Law Society of New South Wales v Bonham

[2008] NSWADT 55

CITATION:	Law Society of New South Wales v Bonham [2008] NSWADT 55
DIVISION:	Legal Services Division
PARTIES:	APPLICANT The Council of the Law Society of New South Wales RESPONDENT Samantha Jane Bonham
FILE NUMBER:	072018
HEARING DATES:	21 September 2007
SUBMISSIONS CLOSED:	21 September 2007
DATE OF DECISION:	27 February 2008
BEFORE:	Vass CB -Judicial Member; Currie JS - Judicial Member; Kirkby E - Non Judicial Member
CATCHWORDS:	Solicitor – Disciplinary application
MATTER FOR DECISION:	Principal matter
LEGISLATION CITED:	Legal Profession Act 2004
CASES CITED:	Johns v Law Society of New South Wales [1982] 2 NSWLR 1; Law Society of New South Wales v Moulton [1981] 2 NSWLR 736; Prothonotary of the Supreme Court of New South Wales v Trimarchi [2003] NSW CA 385; Re a Barrister and Solicitor (1979) 40 FLR 1; Re a Practitioner (1984) 36 SASR 590; Riley Solicitors' Manual [35, 065.5].
REPRESENTATION:	APPLICANT D Barton, solicitor RESPONDENT No appearance
ORDERS:	1. No law practice may employ or pay the Respondent in connection with the legal practice engaged in by the law practice, without approval under section 17 of the Legal Profession Act 2004. 2. The Respondent pay the costs of the Law Society of and incidental to these proceedings, within 6 months of those costs being agreed or assessed.

REASONS FOR DECISION

The Application for Decision

1 By its Application for Original Decision filed on 9 May 2007, the Council of the Law Society of New South Wales made an Application pursuant to section 18(2) of the Legal Profession Act 2004 ("the Act"), in respect of the Respondent Samantha Jane Bonham. The Application sought an order under section 18(2) of the Act prohibiting (without approval under section 17) any law practice from employing or paying the Respondent in connection with the legal practice engaged in by the law practice, together with an order that the Respondent pay the applicant's costs of the proceedings.

2 The Application stated the grounds for this Application as being:

(a) the Respondent is not a fit and proper person to be employed or paid in connection with any legal practice, and/or

(b) the Respondent has been guilty of conduct, which, if the Respondent were an Australian legal practitioner, would have constituted professional misconduct.

3 The Application stated that the Respondent misappropriated trust monies and also misappropriated monies from the law practice known as King Cain, Solicitors practising in Bathurst ("the Law Practice").

4 The Application is significant because it appears to be the first Application for orders of this type under the Legal Profession Act 2004.

The allegations by the Law Society

5 The Application sets out, in its annexed Particulars, allegations of misappropriation by the Respondent in respect of the Law Practice. Schedule 1 of the Particulars alleges that in respect of the trust account there were 22 instances of misappropriation between 31 May 2006 and 28 August 2006, totalling $6,847. Schedule 2 of the Particulars alleges that in respect of the general account (that is the monies of the Law Practice) there were 65 instances of misappropriation between 21 February 2006 and 28 August 2006 totalling $19,720.75.

6 These allegations are supported by the affidavits of Raymond John Collins, the Manager of the Professional Standards Division of the Law Society sworn on 8 May 2007 and the affidavit of James Sofiak, who was the Investigator appointed under Division 3 of the Act in respect of the Law Practice and the Respondent, sworn on 23 April 2007.

The alleged Modus Operandi

7 Essentially it is alleged that the Respondent, who was during the relevant period employed as an Accounts bookkeeping clerk in the Law Practice, over a period between February and August 2006 failed to deposit into the trust or office accounts (as appropriate) amounts received from clients and others in cash, and that the Respondent misappropriated these monies for her own benefit. This allegation is supported by statements of various clients of King Cain, which are annexed to the affidavit of James Sofiak.

The Respondent's position

8 By a reply filed on 20 August 2007 the Respondent admitted all the Particulars.

9 The Respondent, although she received notice of the date of the hearing and was called at the commencement of the hearing, made no appearance at the hearing of the Application on 21 September 2007.

The Tribunal's view of the actions of the Respondent

10 The evidence brought by the Law Society in the Tribunal's view clearly establishes a sustained practice by the Respondent, in her capacity as an employee of the Law Practice, to misappropriate cash amounts received from clients.

11 In relation to ground (a) of the Application, in order to make the substantive order sought the Tribunal is required to be of the view that the Respondent is not a fit and proper person to be employed or paid in connection with any legal practice.

12 In relation to ground (b) of the Application, in order to make the substantive order sought the Tribunal is required to find that the Respondent has been guilty of conduct which, if the Respondent were an Australian legal practitioner, would have constituted professional misconduct.

13 In relation to ground (a) any employee who wilfully misappropriates cash amounts received from clients of a law firm is clearly not a fit or proper person to be employed or paid in connection with any legal practice. Accordingly the Tribunal finds that the Respondent is not a fit and proper person to be employed or paid in connection with any legal practice, subject to the rights of the Respondent to make an application under section 17 of the Act.

14 In relation to ground (b) the law is clear that the fraudulent misappropriation of money received on behalf of another person is professional misconduct and that if a lawyer is guilty of that conduct this justifies an order striking off the lawyer involved: see Riley Solicitors' Manual [35, 065.5] and the authorities referred to therein, including Prothonotary of the Supreme Court of New South Wales v Trimarchi [2003] NSW CA 385; Re a Barrister and Solicitor (1979) 40 FLR 1; Law Society of New South Wales v Moulton [1981] 2 NSWLR 736; Johns v Law Society of New South Wales [1982] 2 NSWLR 1; and Re a Practitioner (1984) 36 SASR 590.

15 In this case clearly the Respondent has acted dishonestly in misappropriating the money. If the Respondent had been a legal practitioner, the Tribunal would have found her guilty of fraudulent misappropriation and for those reasons the Tribunal finds that the Respondent has been guilty of conduct, which, if the Respondent were an Australian legal practitioner, would have constituted professional misconduct.

16 With reference to sub-section 18(3) of the Act, the Tribunal sees no reason to limit any prohibition order against the Respondent to a specified law practice or a specified class of law practices.

Obligations of the Council of the Law Society under section 20(4) of the Act

17 In his submissions at the hearing, Mr Barton representing the Law Society, drew the Tribunal's attention to sub-section 20(4) of the Act which provides that:

"(4) A Council must:

(a) retain in its office a register of orders made under section 18 or 19 on its Application or approvals given by it under section 17; and

(b) permit the register to be inspected during office hours and without charge, but only if the inspection is made by an Australian legal practitioner."

18 In the Tribunal's view it is most important that a practical avenue should exist for the recording of prohibition orders made against employees of legal practices, under section 18 of the Act. Firstly, this is in accordance with the general purpose of Part 2.2 of the Act to protect the public interest in the proper administration of justice by ensuring that legal work (and in the opinion of the Tribunal, work related to a legal practice) is carried out only by those who are properly qualified to do so. Secondly, the Act itself in section 17(1), imposes an obligation on legal practitioners to ensure that they do not have a lay associate of the law practice who is known to be a disqualified person (and that term is defined in section 4 to include persons who are prohibited from employment under section 18(2)). Sub-section 17(2) goes on to provide that:
"A contravention by a law practice of sub-section (1) is capable of being unsatisfactory professional conduct or professional misconduct on the part of a principal or legal practitioner associate of the law practice involved in the contravention."
19 The Tribunal notes these provisions and recommends to the Law Society that the effect of section 17, and the existence of the Law Society's register of orders under section 20(4) be drawn to the attention of its members.

Costs

20 In light of the evidence and submissions, there will be an order that the Respondent pay the costs of the Law Society.

Orders

21 No law practice may employ or pay the Respondent in connection with the legal practice engaged in by the law practice, without approval under section 17 of the Legal Profession Act 2004.

22 The Respondent pay the costs of the Law Society of and incidental to these proceedings, within 6 months of those costs being agreed or assessed.