bill assessed the proposition appeared to be I pay the shortfall. Anyhow nothing turns on that.”

27. On 30 September 2011, Mr Berger emailed Ms Gopalan. His email took the form of commentary on Ms Gopalan’s earlier email. Mr Berger’s responses are in capital letters:

“I refer to our meeting held on 23/9/2011, during which the concerns relating to this file were raised by [Mr Freedman] and you confirmed the following:

1. That you will waive all the fees charged to date in this file considering that there is no costs agreement.

THIS IS NOT WHAT I SAID.

2. Re monies you have received in the sum of $3500 (towards the invoices) and $10,000 that you received as a gift from this client, you confirmed that you didn’t see any reasons why you had to return it.

I GAVE NO ANSWER. ON REFLECTION AS TO $10,000 I ANSWERED ON 25 SEPTEMBER AND HAVE DONE SO PREVIOUSLY, AS TO ANY OTHER MONEY SAME HAS BEEN DEPOSITED TO HER ACCOUNT.

But re the outstanding amount outlined in the WIP (as of to date in file no 7062) in the sum of $113,486.71 (inclusive of GST), [Mr Freedman] and I were most concerned especially after having received the advice from the Law Society. The Members who advised us clearly stated that both [Mr Freedman] and I might be responsible, for professional misconduct, fraud and civil claims by continuously breaching the LPA apart from risking the firm’s reputation and name being tarnished. It is as a result of the unequivocal guidance from the Law Society, the risk exposure to all the partners and the firm; that we sought an urgent meeting with you, upon your returning from your overseas holiday.

THAT SEEMS EXTRAORDINARY, ESPECIALLY FRAUD. PLEASE NAME THE MEMBER(S)

From day one, since I have been concerned with the conduct of this file. You will recall that [Mr Freedman] and I had requested you and your team members not to include a $ value when time was being entered in this file. Though you agreed to attend to correcting the problems in June 2011, to date that was not followed. What is further disturbing is that it appears that more charges have been incurred in this file.

I HAVE NO SUCH RECOLLECTION

I want to make it clear that it is my opinion that the conduct in this file is totally against my principles, ethics and mode of professional conduct. Being the Managing partner, I do not wish to risk the firm, the employees, my career and most importantly an elderly demented (as you say) client, who has approached our firm to do a POA or Will for $2000 and who is simply not aware that she is going to be liable for a bill for $113,486 at the very least, when she dies.

I THINK I HAVE REMARKED ENOUGH UPON YOUR PRINCIPALS, ETHICS PROFESSIONAL CONDUCT ETHICS, I THINK IT BEST I SAY NO MORE.

If you wish to continue to charge this client, it is evident that there is a real risk that [Mr Freedman] and I may be liable for Professional misconduct (Bridges v Law Society of NSW – (1983) 2 NSWLR and Mayes (1974) 1 NSWLR 19) and I am not prepared to take that risk. I do not wish this upon the client, the firm and myself and hence I simply do not agree.

I REFER YOU TO MY EMAIL TO [MR FREEDMAN] LAST SENT BEFORE THIS ONE TO YOU.

AS TO THE CASE REFERENCE I WILL ASSUME YOU WERE GIVEN IT BY ANOTHER PERSON AND PERHAPS, EVEN, THAT YOU HAVE NOT READ IT. IT IS, PUTTING IT MILDLY, INAPPROPRIATE FOR IT TO BE PUT FORWARD AS AUTHORITY FOR THE PROPOSITION YOU ASSERT IT SUPPORTS.

INDEED IT REMINDS ME OF A CASE WHERE THE RYDE POLICE THREATENED TO ISSUE PROCEEDINGS AGAINST ME FOR PERVERTING THE COURSE OF JUSTICE WHERE I QUESTIONED THE ACCURACY OF WHAT RECORDED IN THE STATEMENT OF THE COMPLAINANT AND WANTED TO TAKE A STATEMENT FROM HER. I ASKED FOR AUTHORITY AND WHEN I FINALLY GOT SOME AND HAVING READ IT PUT TO THE POLICE THEY WERE WRONG AS IT COULD NOT, FOR INSTANCE, BE EXPECTED I WOULD THREATEN THE COMPLAINANT OF PUSH HER HEAD UNDER WATER. INDEED WE WON THE CASE.

As far as I am concerned, what difference does it make if you charge $450 an hour or $300 an hour?? At the end of the day, you have not provided a disclosure to this old client of ours and hence according to me, it doesn’t matter whether you charge a mere $25 an hour or any other amount. As far as [Mr Freedman] and I are concerned, when we met you on 23/9/11, we were quite upfront and asked you to waive the entire WIP amount relating to this file. You immediately agreed to it and it is truly disappointing and disheartening to receive this email since.

YOU SAID VERY LITTLE., INDEED ALMOST NOTHING. YOU ARE MISSING THE POINT OF MY LAST 2 EMAILS AND INDEED WONDER IF YOU READ MY SUBMISSION TO RICHARD GULLEY. IT SEEMED TO ME YOU MAY HAVE NOT READ HIS REPLY OR, AT LEAST, THE MOST IMPORTANT PART OF IT DID NOT REGISTER

I AM UNHAPPY TO ADD AS A GENERAL COMMENT, ON YOUR CHOICES OF EXPRESSION, YOU SHOULD STICK TO FACTS AND NOT SEEK EMPHASIS BY RECORDING HOW YOU FEEL ABOUT THEM. INDEED YOUR DOING SO IS VERY REVEALING OF WHETHER YOU COME TO A SUBJECT WITH ADEQUATE IMPARTIALITY. I AM CONFIDENT THAT IF [MR FREEDMAN] WAS THE TARGET OF THE ABOVE KIND OF CORRESPONDENCE AND INDEED A NUMBER OF SIMILAR TENOR IN THE PAST HE WOULD BE FAR MORE BLUNT AND AGGRESSIVE THAN I HAVE EVER BEEN.

…

However, issues like this resulting in threat to the reputation of the firm, the inappropriate build of the WIP and the need for subsequent write offs are clearly out of step with the underlying spirit in which the original agreement was entered into.

WHAT DO YOU WISH ME TO SAY? I HAVE WORKED AND DO WORK VERY HARD (I WILL BE REMINDED SO HAVE [MR FREEDMAN] AND YOU). IAM DISAPPOINTED, TO SAY THE LEAST, AT THE TURN OF EVENTS, ESPECIALLY THE EXPERIENCE OF INABILITY TO RELY UPON CLIENTS TO PAY THEIR FEES AND/OR TO APPRECIATE THE INDULGENCES WE EXTEND TO THEM AS IN THE PAST, EVEN THE RECENT PAST. I DO NOT SAY THAT TO TRIVIALISE. IT IMPACTS UPON ALL OF US AND WE MUST WORK AND FOCUS OUR ENERGIES UPON IMPROVEMENT AND LESS TIME ON OTHER PREOCCUPATIONS. I OFTEN HAVE SAID OUR STAFF KNOW MORE THAN AND ARE SMARTER THAN YOU THINK. THEY KNOW OF THE TENSIONS BETWEEN US, KNOW WHAT WE EACH DO AND WHAT WE REALLY THINK OF THEM. THAT SEEEM TO ESCAPE PROPER CONSIDERATION. UNFORTUNATELY IT APPEARS OTHERS OUTSIDE THE OFFICE ARE ACQUAINTED WITH ISSUES WITHIN OUR OFFICE.

I hope that we can work this out and I look forward to receiving your response confirming that you will stand by what you agreed to at the meeting held on 23/9/11.

I DO NOT NEED TO REPEAT MYSELF HAVING NOT CHANEGD MY POSITION SINC 23 SEPTEMBER 2011.

Thank you,

VICTOR BERGER

Ps. IT IS A MATTER FOR YOU IF YOU RESPOND. I DO NOT REQUIRE ONE.”

28. On 1 October 2011, Mr Freedman emailed Mr Berger:

“I have read all the recent emails passing between the 3 of us.

I choose not to comment on any issue other than what we have all agreed last Tuesday re Domabyl, and that was the partnership agreed that all billable wip is to be written off and no further billable time is to be recorded

I record that you did not agree with this personally but accepted that for the concerns that [Ms Gopalan] and I expressed, this was the partners decision

Please confirm so I can maintain a record of this decision”

29. On 1 October 2011, Mr Berger emailed Mr Freedman and Ms Gopalan in reply:

“Agreed!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!”

30. Pausing there, it appeared at least objectively that on 1 October 2011 Mr Berger had agreed in writing with the other partners of MBBF that:

1. MBBF would write off all billable work in progress recorded for work done by the firm for Mrs Domabyl – then standing at a figure of $113,486; and

2. Mr Berger (and the firm) would not record any further billable time as work in progress in relation to Mrs Domabyl’s file.

31. On 1 October 2011, Mr Berger emailed Ms Donovan (his secretary), Mr Freedman and Ms Gopalan:

“The firm has decided any further work is not to be billed and past work written off. I ask that the time be recorded.”

32. On 16 January 2012, Ms Gopalan emailed Mr Berger and Mr Freedman:

“Any reason, why wip is being recorded in this file in spite of what was agreed? $5752 is the outstanding WIP after having written off $113,000 plus.”

33. On 23 January 2012, Mr Berger replied to Ms Gopalan and Mr Freedman, copying in Ms Donovan:

“Was in error.”

34. Pausing there, it is clear that as at 23 January 2012 Mr Berger represented to his partners that work in progress was not being recorded against Mrs Domabyl’s file. That is, the 1 October 2011 agreement was being complied with.

35. From 26 January 2012, Mrs Domabyl became unable to provide instructions. On 3 February 2012, Mrs Domabyl’s power of attorney in favour of Mr Berger was registered.

36. On 15 March 2012, Mr Berger gave the Office of the Legal Services Commissioner a further undertaking to comply with costs disclosure requirements (“2012 Disclosure Undertaking”) as follows:

“I proffer a further undertaking to ensure compliance with my obligations in the future.

Please note I will be particularly cautious in the future in relation to my disclosure obligations.”

37. The 2012 Disclosure Undertaking was given in response to a complaint made by a Mrs Adzioiski to the Commissioner regarding Mr Berger’s failure to make a costs disclosure or provide a costs agreement.

38. On 22 March 2012, Mr Berger issued a Standard Costs Agreement and Costs Disclosure in relation to the sale of Mrs Domabyl’s property, being Bougainvillea Retirement Village, 73/260-270 Military Road, Neutral Bay (“the Domabyl Property”). The costs estimate provided was $1,705. Mrs Domabyl, who was by that time mentally incapable, did not sign either document. By this date, Mr Berger’s costs and disbursements already recorded in relation to the sale of the Domabyl Property amounted to $1,852.29 inclusive of GST.

39. On 24 May 2012, Mr Berger sent a letter addressed to himself as Mrs Domabyl’s attorney, enclosing a copy of an “Activity Ledger Card” in relation to the sale of the Domabyl Property. The letter stated:

“We have marked with a “tick” in respect of those attendances which in our view are outside of what has been proved for in Clause 1 of the cost agreement. This adds up to $2,307.00, plus GST. What we quoted to you is our usual quote on a sale of property.”

40. The letter was purportedly copied by email to Mrs Domabyl’s estranged husband, Mr Jan Domabyl, and estranged son, Mr Robert Domabyl, who resided in the Czech Republic.

41. In about May 2012, Ms Frischer retained Mr Berger to prepare her will.

42. On 5 June 2012, and despite the agreement with his partners on 1 October 2011, Mr Berger sent a letter on behalf of MBBF to Mr Jan Domabyl and Mr Robert Domabyl, enclosing a detailed account for MBBF’s fees and disbursements for work said to have been done by the firm for Mrs Domabyl amounting to $176,800.94. A tax invoice from MBBF in that amount was provided.

43. On 22 June 2012, and despite the agreement of 1 October 2011, Mr Berger sent a further letter on behalf of MBBF to Mr Robert Domabyl and Mr Jan Domabyl, enclosing an invoice and a more detailed fee schedule which recorded the identity of the person performing each item of work, units of work performed and the unit billing rate (“Revised Fee Schedule”). The Revised Fee Schedule included $90,527.04 in respect of charges for non-legal and power of attorney work, $28,533.52 in respect of charges for work the purpose of which was unclear and $2,432.72 in respect of disbursements the purpose of which was unclear.

44. In about August 2012, Mr Berger was the sole director and shareholder of a company, Storey Street Development Pty Limited (“SSD”). SSD was the vendor of Lot 1 in an off the plan property development on Storey Street, Maroubra. SSD were in negotiations with a Mr and Mrs Ho in relation to the sale of Lot 1. The solicitor for Mr and Mrs Ho was a Mr Paffas of Paffas Lawyers and the solicitor for SSD was Mr Berger. There was correspondence between the parties about Special Condition 12 in the contract for sale.

45. On 8 August 2012, Paffas Lawyers wrote to MBBF, stating: “Delete special condition 12 (release deposit)”. On 9 August 2012, Ms Kunhi, a conveyancer at MBBF, emailed Mr Paffas in reply, attaching a draft letter which stated: “The deposit is to be released and special condition 12 may be deleted.” That same day, Mr Paffas emailed Ms Kunhi in reply, stating: “Your answer seems to say the the deposit is to be released and that special condition 12 can be deleted. I presume you may have left a word out of your reply and that you meant the deposit does not need to be released. Please confirm.”

46. On 10 August 2012, Ms Kunhi emailed Mr Berger confirming a telephone conversation she had with “Elizabeth (secretary) [who] rang for Mr Paffas noting that their latest instructions were: … 2. ‘Not agreed as to issue about release of deposit’”. That same day, Mr Berger and Mr Paffas had a telephone conversation about Special Condition 12.

47. On 13 August 2012, Mr Berger emailed Mr Paffas:

“I have tried to make the amendment myself as secretary had to leave and was unable to other than the way I am sending it to you. She will format in the morning. The deletions agreed to may be done in hand.

…

SPECIAL CONDITION NO: 12 – RELEASE OF DEPOSIT

Notwithstanding any other provision hereof and in particular Clause 2 hereof should the Vendor require the whole or part of the deposit paid hereunder for use as deposit on the purchase by the Vendor of another property: stamp duty in respect to such property and such other reasonable disbursements in respect of such property and the Vendor shall be entitled to apply the whole or any part of such property and the Vendor shall be entitled to apply the whole or any part of the deposit hereunder for that purpose provided that the Vendor’s Solicitor shall advise the Purchaser’s solicitors prior to applying the whole or any part of the deposit the following details:-

(a) the address of the property to be purchased by the Vendor;

(b) the amount of the deposit hereunder to be applied to the purchase; and

(c) the manner in which the monies are to be held;

The Purchaser shall if so required provide the Vendor’s Solicitors with an authority to the agent to give effect to the provisions of this Clause.”

48. On 13 August 2012, Paffas Lawyers wrote to MBBF, stating: “Only 5% shall be released to your client.” On 14 August 2012, Paffas Lawyers sent a further letter to MBBF, stating: “Release of deposit to only apply once the plan is registered at the land titles office. Please amend that clause accordingly”.

49. On 15 August 2012, Mr Paffas emailed Mrs Ho, stating that SSD had indicated that it was “a deal breaker” if it was not agreed that the deposit be released on exchange of contracts:

“Release deposit - they said that this is a deal breaker for them ie if you don’t agree to release of deposit on exchange of contracts (ie straight away) then there is no deal and they won’t exchange with you.”

50. On 15 August 2012, Ms Kunhi recorded that a “Rachel” of Paffas Lawyers called her “confirming that 5% deposit is agreed to be released”.

51. On 16 August 2012, the contract was executed by Mr Berger for SSD as vendor and by Mr and Mrs Ho as purchasers. Special Condition 12 in the final contract replicated the version proffered by Mr Berger in his email of 13 August 2012. That same day, Mr and Mrs Ho paid the 5% deposit of $57,500 into the MBBF trust account (“Ho Deposit”).

52. At some time after 16 August 2012, Mr Berger caused the Ho Deposit to be disbursed from the trust account without notice to the purchasers or their solicitor as required by Special Condition 12.

53. On 31 August 2012, contracts in relation to the sale of the Domabyl Property were exchanged. On 3 October 2012, the purchaser’s solicitors, McCourts Solicitors, sent a letter to MBBF enclosing the transfer and requesting it be executed and returned urgently.

54. On 4 October 2012, Mrs Domabyl died. Upon the death of Mrs Domabyl, it is now common ground that the power of attorney executed in favour of Mr Berger was terminated. On 5 October 2012, Mr Berger learned of Mrs Domabyl’s death.

55. On 9 October 2012, Mr Berger (on MBBF letterhead) wrote to McCourts Solicitors concerning the sale of the Domabyl Property and enclosed the certificate of title and “the registered power of attorney under which Victor Berger had signed the Transfer”.

56. On 10 October 2012, McCourts Solicitors were told that “it was discovered that the Transfer sent by Kathryn Adler and signed by Victor Berger on 4 October 2013 was incorrect as it was not endorsed for signing under power of attorney”. That same day, Ms Kunhi noted in her handwriting “See Annexure A” next to Mr Berger’s signature and attached Annexure A which stated:

“ANNEXURE “A”

Certified correct for the purpose of the Real Property Act 1900 by the person named below who signed this instrument pursuant to the power of attorney specified.

Signature of attorney: [Mr Berger’s signature]

Attorney’s name: Victor Berger

Signing on behalf of: Hilda Domabyl

Power of Attorney: Book 4627 No. 327”

57. On 10 October 2012, Ms Donovan (on Mr Berger’s instructions) emailed Ms Kunhi, providing the following cheque directions in relation to the Domabyl Property:

“… please note the following cheque directions for settlement:-

1. Payable to MBBF for our fees & disb for acting on the sale $??

2. Payable to Victor Berger re #7062 $140,000 + GST     $154,000.00”

58. On 11 October 2012, Mr Berger (on MBBF letterhead) wrote to McCourts Solicitors with the following cheque directions in respect of the sale of the Domabyl Property:

“You are hereby authorised and directed to pay the balance of purchase monies as follows:

…

5. Bank Cheque in favour of Victor Berger for $154,000.00

6. Bank Cheque in favour of Milne Berry Berger & Freedman for $6,624.49

…

10. Bank Cheque in favour of Milne Berry Berger & Freedman Trust Account for $188,805.72”

59. That same day, Ms Kunhi (on behalf of MBBF) handed over the transfer (with Mr Berger’s signature crossed out and Annexure A attached) to McCourts Solicitors’ agent.

60. On 12 October 2012, settlement of the sale of the Domabyl Property occurred. As per Mr Berger’s directions of 11 October 2012, the settlement cheques included a cheque for $154,000 made out in Mr Berger’s name and paid into a bank account in Mr Berger’s name (the “First Payment”); a cheque for $6,624.49 made out to MBBF and paid into MBBF office account (the “Second Payment”); and a cheque for $188,805.72 made out to the MBBF trust account, being the remaining proceeds of the sale. These and four other payments were later alleged to constitute breaches of trust account obligations. As at 12 October 2012, probate in respect of Mrs Domabyl’s estate had not yet been granted.

61. On 22 October 2012, Mr Berger (on behalf of MBBF) issued a Standard Costs Agreement and Costs Disclosure to Mr Berger and Mr Green as executors in relation to probate for Mrs Domabyl’s estate.

62. On 6 December 2012, Mr Berger (on MBBF letterhead) wrote to himself as Mrs Domabyl’s attorney, concerning the settlement of the sale of the Domabyl Property. The letter stated:

“5. A cheque for $150,000 was drawn in respect of our costs and disbursements in relation to File No. 7062 acting for Mrs Domabyl under Power of Attorney and guardianship instructions and covered estimated costs and disbursements to date including payment of our several unpaid Tax Invoices.

6. We collected a cheque for $6,624.49 which was a pre-settlement estimate of our costs and disbursements to date in respect of the conveyancing sale transaction, our costs and disbursements now having been finalised totalling $8,165.41 (comprising costs of $6,208 plus GST of $620.80 and disbursements of $1,234.81 and GST of $101.80) leaving a shortfall of $1,540.92 which will be transferred from trust.”

63. On 7 December 2012, Mr Berger caused $8,265.41 to be transferred from the MBBF trust account (held on behalf of Mrs Domabyl’s estate) to the MBBF office account. The shortfall of $1,540.92 constitutes the “Third Payment”. Probate in respect of Mrs Domabyl’s estate had not yet been granted.

64. In January 2013, a Mr Sofiak, a trust account investigator for the Law Society, was allocated the task of conducting a routine trust investigation of MBBF’s trust account.

65. On 2 January 2013, Mrs Dougall died. It is now common ground that upon the death of Mrs Dougall, the power of attorney executed in favour of Mr Berger was terminated.

66. On 25 January 2013, Mr Berger caused $20,000 to be transferred from the MBBF trust account (held on behalf of Mrs Domabyl’s estate) to Mr Berger’s son-in-law, Mr Penn, to discharge a debt owed by Mr Berger (the “Fourth Payment”). The reason on the matter ledger stated: “Payment on behalf of Victor Berger from outstanding fees”. Probate in respect of Mrs Domabyl’s estate had not yet been granted.

67. On 18 February 2013, Mr Berger (on MBBF letterhead) sent a letter to Ms Frischer in which he provided his advice, enclosed two drafts of her will and notified her that a tax invoice would be sent to her “in the coming week”.

68. On 19 March 2013, Mr Berger sent a tax invoice for the total of $8,751.90 to Mrs Dougall’s niece and nephew for attendances undertaken by him on behalf of Mrs Dougall prior to her death.

69. On 16 April 2013, Mr Berger sent a letter to Mr Jan Domabyl, Mr Robert Domabyl and Mrs Domabyl’s daughter, Ms Fudge, in respect of the estimated costs for the administration of Mrs Domabyl's estate. The total estimate was $14,923.73.

70. On 22 April 2013, MBBF issued a tax invoice (Invoice #66078) to Mr Berger and Mr Green as executors of Mrs Domabyl’s estate in the amount of $14,341.55 relating to the application for the grant of probate (“Domabyl Probate Invoice”).

71. On 23 April 2013, Mr Berger caused $8,751.90 (held on behalf of Mrs Dougall’s estate) to be transferred from the MBBF trust account to the MBBF office account “on a/c of costs & disbursements” (the “Fifth Payment”). Probate had not yet been granted.

72. On 2 May 2013, Mr Berger (on MBBF letterhead) sent a letter to himself and Mr Green as executors, Mr Jan Domabyl, Mr Robert Domabyl and Ms Fudge, enclosing the Domabyl Probate Invoice.

73. On 6 May 2013, Mr Berger caused $14,341.55 (held on behalf of Mrs Domabyl’s estate) to be transferred from the MBBF trust account to the MBBF office account “Invoice #66078 Trust to Office Transfer” (the “Sixth Payment”). Probate in respect of Mrs Domabyl’s estate had not yet been granted.

74. On 11 May 2013, Mr Berger emailed a Mr Hawkins and a Ms Myers, two external examiners conducting an audit of the MBBF trust account, Mr Freedman and Ms Gopalan. The email contained a copy of an email dated 19 April 2013 from Mr Freedman to Mr Berger regarding the review conducted by the external examiners. Mr Freedman expressed his concerns about Mrs Domabyl’s file to which Mr Berger replied in uppercase characters:

“9) Domabyl; Mrs Domabyl died, I understand you and Michael Green are her executors. One of her assets was her interest in the retirement home upon which the firm acted on the sale. From the proceeds of sale you directed to yourself a payment of $20,000. You did not inform me and I assume you did not inform [Ms Gopalan] either, as partners of the firm that this was being done, and we would only have been made aware because of Jims audit.

I DID NOT INFORM EITHER [MR FREEDMAN] OR [MS GOPALAN]. THEY LEFT NO DOUBT THEY DID NOT WISH ANY PART OF THE PAYMENT OF FEES MRS DOMABYL INCURRED THROUGH MY SERVICES HAD INCURRED. INDEED THEY LIBERALLY SUGGESTED MY VALUES WERE ON A STANDARD BENEATH MINE.

I INFORMED:

- [MR FREEDMAN] AT A TIME HE FIRST RAISED AN ISSUE THAT WE SHOULD HAVE THE FEES ASSESSED. HE WAS DID NOT GAREE NOR DISAGREE;

- MUCH LATER AND ON SEVERAL OCCASIONS I WAS PRESSURED BY THEM BUT RESISTED. THEIR PRESSURE WAS ESSENTIALLY FOUNDED ON THEIR CLAIM TO HIGH MORAL GROUND;

- I REPEATEDLY TOLD THEM I HAD FULLY INFORMED THE CO-EXECUTOR MICHAEL GREEN AND THAT HE EXPRESSED THE VIEW THAT THERE WAS NO ISSUE;

- I WAS PERSUADED TO DEFER CLAIMING THE FEES, BUT NEVER SAID I WOULD NOT CLAIM THEM, WHEN [MR FREEDMAN] REFERRED TO HIS COMNCERN FOR MY FAMILY IF THE LEGAL SERVICES COMMISSIONER CHALLENGED OUR CLAIM. INDEED I EXPERIENCED A BARRAGE OF CRITICISM FOR ONLY DEFERRING SAME AND SIMILARLY AN EMAIL BY ME WHICH IN EFFECT INDICATED I ENQUIRED IF [MR FREEDMAN] WOULD NOT ACCEPT ANY PART OF THE MONEY;

- I SENT ITEMISED BILLS TO THE HUSBAND AND SON OF MRS DOMABYL FOR THE MAJOR PART OF THE CLAIM. THEY RAISED NO OBJECTIONS AND INDEED I WAS PRAISED FOR MY WORK. MY CO-EXECUTOR THEY HAVE BEEN INFORMED THAT I HAVE DRAWN FUNDS AGAINST SUCH BILLS.

10) There was no information on the records explaining why this money in trust should be paid to your son in law. Jim asked for instructions to be confirmed in writing explaining why and for what purpose and by whose authority this occurred. You wrote to Juliette on 11/4/13 stating that monies were .. “legal fees due to me and directed to be paid from Mr Penn towards satisfying a sum due by me to him.”

I BORROWED THE SUM FROM MY SON-IN-LAW AND HENCE REPAID HIM.

11) I cannot see any account issued with respect to legal fees being issued. It is my understanding of the trust account requirements that such an account needs to be issued if the monies were paid for legal fees, and in any event the legal services were provided by the firm and therefore ought to be paid to the firm.

I REFER TO THE ABOVE FACTS AS TO:

- BILLS HAVE BEEN ISSUED;

12) This payment occurred after her death; I understand that you and Michael Green are the executors, but the beneficiaries are her grandchildren.

SEE ABOVE.

13) You state that “the family agreed that our fees be paid for the work I did before Mrs Domabyl died”. It seems to me that it is not up to the family but rather those who would be deprived of that amount by you taking it, namely the beneficiaries.

THE BENEFICIARIES ARE JUST SHORT OF 18 YEARS OF AGE. WE WILL BE DICLOSING INCOME AND EXPEDITURE AS WE DO ALWAYS WHEN ACCOUNTING TO BENEFICIARIES.

14) Please confirm that the beneficiaries gave their informed consent. By informed I mean, did you explain to them that you did not issue a proper costs agreement aside from the initial one which Irecall was for $2000 to prepare a will? Did you explain that the estate had the right and entitlement to have any account for legal services assessed?

I HAVE NO DUTY TO DO MORE THAN WHAT APPEARS ON THE ITEMISED BILL HAVE YOU EVER DONE WHAT YOU ASK OF ME HERE TO ANY OF YOUR CLIENTS

And did you inform them that you had no conversation with Mrs Domabyl in which you told her that all your visits and all your phone calls etc were being charged for?

I DID HAVE SUCH CONVERSATIONS.

FURTHERMORE SHE WAS A VERY INTELIGENT AND SOPHISTICATE WOMAN OBVIOUSLY AN EXPERIENCE BUSINESS WOMAN. SHE OFTEN SPOKE PROUDLY ABOUT THAT.

I believe that only if you gave these explanations, or the beneficiaries received independent legal advice that any person, who was entitled to, could give informed consent to you taking the money from the Estate.

I DISAGREE, YOU CANNOT CLAIM TO BE IMPARTIAL ABOUT THIS MATTER

15) You misquote our discussionS when this matter came to a head about what should occur if monies were to be charged by the firm. I raised the same issues then as I raise now. Your failure to make proper or even close disclosure to Mrs Domabyl and to then try and charge her for your legal services would most likely be considered as misconduct. My and [Ms Gopalan’s] concern was that we might be held to have some responsibility for your misconduct and that was what we were raising with you. We stated and you eventually and quite reluctantly agreed that the charges would be written off and that you would discuss your assistance given to Mrs Domabyl with the family at the appropriate time. On no occasion did I agree, nor do I recall [Ms Gopalan] agreeing that you could or would charge for legal services. You were not entitled to do so and you should not do so

HOW DOES WHAT YOU SAY DIFFER WITH WHAT I HAVE SAID ABOVE, EXCEPT THAT YOU HAVE BEEN INCOMPLETE. WHAT I HAVE SAID IS LARGELY COORBORATED BY EMAILS BETWEEN US.

EACH OF YOU CANNOT CLAIM TO BE IMPARTIAL ABOUT THIS SUBJECT

16) You agreed that you would not charge legal fees, and I (and I assume [Ms Gopalan]) relied on that assurance and did not take the matter further, even though I told you that the Law Society had advised us that we may be liable if we did not stop this happening

I DISAGREE AS TO THE POSITION I TOOK OVER THE MATTER. AS TO THE LAW SOCIETY, TO MY BEST RECOLLECTION ONLY [MS GOPALAN] REFERRED TO SOME AUTHORITY AND ON READING IT IT WAS NOT TO THE POINT.”

75. Some aspects of Mr Berger’s contemporaneous state of mind arising from this email bear emphasis. Mr Berger was aware when acting as he did that the beneficiaries under Mrs Domabyl’s will were not yet 18 years old. Mr Berger was denying the existence of his unambiguous agreement made on 1 October 2011 with his partners that the WIP charged to Mrs Domabyl’s file would be written off and no further amounts charged to that file. At the same time he sought to recharacterise that correspondence, set out at length above, as demonstrating that what he had agreed was to defer claiming fees from Mrs Domabyl and that he had never said that he would not claim them.

76. In the same email, Mr Freedman expressed concerns about the SSD file to which Mr Berger replied in uppercase characters:

“In relation to file 14697:

5) I have looked at this file; you have transferred funds from the deposit monies held in trust commencing 12/12/.12; contracts were exchanged on the 6/12/12; special condition 12 provides for the release of the deposit to be used as a deposit by the vendor for another property; I see no correspondence recorded confirming an agreement by the purchaser for their funds to be used to pay for the vendors other expenses; you have used $42,624 from the trust account

6) When I queried this, your response was, - YES. THAT WAS GTHE PURPOSE OF RELEASE OF DEPOSIT AND THE TRADESMEN ARE FOR WORK AT THE SITE, TOTALLY FOR SATISFYING CONDITIONS OF ACHIEVING SUBDIVION; that response does not address my concerns in any way; that is a very worrying situation

ALL MONIES HAVE BEEN USED, TO THE KNOWLEDGE OF THE PURCHASERS, FOR THE PURPOSE OF ACHIEVING SUBDIVISON OF THE LAND OF WHICH THE SUBJECT PRIPERTIES FORM PART.

7) Please provide the usual particulars of the purchasers agreement to the use of their funds in this manner.

WHAT PARTICULARS? KINDLY ASK THE QUESTIONS AND NOT PRESUME I KNOW WWHAT YOUA RE TALKING ABOUT

8) There is no cost agreement for this matter

MY COMPANY IS THE VENDOR. USUAL RATE APPLY

In relation to file 14623;

7) I have looked at this file; the contract was exchanged on 1/8/12; the first withdrawal from the trust monies was made 3/8/12; there is no cost agreement.

MY COMPANY IS THE VENDOR. USUAL COSTS APPLY.

8) Special condition 12 provides for the release of the deposit as set out above.

9) I could find no correspondence between you and the purchaser agreeing for trust monies to be used for payment by the vendor of its expenCes

PLEAS E SEE MY REPLIES ABOVE

10) When I raised this with you your response;- YES. THAT WAS GTHE PURPOSE OF RELEASE OF DEPOSIT AND THE TRADESMEN ARE FOR THE WORK AT THE SITE, TOTALLY FOR SATISFYING CONDITIONS OF ACHIEVING SUBDIVION

PLEASE SEE MY REPLIES ABOVE

11) please provide the usual particulars of the purchasers agreement to use their funds in this manner

PLEASE SEE MY REPLIES ABOVE

12) I am aware that this contract was rescinded, and you have repaid most of the deposit, but you used approximately $40,000 of the trust funds without any apparent written consent or authority.

THESE FUNDS PAID TO THIS PURCHASER HAVE BEEN PROVIDED, TO THE BEST I KNOW AS I TYPE AND CAN CHECK LEDGERS, BY ME AND FUNDS RAISED FROM INTERESTED PARTIES FOR THAT PURPOSE.”

77. On 13 May 2013, Ms Gopalan emailed Mr Berger:

“The issues are very serious and I have received advice that I am equally responsible (being a salaried partner) for the serious allegations being currently raised re trust account transactions.

So that I can get proper advice and do the needful, I require the following:

Re Domabyl, I am unsure how [you can] state that you now billed and received the funds, when you clearly agreed in writing and gave [Mr Freedman] and I undertaking on 1/10/11 that; pursuant to our urgent meeting specifically called upon on re this file on 27/9/11 (after [Mr Freedman] and myself discovered the amount you have been wrongfully billing in this file without the instructions/consent/knowledge of the family). How could an invoice be issued and more so the payment be transferred to your son-in-law without the same being accounted for in the office account. No file notes or records maintained in the file until the auditors asked for the same on 10/4/13.

Re the other two matters 14697 and 14623, can you kindly provide us with a copy of the written consent provided by the purchasers giving you the authority to use these monies for your personal benefit?”

78. On 7 June 2013, Mr Sofiak interviewed Mr Berger and asked him questions about various transactions involving trust money. On 17 June 2013, Mr Sofiak issued his report to the Law Society, which stated that in his opinion there was a deficiency in the MBBF trust account as a result of the five payments described above made by Mr Berger of trust money on various dates.

79. On 21 June 2013, Mr Berger paid $205,258.86 into the MBBF trust account which he claimed “represented the entirety of the money [he] had received in payment of the Domabyl matters (approximately $174,000.00) plus some other fees”.

80. On 21 June 2013, the MBBF partnership was dissolved. On 22 June 2013, Mr Berger commenced as principal of Milne Berry Berger (“MBB”).

81. On 1 July 2013, the Law Society resolved to suspend Mr Berger’s practising certificate (the “Suspension Decision”). On 5 July 2013, Mr Berger appealed the Suspension Decision to the Supreme Court and applied for a stay. On 9 July 2013, the Supreme Court granted a stay of the Suspension Decision: A Solicitor v Council of the Law Society of New South Wales [2013] NSWSC 921.

82. On 11 July 2013, Mr Berger wrote to Ms Frischer informing her of the dissolution of MBBF and seeking authority to transfer her file to MBB. On or about 22 July 2013, Ms Frischer authorised the transfer of her file to MBB.

83. On 12 August 2013, Mr Berger swore an affidavit as the executor of Mrs Dougall’s will. On 14 August 2013, the Supreme Court dismissed Mr Berger’s appeal from the Suspension Decision: Berger v Council of the Law Society of NSW [2013] NSWSC 1080. Mr Berger applied for an extension of the stay.

84. On 15 August 2013, Beech-Jones J granted a further stay of the Suspension Decision subject to conditions, including a condition that, on or before 21 August 2013, Mr Berger notify his clients of the outcome of the principal proceedings, namely the court’s decision to dismiss the practitioner’s appeal against his suspension (“Condition 6”): Berger v Council of the Law Society of NSW (No 2) [2013] NSWSC 1131. That same day, Mr Berger sent letters to clients, but not to Ms Frischer.

85. On 20 August 2013, Ms Frischer emailed Mr Berger “about outstanding issues relating to the drafting of [her] will”.

86. On 21 August 2013, probate was granted in Mrs Dougall’s estate.

87. On 23 August 2013, Mr Berger emailed Ms Frischer regarding her instructions, stating:

“I cannot be sure about what time it will takeredraft. If indeed I have made any error, of course, there is no charge for correction.

Please tell me if I am to proceed as your note suggests. I estimate for the will 12 hours of my time an 1 hour for my secretary plus GST. Approximately $1200 less 20%. If I can do better I will certainly try. As to trusts for 1 draft say $1200 plus GST less 20% and a second one say $400 plus, less the same. One commonly finds the fees are considerably greater”

88. The next day, Ms Frischer emailed Mr Berger in reply:

“I paid the tax invoice but have already indicated fto you in the past my disappointment and recall your assurance that if there were mistakes this would be reflected in a reduction of fees

I would not have thought that I should pay a further fee beyond the $4,217 paid in late June to at least put in place a will even if no trust had been created as yet”

89. On 28 August 2013, this Court granted a further stay of the Suspension Decision: Berger v Council of the Law Society of New South Wales [2013] NSWCA 278.

90. On 25 September 2013, Mr Berger made an application for an assessment of his costs as set out in the Revised Fee Schedule.

91. On 3 October 2013, Mr Berger made an application for an assessment of his costs in relation to the Domabyl Probate Invoice.

92. On 8 October 2013, this Court dismissed Mr Berger’s application for leave to appeal from the Supreme Court’s decision to dismiss his appeal from the Suspension Decision: Berger v Council of the Law Society of New South Wales [2013] NSWCA 336.

93. On 8 October 2013, the stay of the Suspension Decision granted by this Court on 28 August 2013 lapsed. Since that date, Mr Berger has not held a practising certificate.

94. On 14 November 2013, the Law Society wrote to Mr Berger regarding a number of matters arising from Mr Sofiak’s report.

95. On 20 November 2013, Mr Berger emailed Mr Paffas seeking to make arrangements with Mr and Mrs Ho for the registration of the plan of subdivision of the Storey Street development. In that email, Mr Berger stated regarding the Ho deposit: “I have checked 5% deposit. Was released.” On 25 November 2013, Mr Paffas emailed Mr Berger in reply, stating: “I am also instructed that [Mr and Mrs Ho] would require a variation of the contract as follows: … 2. The vendor is to pay them interest on their released deposit at the rate of 11% per annum from the date of the contract”. On 26 November 2013, Mr Berger emailed Mr Paffas in reply as follows: “not agreed. There has been great capital growth. Interest defeats the purpose of us reaching for capital. It [is] just not possible”.

96. On 26 November 2013, the Law Society wrote to Mr Berger regarding the existing issues arising from their letter of 14 November 2013 and an additional complaint regarding Mr Berger’s breach of the undertaking he gave to the Supreme Court to undertake a course in Trust Accounting and Ethics.

97. On or about 13 December 2013, SSD was placed into receivership.

98. On 23 January 2014, probate was granted in Mrs Domabyl’s estate.

99. On 27 March 2014, a certificate of determination was issued in relation to the assessment of the Domabyl Probate Invoice, allowing total costs of $14,102.30.

100. On 30 April 2014, Rosenblum & Co, solicitors for Mr and Mrs Ho, wrote to MBB in relation to the Ho deposit:

“Contracts in the above matter were exchanged on 16 August 2012. Please advise whether the deposit was released to the Vendor on 20 August 2012.

Please provide details of why Settlement has not taken place and when settlement can be expected to take place as our client is eager to proceed with this matter.”

101. That same day, Rosenblum & Co (on behalf of Mr and Mrs Ho) wrote to Ray White Maroubra:

“Contracts in the above matter were exchanged on 16 August 2012. Please advise whether the deposit was released to the Vendor on 20 August 2012. If so, was the Agent’s commission paid out of the deposit?

Please provide details of when settlement can be expected to take place (if known) as our client is eager to proceed with this matter.”

102. That same day, Ray White Maroubra responded:

“The 5% deposit was paid directly to the vendors solicitor.

Any further information regarding the settlement of this matter should be referred to the vendors solicitor.”

103. On or about 8 May 2014, the receivers for SSD ceased to act.

104. On 16 May 2014, Mr Berger emailed Mr Rosenblum of Rosenblum & Co, stating “Please see attached ledger as record of disbursement of 5% deposit released to the Vendor”. The ledger enclosed was in the matter of “Sale of 4 Storey Street” for a client “Mr K Hancock, Storey Street Development Pty Limited” and recorded an amount of $57,500 from “Mr K Hancock” on 16 August 2012 for “Deposit on sale”. That same day, Mr Rosenblum emailed Mr Berger in reply, requesting a “copy of written consent to the release of the 5% deposit”. On 18 May 2014, Mr Rosenblum emailed Mr Berger: “I have just realised the ledger you sent us was for Mr K Hancock. Please provide the trust ledger for our clients, Mr & Mrs Ho.” On 19 May 2014, Mr Berger emailed Mr Rosenblum in reply: “I feel dopey. I am certain I sent this attached before. Will have a look later to whom it was sent.”

105. On 12 June 2014, a certificate of determination of costs was issued in relation to the assessment of the Revised Fee Schedule. As has earlier been noted, the beneficiaries under Mrs Domabyl’s were minors. By the time of the assessment they were represented by separate solicitors who were given notice by Mr Berger of the application for assessment. The beneficiaries apparently chose not to object to the account or otherwise to participate in the assessment.

106. The total amount of costs and disbursements determined to be fair and reasonable was $176,800.74. Relevantly, the reasons for the determination stated:

“The application for assessment of costs is to be determined in accordance with the requirements of the 1984 legislation. Pursuant to section 367 of the Act I am only empowered to determine the reasonableness of the costs that are expressly disputed in the objections. Costs which are not disputed must be allowed (O’Connor Fitti [2000] NSWSC 540).” (Emphasis added.)

107. On 4 July 2014, Mr Berger sent a letter to Rosenblum & Co enclosing a notice of rescission of the contract between SSD and Mr and Mrs Ho executed on 16 August 2012. The notice stated:

“4. The Contract was conditional upon the happening of an event, namely registration of the Plan.

5. Storey Street has done whatever is reasonably necessary to obtain registration of the Plan of Subdivision.

6. Storey Street has been unable to obtain registration of the Plan.

7. Storey Street and you are unable to lawfully complete the Contract without registration of the Plan.

…

TAKE NOTICE THAT

(a) … Storey Street hereby rescinds the Contract;

…

(c) Storey Street and you are hereby immediately discharged from further performance of the Contract.”

108. On 8 July 2014, Rosenblum & Co (on behalf of Mr and Mrs Ho) wrote to Mr Berger not accepting rescission or, alternatively, claiming return of the Ho deposit. The letter stated:

“Our clients do not accept that there has been a valid rescission of the Contract. In particular, paragraph 5 of the Notice is incorrect, Storey Street has not done whatever is reasonably necessary to obtain registration of the Plan. Paragraph (c) is rejected.

We also note that you are the Sole Director and Shareholder of the Vendor Company.

Our clients will give consideration to a mutual rescission of the Contract upon receipt by our clients of a refund of the deposit of $57,500.00. This offer is without prejudice to any of our clients’ other rights.

In the event that the Contract is rescinded, and our clients do not accept that this has yet validly occurred, our clients are entitled to a refund of the deposit pursuant to clause 19.

We note no mention or offer has been made in respect of the return of the deposit of $57,500.00 which was released upon Exchange of Contracts to the Vendor Company of which you are the Sole Director and Shareholder.”

109. On 25 August 2014, the Law Society sent a letter to Mr Berger regarding a complaint made by Mr Rosenblum on behalf of Mr and Mrs Ho in relation to the release of the Ho Deposit.

110. On 31 October 2014 (although the letter is dated 25 September 2014), Mr Berger responded to the Law Society’s letter with the following submissions:

“As to the consent of the release of the deposit to the vendor I refer to the following:

A. Clause 12 of the contract for sale was not to apply;

…

As to providing the solicitor for the purchaser particulars of disbursement of the deposit trust ledger was provided to the solicitor on or about 19 May 2014 and I do not believe any further communication was received from such solicitor.

In this instance, the possibility that you may find that having considered the file there is no substance in the complaint namely:

- No misappropriation of trust monies;

- No breach of Section 264 of the Legal Profession Act 2004;

Having accounted to the complainants with their solicitor, Rupert Rosenblum, on the providing of the trust ledgers;

- As to accounting for monies received from the complainants I suggested that the occasion had not yet arrived and if there had been completion of the sale such accounting would not be required and properly sought from Mr Rosenblum in the circumstances where it appeared it was likely that there would not be a sale of the property to his clients and;

- As to conduct we conducted the matter in accordance with the terms agreed with the solicitor for the purchasers.”

111. On 18 December 2014, the Law Society wrote to Mr Berger:

“I note from your letter of 31 October 2014 that you have submitted that you provided Mr Rosenblum with requested “particulars of disbursements of the deposit trust ledger” of the monies of Mr & Mrs Ho on or about 19 May 2014. However I understand from the documents which Mr Rosenblum included with his complaint, copies of which were forwarded to you, that he sent you an email on 18 June 2014 stating that the trust account statement which you had sent you appeared to relate to monies of a Mr K Hancock and asking you to provide the statement for Mr & Mrs Ho …

Please provide me with a copy of the “particulars of disbursement of the deposit trust ledger” of the monies of Mr & Mrs Ho”

112. On 24 December 2014, Mr Berger emailed the Law Society in reply:

“I am not sure if I understand your point other than why does the name of K. Hancock appear on the ledger.

Quite correct, his name should not be there. It Is the Trust Ledger of Storey Development Pty. Ltd the Vendor. As a point in history he was initially the intended buyer of the subject property. Ultimately he was not and his name ought not to have been on the ledger.

Of course my focus was to account for the monies received and it was deposited to the correct file and that accorded with the agreement and allpayments fron that money was spent on the project.

I trust the above answers your question.

I regret I did not respond further to the email of Mr. Rosenblum. There was communication within the office about his email however, it seems, my suspension too my focus off the point and in any event I recall my reaction thinking I had not sent the ledger and I found I had.”

113. On 8 February 2015, the Law Society wrote to Mr Rosenblum requesting further information “regarding the trust statement produced by Mr Berger and which, he states, refers to your clients’ money despite being headed ‘K Hancock’”.

114. On 18 February 2015, Rosenblum & Co wrote to the Law Society providing further information:

“We do not believe the trust account ledger produced by Mr Berger is in relation to our client as K Hancock also had an exchanged Contract with Storey Street and was the project-manager.”

Tribunal proceedings

115. On 8 October 2015 and 14 March 2016, the Law Society filed two applications for disciplinary findings and orders in the Tribunal (referred to in these reasons as the Complaint). The first application contained 11 grounds and the second application contained one further ground.

116. The Law Society submitted in the Complaint that Mr Berger was guilty of professional misconduct on the following 12 grounds, namely that Mr Berger:

1. misappropriated funds;

2. caused a deficiency in a trust account;

3. breached s 254 of the Legal Profession Act 2004;

4. breached s 255 of the Legal Profession Act 2004;

5. breached s 259 of the Legal Profession Act 2004;

6. purported to act under a power of attorney after the donor of the power had died;

7. purported to act as an executor under a will after the death of the testator but before any grant of probate;

8. failed to comply with an order of the Court;

9. failed to disclose costs;

10. breached an undertaking proffered to the Legal Services Commissioner;

11. engaged in unethical conduct in applying received monies in breach of the terms of the agreement under which they were received; and

12. engaged in overcharging.

117. As was described at the outset, the Law Society provided a narrative of 140 separate particulars of the Complaint which were referred to in an overlapping way in relation to each of the grounds. For example, the allegation of misappropriation particularised paragraphs 31-38, 41-43, 47, 64-66 and 73 of the narrative of particulars. The allegation that Mr Berger caused a deficiency in a trust account particularised paragraphs 31-38, 41-43, 46, 64-66, 72, 80-82, 85, 87-89 and 92.

Effect of these findings on the grounds of the Complaint

362. Given the confusing way in which all parties presented the issues to be determined I will summarise, first, the effect of my findings on the grounds in the Complaint and, then, the effect of my findings on the grounds of appeal.

363. It follows from the consideration of the thematic issues advanced by Mr Berger orally that the Tribunal’s findings on:

1. issue 1 – ground 1 and related portions of grounds 2, 3 and 7 of the Complaint limited to the First Payment of $154,000 should be upheld in part and the finding made at [269] by the Tribunal must be set aside. It is clear, however, that Mr Berger’s conduct in making the First Payment to himself was dishonest;

2. issue 3 – ground 1 and related portions of grounds 2, 4, 5 and 7 of the Complaint limited to the Fourth Payment of $20,000 should be upheld in part and the finding at [294]-[296] that it was dishonest and fraudulent conduct must be set aside. It is clear, however, that Mr Berger’s conduct in making the Fourth Payment was dishonest;

3. issue 4 – grounds 6 and 7 of the Complaint limited to the Third Payment of $1,540.92 should be upheld in part and the finding made at [281] by the Tribunal must be set aside;

4. issue 5 – grounds 2, 4 and 7 of the Complaint limited to the Sixth Payment of $14,000 should be upheld in part and the finding made at [317] by the Tribunal must be set aside;

5. issue 6 – ground 6 of the Complaint limited to execution of the transfer for sale of Mrs Domabyl’s property should be upheld in part and the finding made at [244]-[245] by the Tribunal must be set aside;

6. issue 7 – ground 7 of the Complaint limited to proceeding with the settlement of Mrs Domabyl’s Property without authority as executor should be upheld in part and the finding made at [244]-[245] by the Tribunal must be set aside;

7. issue 10 – ground 11 of the Complaint in relation to applying received monies in breach of the terms of the agreement under which they were received in the Ho matter should be upheld in part and the findings made at [220] by the Tribunal must be set aside; and

8. issue 12 – grounds 2, 4, 6, 7, 9 and 10 of the Complaint limited to causing a deficiency in a trust account in relation to the Fifth Payment of $8,751.90, breach of s 255 of the Legal Profession Act 2004, purporting to act under a power of attorney without authority, purporting to act as an executor without authority, failure to disclose costs, and breach of an undertaking in the Dougall matter should be upheld in part and the finding made at [306] and [308] by the Tribunal must be set aside.

364. The Tribunal’s treatment of the following aspects of the Complaint should be upheld:

1. issue 8 – grounds 9 and 10 of the Complaint limited to failure to disclose costs and breach of an undertaking in the Domabyl matter, not including failure to disclose costs in the Dougall matter;

2. issue 9 – ground 12 of the Complaint in relation to overcharging in the Domabyl matter; and

3. issue 11 – ground 8 of the Complaint in relation to failure to comply with a court order in the Frischer matter.

Effect of these findings on grounds of appeal

365. It follows that the conclusions I have reached about each of the grounds of appeal are:

1. appeal ground 1 – the finding at [220] that Mr Berger’s conduct was dishonest and fraudulent must be set aside. On all of the evidence, however, Mr Berger was guilty of professional misconduct in relation to applying received monies in breach of the terms of the agreement under which they were received in the Ho matter;

2. appeal ground 2 – the Tribunal did not err in finding at [171] that Mr Berger was guilty of professional misconduct in relation to his failure to disclose costs in the Domabyl matter;

3. appeal ground 3 – the Tribunal did not err in finding at [199] that Mr Berger was guilty of unsatisfactory professional conduct in relation to his failure to comply with a court order in the Frischer matter;

4. appeal ground 4 –

1. First Payment – the Tribunal did not err in finding at [270] that misappropriation in relation to the First Payment of $154,000 was “seriously dishonest and fraudulent conduct”. However, the finding at [269] that “[Mr Berger] knew what he was doing was unlawful and dishonest” must be set aside;

2. Third Payment – the Tribunal did not err in finding at [282] that Mr Berger was guilty of unsatisfactory professional misconduct in purporting to act as executor without authority and causing a transfer of money from a trust account in relation to the Third Payment of $1,540.92. However, the finding at [281] that “[o]n the balance of probabilities the practitioner knew his conduct was prohibited by law and dishonest” must be set aside;

3. Fourth Payment – the Tribunal did not err in finding at [296] that Mr Berger was guilty of unsatisfactory professional misconduct for breaching s 255 and s 259 of the Legal Profession Act 2004, causing a deficiency in a trust account, purporting to act as executor without authority and misappropriation in relation to the Fourth Payment of $20,000. The Tribunal did not err in finding at [296] that misappropriation in relation to the Fourth Payment of $20,000 was “dishonest and fraudulent conduct”. However, the finding at [294] that “[o]n the balance of probabilities the practitioner knew when he made the payment that … his conduct making the payment was illegal and dishonest” must be set aside;

4. Fifth Payment – the Tribunal did not err in finding at [307]-[308] that Mr Berger was guilty of unsatisfactory professional misconduct in breaching s 255 of the Legal Profession Act 2004, purporting to act as executor without authority, causing a deficiency in a trust account in relation to the Fifth Payment of $8,751.90. However, the finding at [306] that “on the balance of probabilities that the practitioner knew that … [h]is conduct was unlawful and dishonest” and at [308] that this conduct was dishonest must be set aside;

5. Sixth Payment – the Tribunal did not err in finding at [318] that Mr Berger was guilty of unsatisfactory professional misconduct in breaching s 255 of the Legal Profession Act 2004, purporting to act as executor without authority and causing a deficiency in a trust account in relation to the Sixth Payment of $14,341.55. However, the finding at [317] that “[o]n the balance of probabilities the practitioner knew at the time of the payment … [t]he payment would be illegal and dishonest” must be set aside;

5. appeal ground 5 – the Tribunal did not err in finding at [361] that Mr Berger was guilty of professional misconduct for gross overcharging in the Domabyl matter;

6. appeal ground 6 – given that this Court is itself to determine the appropriate order it is unnecessary to determine whether the Tribunal erred;

1. in finding and giving weight to its finding at [20] and [39] of the Penalty Judgment that there was a list of more than 70 complaints against Mr Berger;

2. at [21]-[26] of the Penalty Judgment in not affording any or proper weight to the evidence of the character witnesses relied on by Mr Berger;

3. in failing to address the question of Mr Berger’s fitness at the time of the order; and

7. appeal ground 7 – the Tribunal did not err in finding at [44] that Mr Berger presented as an unreliable witness and at [52] that Mr Berger was often evasive, avoided questions and gave unresponsive answers.

Conclusion – The appropriate order

366. Error, in part, in the decision of the Tribunal has been established by Mr Berger. I accept the joint submission of the parties that this Court should itself consider the appropriate order based on the findings it has independently made following a rehearing under s 75A of the Supreme Court Act.

367. The critical question is whether the proved conduct warrants an order that Mr Berger be struck off the roll. There was no controversy about the legal test to be applied in making that determination. It must be demonstrated that Mr Berger is probably permanently unfit to practise law: Ex parte Lenehan (1948) 77 CLR 403; [1948] HCA 45.

368. The findings I have made at [237]-[361] above disclose that Mr Berger has engaged in professional misconduct:

1. in engaging in unsatisfactory professional conduct involving a substantial or consistent failure to reach or maintain a reasonable standard of competence and diligence: Legal Profession Act 2004, s 497(1)(a); and

2. in engaging in conduct which demonstrates he is not a fit and proper person to engage in legal practice: Legal Profession Act 2004, s 497(1)(b).

369. The most significant of the findings are those of misappropriation and dishonesty. Mr Berger’s defalcations in relation to Mrs Domabyl’s estate were intentional. He intended to use clients’ entrusted monies without authority to further his own ends. In New South Wales Bar Association v Cummins (2001) 52 NSWLR 279; [2001] NSWCA 284, Spigelman CJ stated:

“[19] Honesty and integrity are important in many spheres of conduct. However, in some spheres significant public interests are involved in the conduct of particular persons and the state regulates and restricts those who are entitled to engage in those activities and acquire the privileges associated with a particular status. The legal profession has long required the highest standards of integrity.

[20] There are four interrelated interests involved. Clients must feel secure in confiding their secrets and entrusting their most personal affairs to lawyers. Fellow practitioners must be able to depend implicitly on the word and the behaviour of their colleagues. The judiciary must have confidence in those who appear before the courts. The public must have confidence in the legal profession by reason of the central role the profession plays in the administration of justice. Many aspects of the administration of justice depend on the trust by the judiciary and/or the public in the performance of professional obligations by professional people.”

370. The Court was taken by both parties to many authorities which had considered “misappropriation”. It is unnecessary to address those authorities separately. The relevant principles are clear and were explained sufficiently in Dupal v Law Society of New South Wales [1990] NSWCA 56. The principles in Dupal were explained by Leeming JA in Kumar as follows:

“[114] Moreover, the severity of the orders made wholly accords with authority. Mr Kumar’s circumstances were not dissimilar from those in Dupal v The Law Society of New South Wales [1990] NSWCA 56. In that case, Kirby P said:

“In an appeal such as the present, the Court disposes of the case before it by reference to criteria of general application. These should be clear and simple. They should be such as to leave no doubt in the mind of a practitioner in financial difficulties, exposed to the temptation of using without clear authority the funds of another, the consequences that will flow for the right to practise when such misuse of funds is discovered.”

[115] Handley JA, with whom Priestley JA agreed, said:

“This Court would be departing from a long course of authority if it were to allow the appeal and substitute a period of suspension for the order of the Tribunal removing the appellant from the roll. Counsel were not able to refer us to any case where a solicitor found guilty of misappropriation or wilful contraventions of s 41(1) has not been struck off the roll. Any decision to the contrary would signal to the profession and the community that this Court was no longer insisting on solicitors maintaining the highest standards of personal honesty and integrity in their dealings with clients and the public and in the handling of monies entrusted to their charge. The maintenance of those standards and the public interest require, in my judgment, that this appeal be dismissed. It is well established that the jurisdiction being exercised in this case is not penal but disciplinary and that it must be exercised for the benefit of the public. Sympathy for the appellant 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 cannot be allowed to deflect this Court from doing its duty.”

Finally, there is nothing in the claimed double punishment for grounds 1 and 3. A man or woman who takes his or her client’s funds for his or her own benefit, and who demonstrates no remorse or understanding of the gravity of his or her misconduct, is prima facie not fit to remain on the Roll. The findings in relation to Mr Malik’s $12,000 by themselves warranted the orders made. The Tribunal correctly regarded them at [93] not as “in the nature of technical or procedural rules or practices” but as “the very basic obligations of honesty and trustworthiness discussed in the major cases” and “fundamental principles of honesty and fair dealing”.”

371. To the findings of dishonest misappropriation of client funds must be added the many other aspects of the Complaint here proven. Mr Berger’s proven overcharging is serious. It may properly be described as “gross overcharging”. As I have found, it amounts to professional misconduct.

372. Mr Berger’s breaches of undertakings to the Office of Legal Services Commissioner are also serious. Breach of an undertaking to a professional body or to the Legal Services Commissioner amounts to professional misconduct. The failure to comply with the condition imposed by Beech-Jones J is also serious. The order concerned Mr Berger directly. It is a serious matter for Mr Berger to have failed to comply with the condition of the stay granted by the court.

373. Mr Berger’s conduct also demonstrates a consistent failure on his part to maintain a reasonable standard of competence and diligence. The sheer number of breaches across a range of different categories of conduct must be taken into account. In particular, the saga of Mr Berger’s abject failure over many years (despite the urgings of his partners) to make any costs disclosures to Mrs Domabyl amounts to professional misconduct. Mr Berger’s failure to make any disclosure of costs to Mrs Domabyl was, in the circumstances, conduct falling far short of that expected of a legal practitioner. Mr Berger’s unethical conduct in relation to the deposit paid by Mr and Mrs Ho is also serious.

374. Other than the occasions that Mr Berger has given undertakings to the Office of the Legal Services Commissioner recorded in the facts above at [13]-[14] and [36]-[37], I have not taken into account the record of complaints against Mr Berger recited before the Tribunal. There is simply not enough information to draw any reliable conclusions from that material.

375. I have taken the character evidence into account in Mr Berger’s favour. Those references, however, do not address, in any detail, the repeated and entrenched nature of the conduct disclosed by the evidence.

376. I have given consideration to whether Mr Berger is probably permanently unfit to practise as at today’s date. Regrettably, there is no evidence to suggest that Mr Berger understands the true gravity of his wrongful conduct. Whilst a number of findings made by the Tribunal have been set aside, I have rejected Mr Berger’s submission that his conduct was, in any way, unintentional or inadvertent. In critical respects it was dishonest. The Tribunal found that there was no evidence that the appellant had “learned and changed so much from his mistakes and his suspension that he is not likely to engage in further professional misconduct or unsatisfactory professional conduct if he is permitted to resume legal practice”. I agree. That remains the case today.

377. Mr Berger’s name should be removed from the roll for the purposes of protecting the public. That conclusion is reinforced given the unacceptable conduct involved, the necessity of maintaining proper standards, and the need to maintain public confidence in the profession.

378. Since this appeal is by way of rehearing and having regard to the provisions of s 75A of the Supreme Court Act, the evidence amply discloses, for the purposes of s 496 and s 497 of the Legal Profession Act 2004, that the appellant’s conduct in the practice of law fell short of the standard of competence and diligence expected, and justifies a finding that he is not a fit and proper person to engage in legal practice.

379. Although the Tribunal erred in the respects I have described in these reasons, an independent consideration of all the evidence leads to the same conclusion reached by the Tribunal. Mr Berger’s name must be removed from the roll.

Conclusion and orders

380. I propose the following orders:

1. Appeal dismissed.

2. Mr Berger to pay the costs of the Law Society of the appeal.

381. SIMPSON AJA: I agree with the orders proposed by Payne JA, and, subject to one relatively minor reservation, with his Honour’s reasons. My reservation concerns certain conclusions drawn by Payne JA that are favourable to the appellant. These are conclusions that, in some respects, findings that Mr Berger knew that his conduct was dishonest and/or illegal ought to be set aside, on the basis that (as I understand his Honour’s reasons) no clear allegation of dishonesty or illegality was made in the Law Society’s complaint. I take by way of example the payment of $20,000 made by the appellant out of Ms Domabyl’s estate to his son-in-law, Evan Penn, in order to discharge a personal debt to Mr Penn: [274]-[282].

382. The Law Society set out in some detail the way in which it put its case in relation to this payment. That included assertions that the relevant legislation required the funds to be held in a trust account to be operated exclusively for Ms Domabyl’s estate, that the appellant was in breach of that legislated requirement, that the payment caused a deficiency in the trust account and that the appellant had no authority (after Ms Domabyl’s death) to act under the Power of Attorney that she had given him, and no authority to act as executor pending a grant of probate.

383. In my opinion it is clearly implicit that the Law Society was asserting illegality and dishonesty to the knowledge of the appellant. The appellant could have been under no illusion that, by alleging that he unlawfully and dishonestly paid the sum of money to his son-in-law in discharge of a personal debt, the Law Society was alleging that he did so knowing of the illegality and dishonesty.

384. The appellant’s responses to the Law Society’s pleading are, on this question, immaterial. The Tribunal accepted the Law Society’s case as pleaded. In my opinion it was open to the Tribunal to reach the conclusion that the payment was illegal and dishonest and that the appellant was aware of those circumstances. I would not set aside the findings that the appellant knew that the payment was illegal and dishonest.

385. There are other instances of similar conclusions. Since the view I take could not enhance the appellant’s position, and merely strengthens the case for the findings of professional misconduct, and the findings that the appellant is permanently unfit to practice, it is not productive to explore other instances.

**********

Endnotes

316 Ongoing obligation to disclose

A law practice must, in writing, disclose to a client any substantial change to anything included in a disclosure already made under this Division as soon as is reasonably practicable after the law practice becomes aware of that change.”

317 Effect of failure to disclose

(1) Postponement of payment of legal costs until assessed

If a law practice does not disclose to a client or an associated third party payer anything required by this Division to be disclosed, the client or associated third party payer (as the case may be) need not pay the legal costs unless they have been assessed under Division 11.

Note. Under section 369, the costs of an assessment in these circumstances are generally payable by the law practice.

(2) Bar on recovering proceedings until legal costs assessed

A law practice that does not disclose to a client or an associated third party payer anything required by this Division to be disclosed may not maintain proceedings against the client or associated third party payer (as the case may be) for the recovery of legal costs unless the costs have been assessed under Division 11.

(3) Setting costs agreement aside

If a law practice does not disclose to a client or an associated third party payer anything required by this Division to be disclosed and the client or associated third party payer has entered into a costs agreement with the law practice, the client or associated third party payer may also apply under section 328 for the costs agreement to be set aside.

(4) Reduction of legal costs on assessment

If a law practice does not disclose to a client or an associated third party payer anything required by this Division to be disclosed, then, on an assessment of the relevant legal costs, the amount of the costs may be reduced by an amount considered by the costs assessor to be proportionate to the seriousness of the failure to disclose.”