Council of the Law Society of NSW v Ghobrial

[2013] NSWADT 300

Administrative Decisions Tribunal

New South Wales

Medium Neutral Citation:

Council of the Law Society of NSW v Ghobrial [2013] NSWADT 300

Hearing dates:

21 November 2013

Decision date:

21 November 2013

Jurisdiction:

Legal Services Division

Before:

Hon G Mullane - Judicial Member
M Riordan - Judicial Member
R Fitzgerald - Non-Judicial Member

Decision:

1. Michael Ghobrial is reprimanded.

2. Mr Ghobrial must pay a fine of $4,000.00 on or before 31 May 2014.

3. Mr Ghobrial must by 31 March 2014 successfully complete an on-line course in Trust and Office Accounting approved by the Manager of the Professional Standards Department of the Law Society of NSW.

4. Mr Ghobrial must pay the costs of the Law Society of $4,000.00 by monthly instalments of $1,000.00 with the first payment on or before 31 January 2014 and the fourth payment on or before 30 April 2014.

Catchwords:

Solicitor - Trust funds - failure to bank Trust funds as soon as practicable - paying Vendor's costs from Purchaser's deposit without Purchaser's authority - Trust accounts in debit - failure to keep accurate records in respect of Trust moneys - receipts, cash books, cash payments, ledger account, and failure to prepare bank reconciliation for Trust account and Trust trial balance within 15 days of end of each month.

Legislation Cited:

Legal Profession Act 2004;
Legal Profession Regulation 2005

Cases Cited:

The Council of the Law Society of NSW -v- Lundy [2013] NSW Administrative Decisions Tribunal 105

Category:

Principal judgment

Parties:

Council of the Law Society of NSW (Applicant)
Michael Ghobrial (Respondent)

Representation:

C Groenewegen (Applicant )
A Miller (Respondent )

File Number(s):

132014

reasons for decision

INTRODUCTION

1. These were disciplinary proceedings taken by the Law Society of NSW against the Respondent solicitor in relation to failure to comply with provisions of the Act and Regulations in relation to Trust money.

THE GROUNDS AND THE PARTICULARS

1. The Grounds of the Application and the Particulars which were admitted by Mr Ghobrial are as follows:

GROUNDS FOR APPLICATION

Michael Ghobrial [the Solicitor'], while practising as a solicitor, was guilty of professional misconduct on the bases of:

1. Breach of s 254 of the Act

See particulars paras 13 to 15 incl

2. Breach of s 255 of the Act

See particulars paras 17 to 21 incl

3. Causing a deficiency in the trust account

See particulars paras 5(b)(ii) to 6 incl

4. Breach of s 264 of the Act,

See particulars paras 2 to 10 incl

5. Breach of cI 68, 69, 70 and 72 of the Legal Profession Regulation 2005 ['the Regulations']. See particulars paras 2 to 12 incl

PARTICULARS

Definitions

The Solicitor is the Respondent, Michael Ghobrial, who:

was born on 14 March 1975 and is aged approximately 38 years

was admitted as a solicitor of the Supreme Court of NSW on 27 August 1999

held a Practising Certificate from 27 August 1999 to the present

at all material times was the principal of the law practice Ghobrial Legal, situated at suite 2E the Broadwalk Arcade Penrith 2750.

Relevant Bank Accounts

NAME	STYLE	BANK	BSB	A/C No
Trust Account	Ghobrial Legal Statutory Trust Account	NAB	082-760	790647414
NAB Office account	Ghoibrial Legal business Cheque Account Office Account	NAB	082-760	599627650
CBA Office Account	Michael Ghobrial t/as Ghobrial Legal	CBA	062-589	10743127

1. On 11 March 2010, Mr Garry Napper, Trust Account Investigator for the Law Society of NSW, advised the Solicitor by leaving a telephone message that Ghobrial Legal was to undergo a routine trust account investigation.

Records of the law practice

2. On 23 June 2010 the Solicitor produced trust account records to Mr Napper. These records comprised 'Old' and 'New' trust records.

3. The 'Old' trust records relevantly covered the period to the end of May 2009.

4. The 'New' trust records relevantly covered the period from 1 Dec 2008 to June 2010.

5. The records showed:

a. Bank reconciliations for the trust account for the months ended 31 December 2008 to 30 June 2010.

i. The bank reconciliations for the months ended 31 December 2008 to 31 March 2010 were prepared on 21 June 2010.

ii. The bank reconciliations for the months ended 30 April 2010 to 30 June 2010 do not bear a date of preparation.

b. Trial balances for the months and dates ended 31 December 2008 to 22 June 2010.

i. The trial balances fail to property disclose the matter Allover Cranes as overdrawn between 2 December 2008 and 1 April 2010.

ii. The trust ledger for matter Allover Cranes bore entries as italicised below. Those in bold show the true position:

Date	Trans Type	Description	Debit	Credit	Balance	Actual Balace
1 Dec 08	Chq [rcpt]	Allover Cranes Funds Rec'd	37,500.00	37,500.00	Nil
2 Dec 08	EFT	Legal Fees	990.00	36,510.00	990.00 Dr
30 Dec 08	EFT	Legal Fees	7,000.00	29,510.00	7,990.00 Dr
5 Jun 09	EFT	Legal Fees	1,320.00	28,190.00	9310.00 Dr
24 Jul 09	EFt	Legal Fees	9,900.00	18,290.00	19210.00 Dr
3 Aug 09	EFT	Legal Fees	1,100.00	17,190.00	20,310.00 Dr
11 Nov 09	Rcpt	Settlement monies	170,984.46	188,174.46	150,674.46 Dr
19 Nov 09	EFT	Legal Fees	17,195.52	170,978.94	133,478.94 Dr
1 Dec 09	Q630	Settlement monies	170,984.46	5.52 Dr
1 Apr 10	Rcpt	Chq from client not recorded	37,500.00	5.52 Dr	5.52 Dr

6. The Solicitor caused a deficit of various amounts in his trust account between 2 December 2008 and 1 April 2010.

7. The Solicitor failed to keep the trust records in a way that at all times discloses the true position in relation to trust money received for and on behalf of any person.

8. The 'Old' records were generally written up until 31 May 2009 except:

a. Some entries had been written direct onto ledger cards without a corresponding entry in the cash book as follows:

i. The cash receipt book was written up to 29 June 2009; and

ii. There are some but not all transactions on ledger cards up to October 2009.

b. They do not document any ledger account or balance for the matter Allover Cranes.

c. There is no entry for the receipt of $37,500.00 nom Allover Cranes on 1 December 2008 or at all.

d. The 'Old' cash payments book shows the transfers from the trust account on 2 December 2008 of $990.00 and 30 December 2008 of $7,000.00 as pertaining to the matter of Thornhill Sale.

e. There is no basis for these withdrawals in the Thornhill matter and in fact they were later attributed to matter Allover Cranes.

9. The 'Old' records produced to Mr Napper on 23 June 2010 were not book records but loose records produced on a computer at a later time.

10. The 'New' records were generally written up from 31 December 2008 to June 2010 and show:

a. Accounting for the matter Allover Cranes;

b. Trial balances for the months ended December 2008 to March 2010 all show dates of preparation of 16 April 2010 and also 21 June 2010;

c. In the cash payments book transfers from the trust account on 2 December 2008 of $990.00 and 30 December 2008 of $7,000.00 as pertaining to the matter of Allover Cranes, not Thornhill Sale as shown in the 'Old' records.

d. There is no accounting for the matter Thornhill Sale.

11. The Solicitor failed to ensure that the cash receipts record, cash payments record and ledgers were written up within 5 working days of the receipt and payment of trust monies.

12. On 3 June 2011 when Mr Napper followed up his June 2010 routine investigation the Solicitor had still not corrected the trust account debit balance of the matter Allover Cranes.

Matter of Allover Cranes Pty Limited

13. On or after 1 December 2008 Mr Dena Brijeski, director of Allover Cranes Pty Limited t/as Den's Hire paid to the law practice the sum of $37,500.00 by way of Westpac cheque no 300201 dated 1 December 2008 for the purposes of covering expected legal fees.

14. The cheque was properly characterised as trust property.

15. The Solicitor failed to deposit the cheque into the trust account. The cheque ultimately became stale.

16. On or about 27 March 2010 the Solicitor informed Mr Brijeski that the cheque dated 1 December 2008 had not been banked. Mr Brijeski drew a replacement cheque being No. 300221 dated 31 March 2010. The replacement cheque was banked on 1 April

2010.

FTC Residential Pty Ltd Sale

17. By contract for Sale of land dated 15 June 2009 FTC Residential Pty Limited and Fava Development Pty Limited as vendors agreed to sell to Blue Chip Limited land at Kingswood for a purchase price of $10,250,000.00.

18. The Solicitor acted for the vendor in the matter.

19. The deposit for the purchase was $256,250.00. This amount was deposited into the trust account on 16 June 2009.

20. Prior to settlement on 9 December 2009, the Solicitor, without authority drew from the trust account a total of $8,858.00 in legal fees as follows:

DATE AMOUNT $

28 Jul2009 2,200.00

10 Aug 2009 880.00

28 Aug 2009 990.00

16 Nov 2009 4,788.00

21. Between 28 July 2009 and 16 November 2009 the Solicitor failed to hold trust money deposited in the general trust account exclusively for the persons on whose behalf it was received.

THE EVIDENCE

1. The evidence comprised:

(1)   The Affidavit of Anne-Marie Foord sworn 21 May 2013;

(2)   The Affidavit of the Respondent sworn 26 July 2013;

(3)   The Affidavit of John Ernest Mitchell sworn 26 July 2013;

(4)   The Application filed 2 August 2013;

(5)   The Reply of the Respondent filed 4 September 2013;

(6)   The Affidavit of Peter Ryan sworn 1 October 2013;

(7)   The Affidavit of the Respondent sworn 1 October 2013;

(8)   Admissions and concessions made by Counsel for the Law Society in submissions;

(9)   Factual material in submissions by the Respondent's solicitor that were not disputed by the Law Society.

RELEVANT LEGISLATIVE PROVISIONS

1. The relevant provisions of the Legal Profession Act 2004 in relation to the conduct complained of are as follows:

254 Certain trust money to be deposited in general trust account

(1) Subject to section 258A, as soon as practicable after receiving trust money, a law practice must deposit the money in a general trust account of the practice unless:

(a) the practice has a written direction by an appropriate person to deal with it otherwise than by depositing it in the account, or

(b) the money is controlled money, or

(c) the money is transit money, or

(d) the money is the subject of a power given to the practice or an associate of the practice to deal with the money for or on behalf of another person.

Maximum penalty: 100 penalty units.

(2) Subject to section 258A, a law practice that has received money that is the subject of a written direction mentioned in subsection (1) (a) must deal with the money in accordance with the direction:

(a) within the period (if any) specified in the direction, or

(b) subject to paragraph (a), as soon as practicable after it is received.

Maximum penalty: 100 penalty units.

(3) The law practice must keep a written direction mentioned in subsection (1) (a) for the period prescribed by the regulations.

Maximum penalty: 50 penalty units.

(5) A person is an "appropriate person" for the purposes of this section if the person is legally entitled to give the law practice directions in respect of dealings with the trust money.

255 Holding, disbursing and accounting for trust money

(1) A law practice must:

(a) hold trust money deposited in a general trust account of the practice exclusively for the person on whose behalf it is received, and

(b) disburse the trust money only in accordance with a direction given by the person.

Maximum penalty: 50 penalty units.

(2) Subsection (1) applies subject to an order of a court of competent jurisdiction or as authorised by law.

(3) The law practice must account for the trust money as required by the regulations.

Maximum penalty: 50 penalty units.

262 Deficiency in trust account

(1) An Australian legal practitioner is guilty of an offence if he or she, without reasonable excuse, causes:

(a) a deficiency in any trust account or trust ledger account, or

(b) a failure to pay or deliver any trust money.

Maximum penalty: 200 penalty units.

(2) A reference in subsection (1) to an account includes a reference to an account of the practitioner or of the law practice of which the practitioner is an associate.

(3) In this section: "cause" includes be responsible for. "deficiency" in a trust account or trust ledger account includes the non-inclusion or exclusion of the whole or any part of an amount that is required to be included in the account.

264 Keeping trust records

(1) A law practice must keep in permanent form trust records in relation to trust money received by the practice.

Maximum penalty: 100 penalty units.

(2) The law practice must keep the trust records:

(a) in accordance with the regulations, and

(b) in a way that at all times discloses the true position in relation to trust money received for or on behalf of any person, and

(c) in a way that enables the trust records to be conveniently and properly investigated or externally examined, and

(d) for a period determined in accordance with the regulations.

Maximum penalty: 100 penalty units.

1. The relevant provisions of the Legal Profession Regulation 2005 in relation to the conduct complained of are as follows:

68 Trust account receipts cash book

(1) The following particulars must be recorded in a law practice's trust account receipts cash book in respect of each receipt of trust money:

(a) the date a receipt was made out for the money and, if different, the date of receipt of the money,

(b) the receipt number,

(c) the amount of money received,

(d) the form in which the money was received,

(e) the name of the person from whom the money was received,

(f) details clearly identifying the name of the client in respect of whom the money was received and the matter description and matter reference,

(g) particulars sufficient to identify the purpose for which the money was received,

(h) details clearly identifying the ledger account to be credited.

(2) The date and amount of each deposit in the general trust account must be recorded in the trust account receipts cash book.

(3) The particulars in respect of receipts must be recorded in the order in which the receipts are made out.

(4) The particulars in respect of a receipt must be recorded within 5 working days counting from and including the day the receipt was made out.

69 Trust account payments cash book

(1) The following particulars must be recorded in a law practice's trust account payments cash book in respect of each payment of trust money by cheque:

(a) the date and number of the cheque,

(b) the amount ordered to be paid by the cheque,

(c) the name of the person to whom the payment is to be made or, in the case of a cheque made payable to an ADI, the name or BSB number of the ADI and the name of the person receiving the benefit of the payment,

(d) details clearly identifying the name of the person on whose behalf the payment was made and the matter reference,

(e) details clearly identifying the ledger account to be debited,

(f) particulars sufficient to identify the purpose for which the payment was made.

(2) The following particulars must be recorded in a law practice's trust accounts payments cash book in respect of each payment of trust money by electronic funds transfer:

(a) the date and number of the transaction,

(b) the amount transferred,

(c) the name and number of the account to which the amount was transferred and the relevant BSB number,

(d) the name of the person to whom the payment was made or, in the case of a payment to an ADI, the name or BSB number of the ADI and the name of the person receiving the benefit of the payment,

(e) details clearly identifying the name of the person on whose behalf the payment was made and the matter reference,

(f) details clearly identifying the ledger account to be debited,

(g) particulars sufficient to identify the purpose for which the payment was made.

(3) The particulars in respect of payments must be recorded in the order in which the payments are made.

(4) The particulars in respect of a payment must be recorded within 5 working days counting from and including the day the payment was made.

70 Recording transactions in trust ledger accounts

(1) A law practice that maintains a general trust account must keep a trust account ledger containing separate trust ledger accounts in relation to each client of the practice in each matter for which trust money has been received by the practice.

(2) The following particulars must be recorded in the title of a trust ledger account:

(a) the name of the person for or on behalf of whom the trust money was paid,

(b) the person's address,

(c) particulars sufficient to identify the matter in relation to which the trust money was received.

(3) Details of any changes in the title of a trust ledger account must be recorded.

(4) The following particulars must be recorded in the trust ledger account in respect of each receipt of trust money for the matter:

(a) the date a receipt was made out for the money and, if different, the date of receipt of the money,

(b) the receipt number,

(c) the amount of money received,

(d) the name of the person from whom the money was received,

(e) particulars sufficient to identify the purpose for which the money was received.

(5) The following particulars must be recorded in the trust ledger account in respect of each payment of trust money by cheque:

(a) the date and number of the cheque,

(b) the amount ordered to be paid by the cheque,

(c) the name of the person to whom the payment is to be made or, in the case of a cheque made payable to an ADI, the name or BSB number of the ADI and the name of the person receiving the benefit of the payment,

(d) particulars sufficient to identify the purpose for which the payment was made.

(6) The following particulars must be recorded in the trust ledger account in respect of each payment of trust money by electronic funds transfer:

(a) the date and number of the transaction,

(b) the amount transferred,

(c) the name and number of the account to which the amount was transferred and the relevant BSB number,

(d) he name of the person to whom the payment was made or, in the case of a payment to an ADI, the name or BSB number of the ADI and the name of the person receiving the benefit of the payment,

(e) particulars sufficient to identify the purpose for which the payment was made.

(7) The following particulars must be recorded in the trust ledger account in respect of each transfer of trust money effected by a journal entry:

(a) the date of the transfer,

(b) the amount transferred,

(c) the journal reference number,

(d) the name of the other trust ledger account from which or to which the money was transferred,

(e) particulars sufficient to identify the purpose for which the payment was made.

(8) Transactions relating to trust money must be recorded in the trust ledger account in the order in which the transactions occur.

(9) The particulars in respect of a receipt, payment or transfer of trust money must be recorded within 5 working days counting from and including the day the receipt was made out, the payment was made or the transfer was effected, as the case requires.

(10) The trust ledger account balance is to be recorded in the trust ledger account after each receipt, payment or transfer of trust money.

72 Reconciliation of trust records

(1) A law practice that maintains one or more general trust accounts must reconcile the trust records relating to the only or each account.

(2) The trust records relating to a general trust account are to be reconciled as at the end of each named month by preparing:

(a) a statement:

(i) reconciling the general trust account balance as shown in ADI records with the balance of the practice's trust account cash books, and

(ii) showing the date the statement was prepared, and

(b) a statement:

(i) reconciling the balance of the trust ledger accounts with the balance of the practice's trust account cash books, and

(ii) containing a list of the practice's trust ledger accounts showing the name, identifying reference and balance of each and a short description of the matter to which each relates, and

(iii) showing the date the statement was prepared.

(3) The statements must be prepared within 15 working days after the end of the month concerned.

(4) The statements must be kept by the law practice.

OTHER RELEVANT FACTS

1. The Respondent was admitted as a solicitor on 27 August 1999. He worked in the next 6 years for 3 different law practices. In 2005 he spent a month in hospital and was then diagnosed with diverticular disease. The disease became progressively worse.

1. He commenced practising as a sole practitioner in March 2006. He employed a book-keeper but in 2007 she unexpectedly retired and he was forced to then personally continue the book-keeping in relation to the Trust and Office accounts. The manual system was hand-written receipt book, cash receipts journal, cash payments journal, and hand-written Trust account ledger card system. Usually, a receipt was issued upon receipt of a payment of trust money by a client. The receipt was in triplicate. One copy was given to the client, one was placed on the client's file, and the third remained in the receipt book. The funds were deposited to the firm's Trust Account the same day.

1. On 1 December 2008, Allover Cranes paid the law practice $37,500.00 by way of a cheque. No receipt was issued and the cheque was not entered into the Trust Account records. The cheque was in fact stapled to the inside of the file cover and not discovered until about March 2010. The cheque had been given to the Respondent on account of costs and disbursements. Between November 2008 and November 2009, the Respondent rendered seven bills to Allover Cranes for a total of $39,216.30 and was authorised by Allover Cranes to deduct the fees in those bills from the funds already paid to the Respondent on account of costs and disbursements. But there were no funds in the Trust Account from the client. Accordingly, when the law practice transferred the funds from trust to pay each of the seven bills, the funds did not come from the client's money but from funds held on behalf of other clients. Each of the transfers of costs made the Trust Account for the client further over-drawn.

1. When in early 2010 the Law Society Trust Account Investigator began contacting the Respondent to arrange a routine Trust Account inspection, the Respondent tried to sort out his Trust Account records. He had not been preparing Trust trial balances and bank reconciliations at the end of each month. His auditor who had certified his accounts for purposes of returns to the Law Society, had not observed the error referred to.

1. In addition, on 16 June 2009, the Respondent, on behalf of his Vendor client, received a deposit of $256,250.00 on the sale of a residential property. He deposited those funds in his Trust Account. Between July and November the solicitor rendered four bills to his Vendor client for a total of $8,858.00. He transferred Trust monies from the deposit to his Office Account in payment of those bills. But the deposit was held on behalf of both the Vendor and the Purchaser and the Respondent did not have, and did not seek, authority of the Purchaser to use the Trust money in that way. His evidence is that he failed to recognise he needed the authority of the Purchaser because of the Purchaser's interest in the money.

1. In March 2010, the Respondent was considering a proposed merger between his firm and another firm. The other firm arranged for a firm of Chartered Accountants to conduct an audit of his records. That firm alerted him to the deficiency in his Trust Account in respect of the cheque for $37,500.00 received from Allover Cranes. He found the cheque stapled to the inside sleeve of the client file and contacted the client. The client provided a replacement cheque and he banked it on 1 April 2010.

1. When the Trust Account Investigator visited the practice on 23 June 2010, the Respondent produced to him "old" and "new" Trust Account records.

1. The solicitor was quite ill in early 2011 and was diagnosed with Crohn's disease. He was hospitalised for about four weeks. On 11 June 2011 the Trust Account Investigator informed him of his breach of the legislation by drawing Trust funds for costs from the deposit monies held in Trust without authority of the Purchaser.

1. On 13 June 2011 the Trust Account Investigator wrote to the Respondent requesting that he: "forward trial balances and bank reconciliations for the months ended June 11, July 11 and August 11, within one month of each month end". He also required that:

• Bank reconciliations for all three months to show date of preparation;
• Trial balances and bank reconciliations for the months of June 11, July 11 and August 11, be forwarded within a month of the end of each month;
• Cash receipts to show from whom funds are received and the reason for receipt of funds;
• Cash payments to show to whom funds have been paid and the reason for payment.

1. The trial balances and bank reconciliations for the months of June 11, July 11 and August 11, were not forwarded until 30 September 2011. No preparation date was shown. Cash receipts did not show from whom the funds were received and the reason for receipt of funds, and cash payments did not show to who funds had been paid and the reason for payment.

1. Later in 2011 the Respondent engaged Peter Ryan of Corporation One Accounting, to undertake the end of month trust accounting, BAS and end of year tax returns.

1. Mr Ryan is assisting the Respondent in implementing an electronic trust accounting system (Excel based). The Respondent has engaged an external accountant to conduct his yearly trust account audits. When he swore his affidavit, the Respondent testified that he was implementing an electronic trust accounting system, which was to be replaced by LEAP Accounting in that same month. He said that he had already implemented a system of weekly file reviews with staff undertaking property transactions, personally certifying Title and settlement figures prior to settlement, and personally managing payment to the client post-settlement of a transaction.

1. Consistent with the Trust Account Investigator evidence, the Respondent testified that he has not found any other: "like irregularlity since increasing my attention to these matters".

1. Prior to his commencing as a sole practitioner on 20 March 2006, the Respondent was employed by a series of large legal practices and had very little experience in those practices in keeping Trust and Office Account records or the requirements.

1. His evidence is that the scale of his practice is not large. It has generated in recent times a fee income of $400,000.00 per annum from which he receives net about $65,000.00 to $75,000.00. His evidence is that in the last 3 to 4 years he has had 1 licensed conveyancer, 1 employed solicitor, and 2 administrative support staff.

UNSATISFACTORY PROFESSIONAL CONDUCT AND PROFESSIONAL MISCONDUCT

1. Sections 496, 497 and 498 of the Legal Profession Act 2004 provide:

496 Unsatisfactory professional conduct

For the purposes of this Act:

"unsatisfactory professional conduct" includes conduct of an Australian legal practitioner occurring in connection with the practice of law that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent Australian legal practitioner.

497 Professional misconduct

(1) For the purposes of this Act:

"professional misconduct" includes:

(a) unsatisfactory professional conduct of an Australian legal practitioner, where the conduct involves a substantial or consistent failure to reach or maintain a reasonable standard of competence and diligence, and

(b) conduct of an Australian legal practitioner whether occurring in connection with the practice of law or occurring otherwise than in connection with the practice of law that would, if established, justify a finding that the practitioner is not a fit and proper person to engage in legal practice.

(2) For finding that an Australian legal practitioner is not a fit and proper person to engage in legal practice as mentioned in subsection (1), regard may be had to the matters that would be considered under section 25 or 42 if the practitioner were an applicant for admission to the legal profession under this Act or for the grant or renewal of a local practising certificate and any other relevant matters.

498 Conduct capable of being unsatisfactory professional conduct or professional misconduct

(1) Without limiting section 496 or 497, the following conduct is capable of being unsatisfactory professional conduct or professional misconduct:

(a) conduct consisting of a contravention of this Act, the regulations or the legal profession rules,

(b) charging of excessive legal costs in connection with the practice of law,

(c) conduct in respect of which there is a conviction for:

(i) a serious offence, or

(ii) a tax offence, or

(iii) an offence involving dishonesty,

(d) conduct of an Australian legal practitioner as or in becoming an insolvent under administration,

(e) conduct of an Australian legal practitioner in becoming disqualified from managing or being involved in the management of any corporation under the Corporations Act 2001 of the Commonwealth,

(f) conduct consisting of a failure to comply with the requirements of a notice under this Act or the regulations (other than an information notice),

(g) conduct of an Australian legal practitioner in failing to comply with an order of the Disciplinary Tribunal made under this Act or an order of a corresponding disciplinary body made under a corresponding law (including but not limited to a failure to pay wholly or partly a fine imposed under this Act or a corresponding law),

(h) conduct of an Australian legal practitioner in failing to comply with a compensation order made under this Act or a corresponding law.

(2) Conduct of a person consisting of a contravention referred to in subsection (1) (a) is capable of being unsatisfactory professional conduct or professional misconduct whether or not the person is convicted of an offence in relation to the contravention.

1. The breaches, subject of the complaint are individually unsatisfactory professional conduct, but when taken together, constitute professional misconduct.

CONCLUSIONS

1. Each of the breaches complained of are breaches of basic requirements in the legislation designed to protect clients and other members of the public.

1. But it is clear that the Respondent had no intention that any such breaches would benefit him or would be to the damage of any other person. There was no personal gain to him.

1. The Law Society concedes that the Respondent has been in practice as a solicitor for 14 years and has had no other complaint against him. No client has suffered any loss. No client has made any complaint.

1. The Respondent has frequently expressed remorse and appears to be sincere about that. Although slow to start, he has acted to remedy the problems and change his conduct to ensure that he complies with the requirements of the legislation.

1. The submission of the Law Society is that there should be a reprimand and a fine "at the lowest end of the scale". The Law Society also seeks that there be an Order that the Respondent must by 31 March 2014, successfully complete an on-line course in Trust and Office Accounting approved by the Manager of the Professional Standards Department of the Law Society of NSW. The Respondent raised no opposition to this.

1. The Law Society also informed the Tribunal that there have been no problems detected in the random Trust Account inspections and external audits since September 2011.

1. The Tribunal concludes that the nature of the breaches of the Legislation, the extent of them, particularly the period over which they occurred, are such that the breaches taken together constitute professional misconduct.

1. The protection of the public and of the reputation of the profession require that the Respondent be reprimanded, that he be ordered to pay a fine of $4,000.00, and that he be ordered to attend a course in Trust and Office Accounting as proposed by the Law Society.

COSTS

1. The Law Society has estimated its costs in the proceedings at $4,000.00, which appears quite reasonable and is not contested by the Respondent.

1. Subsection 566(1) of the Act, requires the Tribunal to make an order, where it has found a legal practitioner has engaged in professional misconduct, that the practitioner pay the costs of the Law Society "unless the Tribunal is satisfied that exceptional circumstances exist".

1. There is no evidence suggesting that this is a situation where there are circumstances which would justify departing from the general rule.

1. The practitioner must pay the costs of the Law Society. The Tribunal accepts the estimate of $4,000.00 as a reasonable estimate and as proposed by the Respondent, it will be payable by four monthly instalments of $1,000.00 each, the first to be by 31 January 2014.

Decision last updated: 24 December 2014