In the Matter of Peter David Kerin No. Scgrg-97-1018 Judgment No. S6447
[1997] SASC 6447
•21 November 1997
IN THE MATTER OF PETER DAVID KERIN
Full Court: Matheson, Duggan and Nyland JJ
DUGGAN J
The Law Society of South Australia (the Society) has applied to this court for an order that the practitioner’s name be struck off the roll of legal practitioners. The Society’s application is based upon two separate complaints against the practitioner which were heard by the Legal Practitioner’s Disciplinary Tribunal (the tribunal). The hearings took place before two differently constituted tribunals. The practitioner was found guilty of unprofessional conduct in relation to each complaint.
The practitioner is 36 years of age. He is married with two children. He was admitted to practice in February 1984 after serving articles of clerkship in a firm in which his father was a senior partner. In 1987 he set up as a sole practitioner and has practised as such since that time.
The first complaint arises out of the importation into Australia by the practitioner of firearms parts for use by him in his hobbies of gun collecting and shooting. The practitioner pleaded guilty before the tribunal to some counts in this complaint and he was found guilty on those counts to which he pleaded not guilty. He appealed to this court against his conviction on certain counts and the appeal was allowed for the limited purpose of striking out some particulars in relation to two of the counts from the conviction.
In summarising the matters raised in the first complaint I will draw heavily on the summary which is contained in the judgment which I delivered as a member of the Full Court on the hearing of the appeal.
During April and May 1993 a series of letters passed between the practitioner and a man named Herberth who is a dealer in firearms based in Kentucky, USA. In the letters the practitioner discussed importing firearms into Australia. The correspondence was described by the tribunal in the following terms:
"The correspondence speaks for itself. It is alarming. Mr Kerin is endeavouring to incite Mr Herberth to become party to transactions some of which can only be described as dishonest. The correspondence from Mr Kerin is written upon his professional letterhead and includes references which show Mr Kerin to be contemplating the use of clients and friends for the purpose of his dishonest proposals."
The practitioner has since stated that he is thoroughly ashamed of what he wrote in the letters and he claims that much of it was fantasy. In particular he describes as false the claim he made in the correspondence that he had imported firearms into Australia illegally. It would appear that the practitioner did not enter into any transaction with Herberth as a consequence of the correspondence and he has not been charged with any offence by reason of the fact that he was the author of the letters sent to Herberth.
However the correspondence did come into the possession of the customs authorities who spoke to the practitioner about their contents. Furthermore the letters were tendered as part of the prosecution case against the practitioner in relation to an importation of goods which was unconnected with the correspondence. Presumably the relevance of the letters in that prosecution was that they indicated the practitioner's interest in importing firearms and associated items and, on their face, suggested that he would be prepared to flaunt customs regulations if necessary.
The correspondence was passed on to the South Australian Police Department by the Customs Service and Detective Superintendent Litster made some enquiries and spoke to the practitioner. The police decided not to take any action in respect of the letters but the Deputy Commissioner of Police sent copies of the correspondence to the complaints committee of the Law Society. The secretary of that committee forwarded them to the practitioner for explanation. The practitioner then wrote to the committee on 19th September 1994 in the following terms:
"I presume that Detective Jim Litster called you of his own volition - but nonetheless at the instigation of another. Detective Litster spoke to and asked me about the subject correspondence some months ago and after I advised him that I had already been asked about the subject correspondence by a senior Australian Customs Service officer - who had no real interest in the matter whatsoever - Detective Litster himself appeared to have no further interest in pursuing the correspondence any further.
I am unaware of to what ‘activities’ Deputy Commissioner Hurley might be referring in the third line of his letter to you of 19/8/94 - I having been involved in no knowingly improper activities whatsoever - and I respectfully submit that it should be considered to be most significant that the Police Department has no interest whatsoever in any action as a result of the correspondence.
I can understand Deputy Commissioner Hurley's concern at the ‘tenor’ of the documents as he calls it and it is for this reason that I am writing to you at length - not to justify my ‘attitude’ in the correspondence, but to explain it away."
He then commented in detail on what he had written to Herbeth. He concluded the letter as follows:
"May I apologize yet again most sincerely for any concern raised in the minds of any readers of the ‘prankish’ correspondence between Steve and I.
It should not, in my respectful submission, be felt that I am recklessly indifferent to all appropriate import rules and requirements. In fact I am regularly in the practice of importing whole firearms - including handguns - from America and go to pains to ensure that all requisite permission and approvals are obtained ahead of time. As evidence of this I also enclose herewith copies of:
1. An S.A. Police Department Firearms Section Form B709A in relation to a particular revolver;
2. A letter which I sent to the Australian Customs Service back in May in relation to the same commemorative revolver; and
3. The response from the Australian Customs Service to my letter to them.
The importation of the subject revolver was considered by the Australian Customs Service to have been much more ‘serious’ [if that is the right word] than the accessories and scopes which I had no problems in bringing back with me last year.
I have never actively sought to avoid my liability to duty or sales tax - notwithstanding my admittedly clumsy and cavalier initial attitude to the unsolicited offers made to me by Dave - and I do ask that it be noted that when it came to the crunch, as it were, at the time when I took delivery of the various accessories from Dave, I asked him for an invoice which showed the full and true value of all of the accessories which he had obtained for me. The quantum of these invoices were checked and verified by the Australian Customs Service.
In closing I offer still yet again to the committee my most sincere and heartfelt apologies for my less than judicious actions which were in any event never intended to publicly concern or embarrass anyone but which were only ever intended as and to be private correspondence between me and an associate in the United States."
In his evidence before the tribunal the practitioner conceded that he was aware prior to replying to the complaints committee that the prosecution intended to use the letter to Herberth as part of the case against him in the proceedings which were to take place in New South Wales. However he said that when Litster and Mr Howarth of the Customs Service spoke to him about the letter their enquiries were concentrated on whether any illegal activity was disclosed in the letter. The practitioner claimed that when he stated in his reply to the committee that he had been asked about the subject correspondence by a senior Customs Service officer "who had no interest in the matter whatsoever", he was confining his remarks to the correspondence and any offence which it might have disclosed. He said it was with the same thought in mind that he said that Detective Superintendent Litster "appeared to have no further interest in pursuing the correspondence further".
The practitioner's letter, taken at face value, conveyed the impression that the Customs Service officer had no interest in the correspondence at all. As the tribunal pointed out, it is obvious that such was not the case. The correspondence had led the Customs Service to investigate the practitioner and it was to be used as part of the prosecution case in relation to the pending proceedings. The practitioner knew this at the time he wrote his reply to the complaints committee.
The practitioner pleaded guilty to some counts, he was found guilty by the tribunal of other counts and the Full Court amended the tribunal’s decision in some respects. In the end result the practitioner was found guilty on five counts worded as follows:
"1. By letters dated the 27th day of April 1993, the 29th day of April 1993, the 9th day of May 1993 and the 17th day of May 1993 addressed to a Mr. Steve Herberth the practitioner sought to arrange for the importation into Australia of firearms or parts of firearms which he believed were prohibited imports.
2. By letter to Mr. Steve Herberth dated the 27th day of April 1993 the practitioner proposed dishonestly to avoid duty payable on imported goods.
3. On the 3rd day of July 1993 the practitioner knowingly made a statement to a customs officer that was false in a material particular namely that the practitioner was not bringing into Australia firearms or weapons.
4. On the 3rd day of July 1993 the practitioner brought into Australia prohibited firearms or parts thereof, namely:-
(1) one (1) barrel, handguard and upper-receiver assembly for an AR15 .223 Military rifle
[Counts (2) to (5) deleted by the Full Court]
(6) two (2) x 90 round .223 drum magazines for an AR15/M16 Military rifle.
5. By letter dated the 19th day of September 1994 to the Legal Practitioners Complaints Committee the practitioner misled or attempted to mislead the Committee in as much as he implied or stated:-
that the Australian Customs Service had no interest in the contents of the correspondence the practitioner had been having with Mr. Herberth, then knowing that the practitioner had been prosecuted under the Customs Act."
The second series of complaints brought against the practitioner relate to quite a different matter. The practitioner was convicted of certain charges of unprofessional conduct arising out of a mortgage practice which he conducted. The matter came before me as an appeal to a single judge from the tribunal. The appeal was brought by the Legal Practitioner’s Conduct Board which complained of the imposition of a fine of $4,000 for the conduct proved against the practitioner. The appeal was allowed and the order of the tribunal set aside. This enabled the matters raised in the second series of complaints to be added to the matters alleged in the first complaint for the purpose of the present application.
The practitioner resigned from a firm of solicitors in late 1987 to set up practice as a sole practitioner. The background to this second set of allegations is set out in detail in the tribunal’s findings and it is convenient to incorporate the relevant passage into these reasons:
"The practitioner formed a practice company known as Peter Kerin Nominees Pty Ltd. That company carried on the practice under the name of Peter Kerin & Associates. The practitioner was employed by the company. He and his wife were its directors.
The practitioner’s father, Mr Kevin Kerin, was a partner of Reilly Ahern and Kerin for many years. In the late 1960s, he established a mortgage practice which he conducted in addition to his solicitor’s practice. His modus operandi was to receive moneys from investors for the purposes of investment in contributory mortgages. Pending investment, the moneys were placed on deposit in a money market call account with a bank or other financial institution.
Mr Kevin Kerin had an arrangement with Mr Richardson of McRostie Landbrokers under which he contributed to various mortgages arranged by Mr Richardson. On being approached by a prospective borrower, it was Mr Richardson’s practice to value the property offered as security and make the usual preliminary searches and enquiries. He would then approach Mr Kevin Kerin to see whether he would be prepared to participate, along with other investors, in a contributory mortgage. The mortgages in question were always first mortgages. The principal sum lent generally did not exceed two thirds of the valuation placed on the property by Mr Richardson, but in some cases, where the borrower was well known and had a proven track record, the limit was extended to 75% of the valuation.
In contributing to a mortgage, it was Mr Kevin Kerin’s practice to utilise funds provided by persons who invested moneys with him. These persons were generally described as relations, friends and clients. He was not in the business of promoting the services of his mortgage practice to the public at large.
If a suitable contributory first mortgage was available, the funds were lent under that mortgage in the name of Mr Kevin Kerin as trustee for various of his investors along with other contributors who were clients of McRostie Landbrokers. In the early stages of the practice, a declaration of trust was executed in relation to each contribution to a mortgage. Later, the practice was streamlined by the execution of what has been described as a composite declaration of trust in the front of a Mortgage Register in which the details of the mortgages and the contributions to them were entered.
Where it was not possible to place funds on a first mortgage investment, those funds were placed in a money market account with one or other of the banks in Mr Kevin Kerin’s name. These moneys were available at call.
It was Mr Kevin Kerin’s practice to charge a commission of 3% on interest earned on investors’ funds laid out on mortgage security. He also charged a procuration fee on the grant of a new mortgage. This fee was payable by the borrower. It was generally of the order of 1% of the amount lent and was shared equally between himself and Mr Richardson. Mortgages were generally of a short term nature, say two years, but in any case where a mortgage was for a longer term, a higher procuration fee was charged. In relation to the money market account, a fee of 1% per annum of the funds invested was charged and deducted from the interest earned.
In early 1988, Mr Kevin Kerin had decided to retire from practice. He and the practitioner agreed that the practitioner would take over the mortgage practice as from 1 July 1988. In the first six months of 1988, the practitioner worked closely with this father in relation to the business with a view to becoming familiar with its operations as from the takeover date.
Whereas Mr Kevin Kerin held mortgages in his name, the practitioner decided to form a proprietary company to conduct the business. The company was known as Montana Investment Corporation Pty Ltd ("Montana"). The practitioner and his wife were the directors of the company. There were five shares on issue, four of which were held by the practitioner and one by a company known as C.I. Day Holdings Pty Ltd which held the share on trust for the practitioner.
The practitioner said in evidence that when he took over the mortgage business from his father, he contacted all investors other than those overseas to explain that he had taken over the business and said that at that time he also explained the commissions payable in respect of mortgages and the money market account, although nothing appears to have been said about the procuration fees. Contact in each case was made personally at the practitioner’s office or by telephone. We have no reason to disbelieve the practitioner on these matters, although it is unfortunate that the arrangements were not confirmed by letter or made the subject of even a diary note. There were a number of investors who resided overseas and who were friends of Mr Kevin Kerin. The practitioner arranged with him to contact those persons and explain the position on visits overseas.
When Montana took over the mortgage practice from the practitioner’s father, the value of the fund was of the order of $3.5 million. The practitioner maintained that it has been dwindling in value since.
The process of taking over the mortgage practice was attended with the minimum of formality. Nothing seems to have been put in place in the form of a notice to investors or even an internal memorandum from which an inference might be drawn as to the true nature of the arrangements between Montana and its investors. No declaration of trust was executed by Montana or even thought necessary when it took over the mortgage practice or at any time subsequently. No trust bank account for Montana appears to have been opened in order to keep investors’ money, as trust money, separate and apart from Montana’s own funds.
The mortgage business was carried on at the practitioner’s office at 118 King William Street, Adelaide, where he conducted his solicitor’s practice. Investors were in the habit of telephoning or consulting him there in relation to the mortgage practice. His staff did work from time to time in connection with the mortgage practice. This would include banking, the preparation of mortgages and mortgage discharges, general correspondence and answering the telephone.
Many of the records in relation to the mortgage practice were kept at the practitioner’s home as he and his wife did much of the work of writing up the books and making interest calculations after normal business hours and at weekends.
Montana used a letterhead in which its registered office was that of the practitioner’s practice. It also used the same post office box number, telephone and facsimile."
The allegations of misconduct are set out in two complaints, but it is convenient to discuss them under the six categories set out in my judgment on the earlier appeal.
First Complaint
The failure to deposit investment monies in a trust account as required by s31 of the Act
There was a plea of guilty to this charge. It was based on the practitioner’s failure to place the monies paid in by investors in the mortgage practice into his trust account during those periods when the monies were not employed in investments. It was not alleged that the practitioner’s failure emanated from a desire to deprive the Law Society of the interest to which it was entitled by reason of s57A of the Act. He simply continued to operate in the same way in which his father had done. However it was alleged that the effect of the practice was to deprive clients of the protection afforded by the trust account regulations and it in fact deprived the Law Society of the benefit of the deposit of these funds while investments were being arranged.
First Complaint
Failure to disclose to clients the full extent of the profit made by Montana and failure to advise them to obtain independent advice
This charge was based on the fact that Montana charged borrowers a procuration fee and the practitioner did not advise his clients of that fact. Nor did he tell them that this was a matter upon which they might seek independent legal advice. This also was an aspect of the scheme at the time he took it over from his father.
First Complaint
The making of unsecured advances of clients’ monies to companies in which the practitioner had an interest and when that interest was not disclosed
The transactions which form the basis of this charge are summarised in the first complaint as follows:
"(a) On 15th day of August 1991 Montana made an unsecured loan of $27,000 to C.I. Day Enterprises Pty Ltd. At the time of the loan the practitioner held shares in that company.
(b) On the 2nd day of April 1992 Montana made an unsecured loan of $20,000 to the Day Corporation Pty Ltd. At the time the practitioner held shares in that company.
(c) On the dates listed below in the left hand column Montana made unsecured loans in the amounts listed below in the right hand column to Peter Kerin Nominees Pty Ltd. At the time Peter Kerin Nominees Pty Ltd was the practice company of the practitioner and in which the practitioner held the majority of shares.
Dates Amounts
5/2/92 $ 5,400.00
6/2/92 $13,000.00
1/5/92 $ 3,000.00
21/1/93 $ 9,100.00
12/2/93 $15,000.00
25/2/93 $10,000.00
8/3/93 $10,000.00"
It was alleged against the practitioner that an inference could be drawn from the course of dealing with these clients that they did not authorise unsecured loans and that their understanding was that any investments would be by way of mortgage. This was not a feature of the practice when it was operated by the practitioner’s father.
First Complaint
The deposit of monies received from clients in the course of the practitioner’s legal practice into the account of Montana and not, as was required, into his trust account
The particulars of this charge were set out in the first complaint as follows:
"(a) On the 12th day of September 1990 the practitioner held $182,665.71 on trust for the beneficiaries of the estate of M.J.V. Daly, and on that date, the practitioner invested that amount in Montana’s SBSA money market account. That investment was redeemed on the 5th October 1990. During the period in which that amount was so invested interest was derived by Montana.
(b) On the 14th day of December 1990 the practitioner held $60,817.05 on trust for the beneficiaries of the estate of N.D. Cox and on that date, the practitioner invested that amount in Montana’s SBSA money market account. That investment was redeemed on the 11th March 1991. During the period in which that amount was so invested interest was derived by Montana.
(b)(ii) On the 20th day of December 1990 the practitioner held a further $57,369.48 on trust for the beneficiaries of the estate of N.D. Cox and on that date, the practitioner invested that amount in Montana’s SBSA money market account. The investment was redeemed on the 11th March 1991. During the period in which that amount was so invested interest was derived by Montana.
(c) On the 25th January 1991 the practitioner held $26,399.18 on trust for S & S Chiefari and on that date, the practitioner invested that amount in Montana’s SBSA money market account. That investment was redeemed on the 31st January 1991. During the period in which that amount was so invested interest was derived by Montana."
These monies were not part of the practitioner’s mortgage practice. The circumstances of the various transactions as alleged by the Legal Practitioner’s Conduct Board are summarised in its written submissions:
"(i) The estate of Daly.
$182,665.71 was received on the 12th September 1990 and deposited in Montana on that day. It was not transferred to the Trust Account of the practitioner until 5th October 1990. The interest earned on the deposit by Montana was not credited to the estate of Daly and the accounts of the practitioner and Montana do not disclose what happened to it. The Practitioner said that he was authorised, orally, to make the deposit in Montana and subsequently received written instructions to do so and that he was instructed to credit the interest received against legal fees due to him with respect to the administration of the estate. This set off (interest as against fees) was not identified in the Practitioner’s accounts.
(ii) The estate of Cox.
In December 1990 the Practitioner received two sums totalling $118,186.53 as part of the estate of Cox. Those sums were placed in Montana until 11th March 1991, i.e. for a period of just under three months, and during this period Montana received interest on that deposit. The interest earned was calculated at $3,199.22. No documents were produced by the Practitioner to suggest that the estate received that interest or was given credit for it.
(iii) The Chiefari Conveyance.
In January 1991 the Practitioner received a cheque for $26,399.18 payable to a third party as part of a conveyancing transaction. The Practitioner negotiated that cheque by depositing it in the account of Montana where the proceeds remained for six days. Montana did not account for the interest received."
First Complaint
The appropriation of $20,000 standing to the credit of a client’s account with Montana and the transfer of the amount into the practitioner’s firm account as payment for professional fees without the rendering of an account
The practitioner pleaded guilty to this charge. This client placed monies with the practitioner which were then invested through Montana. During this period the client was charged with a criminal offence. The practitioner acted as solicitor in the matter and briefed counsel to appear at the trial. On 28th June 1991 $20,000 was withdrawn from the client’s account with Montana and deposited in the practitioner’s account in payment of legal fees. No account was rendered at the time as is required by s41 of the Act. An account was rendered on 29th August 1991 after another solicitor had been retained to act for the client in respect of an appeal in the criminal matter. It would appear that the practitioner was entitled to claim fees at least to the extent of the monies deducted. The gravamen of the misconduct was the failure to render an account.
Second Complaint
Failure to advise of a conflict of interest which the practitioner had between his financial interest in Montana and his duty towards his clients and failure to advise his clients that they should seek independent advice.
(The Rimington Loan)
The circumstances of this charge arise out of the mortgage practice. The tribunal’s findings are summarised in their reasons for decision as follows:
"On or about 1 October 1990, the practitioner organised a syndicate of investors to lend $235,000 as a contribution to be made in the name of Montana in a loan totalling $540,000 to Mrs Janet Rimington. The total loan of $540,000 was secured by a first mortgage over a property situated at Hutt Street, Adelaide. Some 7 of the practitioner’s investor clients named in paragraph 2 of the complaint were involved.
We find that at all material times in relation to the Rimington loan there was a solicitor and client relationship between the practitioner and the investors. This is so notwithstanding that the loan was made using Montana as the vehicle for that purpose. As we have already found, the mortgage practice conducted through the instrumentality of Montana was an integral part of the practitioner’s practice.
Mrs Rimington defaulted in the payment of interest in November 1990. Mr Richardson from McRostie Landbrokers contacted the practitioner and suggested that the arrears of interest would be paid shortly. In fact, the arrears were paid in December.
Mrs Rimington defaulted again in the payment of interest in February 1991. Mr Richardson again approached the practitioner and suggested that the default was of a temporary character.
On each default, the practitioner continued to remit payments to the investors.
The practitioner made the point that he had in the past on occasions advanced interest payments to investors where borrowers had defaulted on the basis that the borrowers were suffering no more than a temporary shortage in liquidity and that they would be in a position to make up the arrears shortly.
The arrears of interest in respect of the Rimington loan were not paid and after a period of four or five months, the practitioner formed the view that the arrears would not be made up and that proceedings to enforce the mortgage would be necessary. Neither the practitioner nor his father had ever encountered a serious default on the part of a borrower, so that the Rimington experience was new.
The particulars of the complaint of unprofessional conduct in relation to the Rimington matter are set out in paragraph 14 of the complaint.
As to paragraphs 14(a) and (b), we are satisfied that the practitioner did not disclose the procuration fees to the Rimington investors. The failure to disclose these fees amounted to unprofessional conduct on his part. We are also satisfied that the practitioner did not advise the investors in the Rimington mortgage that they should seek independent legal advice before placing the moneys on mortgage. Such failure amounted to unprofessional conduct.
However, the failure to advise those fees and the failure to advise that independent legal advice be obtained in relation to the Rimington transaction are nothing more than specific instances of more general findings of unprofessional conduct referred to in paragraphs 7A and 8A of the first complaint."
It is alleged that a serious aspect of the practitioner’s conduct in relation to this transaction is that he deducted the amounts which he had credited previously to the accounts of the various contributors without suggesting they receive advice on the matter. It is true that the interest had not been paid by the borrower to Montana but amounts were paid by way of interest to the contributors in anticipation that the borrower would remedy her default. Mr Quick QC, for the Society, pointed out that there may be room for dispute about the liability of the contributors to the subsequent deductions and the practitioner acted in a way favourable to his own interest by deducting the amounts and paying them into his own company Montana. It was a clear case, said Mr Quick, for the contributors to be advised that they should seek independent legal advice.
Mr Quick asked the court to consider the totality of the conduct established against the practitioner in the two sets of proceedings. He placed particular emphasis on the practitioner’s untruthfulness in misleading the complaints committee at a time when he was also being investigated in relation to the mortgage practice. Mr Quick said the correspondence with the firearms dealer in America indicated a preparedness by the practitioner to become involved in illegal importation of firearm parts. He pointed out that the practitioner was about 32 years of age at the time of the correspondence.
Mr Quick then turned his attention to the misconduct involved in the mortgage practice. He said the investment monies should have been put into the practitioner’s trust account. The fact that they were not deprived the Law Society of interest it would have received from the trust account, although it was conceded that the owners of the amounts deposited were not deprived of any funds due to them. The fact that the funds were not placed in the trust account also meant that they were not audited. It was pointed out that the plaintiff did not disclose to the investors the procuration fee of 1% received from the borrowers. Some of the funds were advanced without security although it was not suggested that the investors lost anything as a result of this practice.
Mr Quick drew attention to the fact that the funds from the estates of Daly and Cox and from the Chiefari conveyancing transaction were placed in the Montana account instead of the trust fund. He also highlighted the Rimington transaction, an important feature of which was that the practitioner did not raise with the investors the possibility that they might seek independent legal advice in view of the possible conflict between a company in which he had an interest and the investors who had deposited money with him.
Mr Hayes QC, for the practitioner, stressed the fact that the investors of the mortgage funds had not lost money as a result of these activities; nor was it suggested by the Law Society that the practitioner had acted fraudulently in any of the transactions. He reminded the court that the practitioner no longer operated the mortgage practice. He said the practitioner was very young when he inherited the mortgage practice from his father. He submitted that simply because the practitioner had lied in relation to the firearms allegations, did not mean that he could never be trusted to tell the truth. He pointed out that the plaintiff had continued to practice since these incidents and no further complaints had been made in relation to his conduct. The practitioner gave evidence. He apologised to the court for his conduct and said he had been supervised recently by a senior member of the profession. He is now in the habit of seeking advice from senior practitioners in relation to his practice.
The firearms importation matters had no connection with the practitioner’s legal practice, although he did write letters on his firm’s notepaper. Of course this does not mean that the correspondence and the importation cannot be taken into account when assessing the practitioner’s fitness to practice. I also agree with the tribunal’s assessment of the practitioner as having acted in an immature fashion. The deliberate misleading of the complaints committee is a more serious consideration, although there is force in Mr Hayes’ argument that this one incident should not be taken as an indication that the practitioner could never be accepted as truthful.
In the case of the mortgage practice it is relevant to have regard to the tribunal’s findings that the practitioner, albeit erroneously, regarded the mortgage practice as separate and apart from his legal practice; that he had inherited it from his father and did not appear to have turned his mind to the legal issues affecting the business; that there was no evidence of conscious deception; and that there was no failure to account to his client. Nevertheless it should have been apparent to the practitioner that he breached his duties as a fiduciary in a number of respects.
I have reached the conclusion that this is not a case which calls for the removal of the practitioner’s name from the roll of practitioners. In my opinion the fact that the practitioner was brought before the tribunal and this court with the attendant publicity and legal costs, coupled with a period of suspension, should bring home to other members of the profession and the public the court’s insistence on practitioners observing high standards. I think the case comes within the category of cases referred to by King CJ in In re a Practitioner 36 SASR 590 when he said (p593):
"The proper use of suspension is, in my opinion, for those cases in which a legal practitioner has fallen below the high standards to be expected of such a practitioner, but not in such a way as to indicate that he lacks the qualities of character and trustworthiness which are the necessary attributes of a person entrusted with the responsibilities of a legal practitioner."
(See also the decision of Matheson J in In the Matter of Mahony (1996) 189 LSJS 205.)
After balancing the matters to which I have referred I have reached the conclusion that it would be appropriate to suspend the practitioner from practice for a period of 18 months.
Matheson J
I agree with the order proposed by Duggan J and with his reasons.
Nyland J
I agree with the order proposed by Duggan J for the reasons he has expressed.
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