Law Society of New South Wales v Boland

[2001] NSWADT 151

CITATION:	Law Society of New South Wales -v- Boland [2001] NSWADT 151
DIVISION:	Legal Services Division
PARTIES:	APPLICANT Council of the Law Society of New South Wales RESPONDENT Marcus Stephen Boland
FILE NUMBER:	002012
HEARING DATES:	24/07/2001
SUBMISSIONS CLOSED:	07/24/2001
DATE OF DECISION:	09/13/2001
BEFORE:	Macfarlan R QC - Judicial Member; Staff C - Judicial Member; Brehe D - Member
APPLICATION:	Professional Misconduct - breach of s. 61 of the Legal Profession Act - Professional Misconduct - fail to keep accounts - Professional Misconduct - mislead Law Society/Bar Association/LSC
MATTER FOR DECISION:	Principal matter
LEGISLATION CITED:	Legal Profession Act 1987
CASES CITED:	Allinson -v- General Council of Medical Education & Registration (1894) 1 QB 750 Law Society of NSW -v- Foreman (1994) 34 NSWLR 408 Gill -v- Walton (1991) 25 NSWLR 90
REPRESENTATION:	APPLICANT P Boyd, solicitor RESPONDENT N Eddy, solicitor
ORDERS:	1. That the Legal Practitioner be and he is hereby publicly reprimanded; 2. That a practising certificate not be issued to the Legal Practitioner until a period of five years has expired from the date of these orders; 3. That upon commencing to again practice as a Legal Practitioner, the Legal Practitioner’s practising certificate be endorsed with a condition restricting the Legal Practitioner for a period of three years from acting as a Solicitor otherwise than in the course of employment by a Solicitor holding an unrestricted practising certificate; 4. That the Legal Practitioner undertake and satisfactorily complete the Best Practice Management course, or its equivalent (to be determined by the Manager Professional Standards Department of the Law Society of New South Wales) prior to being issued with a practising certificate; 5. The Legal Practitioner pay the costs of the Council of the Law Society as agreed or as assessed.

1 The Council of the Law Society of New South Wales (“the Law Society”) informed the Tribunal that as a result of an investigation of complaints made under Part 10 of the Legal Profession Act, 1987 (“the Act”) Marcus Stephen Boland (“the Legal Practitioner”) while practising as a Legal Practitioner, was guilty of professional misconduct. The grounds relied upon by the Society were as follows:
(i) the Legal Practitioner failed to account for the sum of One thousand dollars ($1,000.00);
(ii) the Legal Practitioner transferred files and trust moneys belonging to Mr & Mrs Champion, Mr Ernest Bovard, Mr Ross Johnston and Mrs Cassandra McSweeney from Messrs Boland & Co., without the consent of those clients;
(iii) the Legal Practitioner misled, or endeavoured to mislead the Law Society in his letter of 7 October, 1993, attempting to explain an apparent trust account deficiency of about One thousand seven hundred dollars ($1,700.00);
(iv) in the matter of David Matich, the Legal Practitioner delayed from 1989 until 1992 to take appropriate steps in relation to the lodgement of a Notice of Claim with the Government Insurance Office in respect to Mr Matich’s personal injury claim;
(v) the Legal Practitioner wilfully breached s.61 of the Legal Profession Act;
(vi) the Legal Practitioner wilfully breached s.62(1) of the Legal Profession Act.
2 The following particulars were given:
First Complaint
(i) As at 6 February, 1993 the Legal Practitioner’s ledger card for Braypack Pty Limited after initially showing a debit balance of $705.64 was altered to show a “Nil” balance.
(ii) On 8 February, 1993 the Legal Practitioner drew a cheque for $1,000.00 on the Braypack Pty. Limited trust account when he knew or was recklessly indifferent to the fact that there were no further funds to the credit of the client in his trust account.
(iii) See R.J. Porter reports of 12 October, 1993 and 5 September, 1994.

Second Complaint
(a) Transferring files
(i) Until 30 June, 1992 the Legal Practitioner was an employee of the firm Boland & Co., of Bankstown.
(ii) On 1 July, 1992, the Legal Practitioner commenced practice under the name and style Boland Partners at Rozelle.
(iii) Without the knowledge or consent of T. & V.M. Champion, Ernest Bovard, Ross Johnston and Cassandra McSweeney their files were transferred by the Legal Practitioner from Boland & Co., to the firm Boland Partners.
(a) Transferring trust moneys
(i) With respect to the aforementioned clients, without their knowledge or consent, trust moneys held by the firm Boland & Co., as per the Schedule below were transferred or caused to be transferred by the Legal Practitioner to the firm Boland Partners.


THE SCHEDULE
NAME AMOUNT TRANSFERRED
T. & V.M. Champion $487.29
Ernest Bovard $144.80
Ross Johnston $ 56.00
Cassandra McSweeney $ 56.00
(ii) See R.J. Porter report of 5 September, 1994.

Third Complaint
(i) By letter of 7 October, 1993, the Legal Practitioner wrote to the Law Society stating:
“We refer to the abovenamed and enclose properly executed Accountant’s Report for your purposes.
We wish to advise that in regards to the supposed deficiency in the trust account of some $1,700.00, we believe this to be both misleading and incorrect.
We believe that these monies represent our own part costs and disbursements on various matters which were all billed properly and appropriately previous to our taking of these monies on 6 February, 1993 and 9 February, 1993.
We have enclosed a copy of all applicable ledgers highlighting those matters from which costs were taken and transferred by internal transfer to the account and ledger of Mr Champion.
…At all times Mr Boland believed this payment to be appropriate and within the bounds of trust account practice as he had previously rendered bills for part costs and disbursements which meant that he had sufficient costs “in reserve” upon which to draw in the trust account as and when required.
Therefore in reality Mr Boland used his own costs and disbursements monies to fully satisfy one client, whilst the other client remains indebted to Mr Boland in the sum of $1,705.64.
Appropriate ledger entries were then made on the 9th of February 1993 upon Mr Boland’s return to Sydney and our offices.”

The above statement was, to the knowledge of the Legal Practitioner false. No entries were made on 9 February, 1993.
(ii) See R.J. Porter report dated 12 October, 1993.
Fourth Complaint
(i) On 2 February, 1989 David Matich was injured in a motor vehicle accident.
(ii) Thereafter the Legal Practitioner acted on behalf of David Matich.
(iii) The Legal Practitioner did not forward to the Government Insurance Office the relevant notice under the provisions of the Motor Accidents Act until 21 August, 1992.

Fifth Complaint
(a) Braypack Pty. Limited
(i) At all relevant times the Legal Practitioner acted for Braypack Pty. Limited.
(ii) Monies were advanced to Braypack Pty. Limited by T. & V.M. Champion and the Estate Late Albert David Abbott. The Legal Practitioner acted for all parties on the advances.
(iii) The Estate of the Late Albert David Abbott was repaid $27,705.78 on 18 December, 1992.
(iv) T. & V.M. Champion were repaid $53,000.00 on 6 February, 1993.
(v) T. & V.M. Champion were repaid $1,000.00 on 8 February, 1993 with the effect that the Trust Account ledger of Braypack Pty. Limited was overdrawn in the sum of $1,000.00.
(vi) See R.J. Porter reports dated 12 October, 1993 (pages 2 and 3) and 5 September, 1994.
(a) T. & V.M. Champion
(i) As at 19 August, 1992 the Legal Practitioner held in his trust account on behalf of Mr & Mrs T. & V.M. Champion the sum of $487.29.
(ii) By entry dated 9 February, 1993 the said sum of $487.29 was transferred by the Legal Practitioner without the knowledge or consent of Mr & Mrs T. & V.M. Champion.
(iii) See R.J. Porter reports dated 12 October, 1993 and 5 September, 1994.
(a) Ernest Bovard
(i) As at 19 August, 1992 the Legal Practitioner held in his trust account on behalf of Mr Bovard the sum of $477.58.
(ii) Between 18 January, 1993 and 9 February, 1993 the total sum of $477.58 was transferred by the Legal Practitioner. At the time of the transfers Mr Bovard was deceased and the Legal Practitioner had no other authority to transfer the moneys.
(iii) See R.J. Porter report dated 12 October, 1993 and 5 September, 1994.
(a) Ross Johnston
(i) As at 19 August, 1992 the Legal Practitioner held in his trust account on behalf of Mr Johnston the sum of $56.00.
(ii) By entry dated 9 February, 1993 the said sum of $56.00 was transferred by the Legal Practitioner without the knowledge or consent of Mr Johnston.
(iii) See R.J. Porter report dated 12 October, 1993 and 5 September, 1994.
(a) Cassandra McSweeney nee Dalley
(i) As at 19 August, 1992 the Legal Practitioner held in his trust account on behalf of Ms McSweeney the sum of $56.00.
(ii) By entry dated 9 February 1993 the said sum of $56.00 was transferred by the Legal Practitioner without the knowledge or consent of Ms McSweeney.
(iii) See R.J.P. reports dated 12 October, 1993 and 5 September, 1994.

Sixth Complaint
(i) Following the commencement of his practice on 1 July, 1992 the Legal Practitioner failed to write up or reconcile his records so that the accounting records did not disclose at all times the true position in relation to money received by him.
(ii) See R.J. Porter report dated 12 October, 1993.

The Response of the Legal Practitioner

3 The Legal Practitioner, who was represented at the hearing by Mr Eddy, solicitor, pleaded guilty to the six complaints of professional misconduct. The allegations made against him were expressly admitted.

The Evidence

4 The Law Society tendered, without objection, an Affidavit of Richard James Porter, Chartered Accountant, who was appointed as an Investigator pursuant to s.55 of the Act, by the Law Society to examine the affairs of the Legal Practitioner. Mr Porter was called to give some short oral evidence and was not cross-examined.

5 The Society also relied upon two Affidavits of Raymond John Collins, Manager of the Professional Standards Department of the Law Society sworn 1 August, 2000 and 1 December, 2000, respectively. These Affidavits were admitted, without objection, and Mr Collins was not required for cross-examination.

6 Mr Eddy tendered an Affidavit of the Legal Practitioner sworn 7 June, 2001. The Legal Practitioner also gave some short oral evidence during which he indicated that he was regretful and contrite in relation to his conduct the subject of the complaints and during which he gave an undertaking to the Law Society that he would not seek to renew his practising certificate for a period of five years. Furthermore, the Legal Practitioner undertook to pay the Law Society’s costs which were assessed to be $25,000.00, subject to being provided with a formal account setting out professional fees and disbursements.

The Legal Practitioner’s Personal Circumstances

7 The Legal Practitioner was admitted to practice in July, 1986. However, the Legal Practitioner did not commence work as a Legal Practitioner until 1989 when he was aged 28 years. On 30 June, 1992, the Legal Practitioner set up his own practice, after leaving the employment of his uncle who practised under the name of Boland & Co. The Legal Practitioner has not practised since 30 June, 1995.

Submissions on Behalf of the Legal Practitioner

8 It was submitted on behalf of the Legal Practitioner that all of the matters complained of occurred within months of the Legal Practitioner setting up his own practice. It was further submitted that the conduct complained of was not caused through dishonesty, but rather, as a result of lack of experience and naivety. In addressing each of the complaints, which were admitted, Mr Eddy made the following submissions:
(i) The overdrawing of the trust account of Braypack Pty Limited, the subject of the first complaint, occurred after the Legal Practitioner had been in practice on his own account for only some seven months.
(ii) The Legal Practitioner had a genuine belief that the files and trust funds the subject of the second complaint were transferred with the consent of the clients. The files were transferred from his uncle’s practice known as Boland & Co., together with moneys held in his uncle’s Trust Account. The Legal Practitioner assumed that his uncle had obtained the consent of the clients, but conceded he did not get a written authority from them.
(iii) In respect of the third complaint, which the Tribunal regards as the most serious, it was submitted that the Legal Practitioner was contrite and that it resulted from a lack of experience. It was acknowledged on behalf of the Legal Practitioner that he had no excuse for his conduct.
(iv) In respect of the fourth complaint, it was submitted that instructions were received whilst the Legal Practitioner was employed in his uncle’s firm and that he did not have the day-to-day conduct of the Matich matter. The Legal Practitioner accepted that the delay had occurred but that this was at his uncle’s firm where he was an employed Legal Practitioner.
(v) The Legal Practitioner admitted to wilfully breaching s.61 and 62(1) of the Act.
(vi) In addition, it was submitted that the complaints had impacted on the Legal Practitioner’s private life. His marriage had broken down with his wife now residing in Taree with their 9 year old child.

9 In light of the admissions of the Legal Practitioner, it is unnecessary to deal in detail with the allegations of professional misconduct. We therefore limit our comments and findings to the following.

10 Notwithstanding the admissions that have been made, we are not prepared to find professional misconduct in respect of the first, second and fourth complaints.

11 Whilst we do not suggest that the conduct the subject of these complaints is not deserving of condemnation (which we believe it is), we are not satisfied that what has been proved is of sufficient gravity to be regarded as “disgraceful or dishonourable” by solicitors of good repute (see Allinson -v- General Council of Medical Education & Registration (1894) 1 QB 750 at 763). The first matter complained of clearly involved an irregularity but did not involve any dishonesty on the part of the Legal Practitioner. The second arose from unwarranted assumptions as to clients’ instructions and, so far as the funds were concerned, involved only very small amounts of money. The subject of the fourth complaint was an entirely unacceptable delay in the lodgement of a Personal Injuries Claim form on behalf of a Mr Matich. Only a small part of the delay occurred whilst the Legal Practitioner was in practice on his own account and it has not been proved to our satisfaction that he was the person responsible for the failure of Boland & Co to lodge the form during the preceding years whilst the Legal Practitioner was in the employ of his uncle.

12 However, we find the Legal Practitioner guilty of professional misconduct in respect of the matters the subject of the third, fifth and sixth complaints.

13 The conduct the subject of the third complaint involved the making by the Legal Practitioner of a statement to the Law Society in connection with its investigation. The statement has now been accepted to have been knowingly false. This was a serious matter and such as would in our view have been regarded by solicitors of good repute as “disgraceful or dishonourable”. The fifth and sixth complaints alleged wilful breaches of ss.61(1) and 62(1) of the Legal Profession Act. As indicated earlier, these allegations were admitted. In these circumstances, ss.61(7) and 62(4) operated to deem the contraventions to be professional misconduct.

Penalty

14 When a finding of professional misconduct, or unsatisfactory professional conduct is made, the primary duty of the Tribunal is protection, rather than punishment. Mahony, JA said in Law Society of NSW -v- Foreman (1994) 34 NSWLR 408 in relation to that duty that it …
“Extends to protecting the public from similar defaults by other practitioners. Thus, it is relevant to take into account the effect the order will have upon the understanding in the profession and amongst the public of the standard of behaviour required of Legal Practitioners. In this sense, any penalty imposed should contain an element of general deterrence, publicly marking the seriousness of what the instant Legal Practitioner has done.”

15 In the present case there is, as was submitted to us, no evidence of continuing conduct on the part of the Solicitor ”… against which the public requires protection, or which reflects upon [his] fitness to practice”. Gill -v- Walton (1991) 25 NSWLR 90, at 201 per Gleeson C.J. His Honour went on to observe (at 202) that the fact that nothing is occurring or has recently occurred is a matter to be taken into account. This is however of limited relevance in this case as Mr Boland has not practised since 30 June 1995.

16 Any professional misconduct by a Legal Practitioner is a serious matter. The Tribunal must endeavour to ensure that the misconduct is not repeated by the Legal Practitioner and that other practitioners appreciate the seriousness and consequences of such misconduct. The public is certainly entitled to expect that if complaints are made against practitioners, the practitioners will respond promptly and truthfully to the investigating authority.

17 S.171C of the Act provides a wide range of orders which the Tribunal may make. While the Tribunal is encouraged by the course which the hearing before it took to have an expectation of suitable future conduct by the Legal Practitioner, the protective role that the Tribunal has, makes it incumbent upon the Tribunal to ensure that if and when the Legal Practitioner returns to practice, that he clearly perceives the nature of his duties and that the public is protected against the risks of repetition of his misconduct.

18 The Tribunal notes the Legal Practitioner’s undertaking that he will not seek re-admission for a period of five years and will make an order reflecting this concession.

19 The orders proposed to be made will include an order that on his re-admission not less than 5 years hence the Legal Practitioner’s practising certificate be endorsed with a condition restricting the Legal Practitioner for a period of three years from acting as a Solicitor otherwise than in the course of employment by a Solicitor holding an unrestricted practising certificate.

20 As we have already noted, the Legal Practitioner accepts that he should be responsible for the costs of the Law Society

21 The Tribunal finds that it is proper that the Legal Practitioner be publicly reprimanded, be ordered to pay the costs of the Law Society, as well as being precluded from practising as a sole practitioner, or in a partnership, for a minimum of three years after he resumes practice.


ORDERS
22 For these reasons, we make the following orders:
(1) That the Legal Practitioner be and he is hereby publicly reprimanded.
(2) That a practising certificate not be issued to the Legal Practitioner until a period of five years has expired from the date of these orders.
(3) That upon commencing to again practice as a Legal Practitioner, the Legal Practitioner’s practising certificate be endorsed with a condition restricting the Legal Practitioner for a period of three years from acting as a Solicitor otherwise than in the course of employment by a Solicitor holding an unrestricted practising certificate.
(4) That the Legal Practitioner undertake and satisfactorily complete the Best Practice Management course, or its equivalent (to be determined by the Manager Professional Standards Department of the Law Society of New South Wales) prior to being issued with a practising certificate.
(5) The Legal Practitioner pay the costs of the Council of the Law Society as agreed or as assessed.