Law Society of New South Wales v Bunyan

[1999] NSWADT 38

CITATION:	Law Society of New South Wales -v- Bunyan [1999] NSWADT 38
DIVISION:	Legal Services
APPLICANT:	The Council of the Law Society of New South Wales
RESPONDENT:	Bruce James Bunyan
FILE NUMBER:	992003
HEARING DATES:	04/27/1999
SUBMISSIONS CLOSED:	04/27/1999
DATE OF DECISION:	23 June 1999
BEFORE:	R J Clisdell Presiding Judicial Member J M Boland - Judicial Member L Bubniuk - Member
PRIMARY LEGISLATION:	Legal Profession Act 1987
APPLICATION:	Prescribed statutory/professional rules breach; Professional misconduct - solicitor ; Wrongful application of trust/controlled money or other valuable property -
MATTER FOR DECISION:	Principal matter
REPRESENTATION:	Applicant: D Hipsley of counsel instructed by R J Collins Respondent: T Williams, solicitor
ORDERS:	1. The Respondent's name be removed from the Roll of Legal Practitioners as at 27 April 1999. 2. The Respondent pay the agreed costs of the Applicant in the sum of $8,000.00. 3. The costs be paid within twelve months.

1 In these proceedings, the Law Society sought findings that Bruce James Bunyan, whilst practising as a Solicitor, was guilty of professional misconduct on the grounds that:

• The Solicitor acted in breach of Section 61 of the Legal Profession Act. (Mr & Mrs Tacca, Smith Estate, Howes Estate, Mr "Lee" and Ms Alexander).
• The Solicitor acted in breach of Section 62 of the Legal Profession Act. (Mr & Mrs Tacca, Symcopic, Benson, Mrs Mannik, Howes Estate, "Mr Lee" and Valentine).
• The Solicitor acted in breach of Regulation 11 of the Regulations to the Legal Profession Act. ("Mr Lee").
• The Solicitor acted in breach of Regulation 21 of the Regulations to the Legal Profession Act. (Mrs Mannik and "Mr Lee").
• The Solicitor acted in breach of Regulation 23 of the Regulations to the Legal Profession Act. (Mrs Mannik).
• The Solicitor acted in breach of Section 46 of the Legal Profession Act (Ms Alexander).
• The Solicitor misled or attempted to mislead Mr Napper, a Trust Account Inspector appointed by the Council of the Law Society of New South Wales. (Mr & Mrs Tacca; "Mr Lee" and Campbell, "Lee" & Symcopic).
• The Solicitor misled or attempted to mislead the Law Society. (Mrs Mannik, Scheibe and Symcopic).
• The Solicitor misled or attempted to mislead Jean Sayer, an investigator appointed pursuant to section 55 of the Legal Profession Act to investigate the affairs of the Solicitor and appointed receiver of the Solicitor's property by order of the Supreme Court of New South Wales pursuant to Section 92 of the Legal Profession Act. ("Mr Lee").
• The Solicitor forged the signatures of clients on a document which he, the Solicitor, had prepared. ("Mr Lee" and Mr Stratton)
• The Solicitor aided and abetted a client to hold funds in a false name. ("Mr Lee").
  

2 The Informant filed a number of Affidavits setting out their case against the Solicitor. These consisted of an Affidavit by Raymond John Collins, the Manager of the Professional Standards Division of the Law Society of NSW, Terrence Mark Copas, an Administration Officer, in the Inspection and Investigation Department of the Law Society of NSW, Garry Napper, a Trust Account Inspector employed by the Law Society of New South Wales, and Jean Sayer, a Chartered Accountant. Annexed to Jean Sayer's short Affidavit was a lengthy report dated 23 May 1995 in respect of enquiries made by Jean Sayer as a result of an investigation into the practice of the Solicitor. There was a second annexure to that Affidavit, being the report dated 11 December 1995, by Jean Sayer, following her appointment as receiver of the Solicitor's Practice.

3 The Solicitor did not put on any evidence, but annexed to Mr Collins' Affidavit was a letter from Mr Bunyan's Solicitors, Williams Witts, dated 30 January 1996 and a statement by the Solicitor, which was attached to that letter.

4 The final two paragraphs of the letter from Williams Witts to the Law Society state:

"We are further instructed to advise that Mr Bunyan accepts that the appropriate and only further course is that the Council of the Law Society should seek from the Legal Services Tribunal an order that our client's name be struck from the roll of Solicitors.

He does not seek to make any further submissions before the Society makes its determination, and will not oppose the asking of a striking off order."


5 Mr Bunyan appeared before the Tribunal on 27 April 1999 represented by Mr Williams. The position set out in the letter of Williams Witts dated 30 January 1996 was adhered to by the Solicitor and appropriate orders were made.

6 Mr Bunyan was admitted on 9 May 1980. He became a partner in the firm G J Gibbs & Associates on 1 July 1981. Both of his partners had retired by 1 June 1986 and from 1 July 1986, Mr Bunyan traded under the firm name of B J Bunyan & Associates.

7 Trust Account entries were recorded on a Kalamazoo system until November 1988 when a computer system was installed.

8 The Law Society sought findings of professional misconduct on eleven grounds which have been set out above. Grounds 1 to 5 essentially arise out of a conveyancing transaction in which the Solicitor acted for John and Elizabeth Tacca. In or about July 1981, the Taccas proposed to sell some land at Hume Highway, Casula. The Taccas granted to a purchaser an option on 17 July 1981, which would expire on 17 February 1982. The agreed purchase price was $121,212.00. The Purchaser was to pay any commission. The option was exercised on 16 February 1982. The sale involved the subdivision of land at Casula, with settlement to take place when the Plan of Subdivision was registered. No time limits were placed in the Contract for the Plan to be approved by Liverpool City Council, or indeed to be registered as a Deposited Plan. The option fee of $2,000.00 and a deposit of $10,212.00 paid on the exercise of the option were released to Mr and Mrs Tacca. The Solicitors for the Purchaser lodged a Caveat to protect the interest of the purchaser under the Contract.

9 On 3 March 1982, Mr and Mrs Tacca agreed to purchase two properties. In order to complete those purchases, they were relying on the proceeds of the sale of the land at Casula.

10 By May 1982, it became apparent that there would be delays in the Taccas' sale. As there was no time stipulated in the Contract, the Purchaser's Solicitors disputed that the Vendor had any right to rescind the Contract and indicated that if rescission was attempted, Court proceedings would follow.

11 The difficulties surrounding the subdivision had not been resolved by December 1982. Mr and Mrs Tacca were now under pressure to settle on the properties that they had purchased back in March. Mr Bunyan, in his Statement, says

"I was under enormous pressure from Mrs Tacca to get the money from the Purchaser of the Casula land so that she had the funds to settle her purchases.

I was in difficulty because, under the terms of the Contract I had prepared, I did not see that I could force settlement on to the Purchaser and rescinding the Contract would not give her the money she needed to settle on her purchases."

12 Later, Mr Bunyan says

"Under the pressure which was being applied by Mrs Tacca to get the money from the Purchaser to settle her purchases, I panicked.

I borrowed money equal to the balance of purchase money from clients of the practice named Osmond, and paid it to Mr and Mrs Tacca.

I did not tell Mr and Mrs Tacca that the money was borrowed.

I told them it was "A sign of good faith" advance payment by the Purchaser of the balance of the money under the Contract, although it had not yet been completed.

To this day, I do not know what made me take that action.

I have thought about it many times since as it became the start of a nightmare, which lasted thirteen years and destroyed my life.

All I can remember that I was in a blind panic under the pressure which was being applied to me to get Mrs Tacca the money so that she could settle her purchases."

13 From that point on Mr Bunyan consistently and wilfully breached Sections 61 and 62 of the Legal Profession Act. No proper documentation was kept of the loan moneys, which Mr Bunyan later acknowledged were borrowings for himself. As it was a loan from clients of the practice, he knew that he was in breach of Law Society guidelines on borrowing from clients and accordingly, could not show the transaction its true state. He had never told Mr and Mrs Tacca that the moneys that he had paid to them were actually a loan from clients of the practice. It was apparently Mr Bunyan's intention to pay the interest on the loan himself.

14 By July 1985, the subdivision had still not been finalised and settlement of the sale between the Taccas and their purchasers had not been completed. By that time, the Taccas were having discussions with the Land Commission of NSW about selling to them the remaining land at Casula. Mr Bunyan believed that the purchasers had assigned their Contract to the Land Commission of NSW. The land had increased a great deal in value. A proposal was put to the Taccas to sell the whole of the land direct to the Land Commission of NSW for $330,000.00, less the amount which had been paid pursuant to the earlier Contract. However, the purchaser had not assigned their interest and their Caveat remained on the title. With the increase in interest rates that occurred at this time, Mr Bunyan was no longer able to meet the interest on the various loans for the money he had given to the Taccas back in 1982.

15 Negotiations continued on for a number of years with the Land Commission of NSW and finally, Mr and Mrs Tacca, gave an option to purchase the whole of the land to a purchaser called Covington for $875,000.00. This option was granted on or about 7 May 1993. The Taccas were able to proceed to settle that sale because they had themselves attended the offices of the Solicitors for the original purchaser and obtained a Withdrawal of the Caveat lodged by those Solicitors back in 1982.

16 When settlement of that transaction took place, Mr Bunyan prepared a Statement which showed principal of $109,800.00 and accrued interest of $130,521.16 to be deducted to repay the advance made back in March 1982. Perhaps not surprisingly, Mr and Mrs Tacca disputed their obligation to repay the money. Mrs Tacca took the view that because she had obtained a Withdrawal of Caveat without paying any money, there was nothing that the original purchaser or Land Commission of NSW could do to recover the money they had paid in 1982 and that she intended to keep it. In accordance with those instructions, Mr Bunyan had no obligation but to pay the whole of the moneys to Mrs Tacca. This left him in the position of being in debt to clients of his firm for principal and interest of approximately $240,000.00.

17 For some time, Mr Bunyan had not been able to meet interest payments. Inevitably, the matter came to the attention of the Law Society. An investigator was appointed and following the investigation, Jean Sayer was appointed as Receiver.

18 At no time did Mr Bunyan ever register a Mortgage over the Taccas' property to secure the advances. The only Mortgage was in favour of the National Australia Bank and that was discharged on settlement in 1994. Because of the haphazard way in which Mr Bunyan was purporting to advance these various sums by way of a contributory Mortgage, it was difficult to trace all of the various contributors over the years. Indeed, Mrs Sayer in her reports notes that sufficient records were not available to enable her to properly investigate all of the loans and a number of records, including the file of the Tacca Mortgage, were said to have been destroyed.

19 What Mrs Sayer was able to reconstruct showed advances by the following investors:

• Mrs H Mannik - $67,850.00
• Mrs H Mannik - further loan replacing an advance from the Estate of F J Howes - $8,560.00.
• Symcopic Pty Ltd - $5,000.00
• Robert Lee replacing G Valentine - $24,024.82
• K Scheibe - $1,800.00
• P Benson - $1,400.00.
• Total advances - $108,634.82
• Of those sums, the only amount repaid was $1,400.00 to P Benson.


20 When Mr Bunyan was questioned by Ms Sayer about payment of interest and repayment of principal, Mr Bunyan replied "The interest was paid direct, I didn't want to be involved with Mortgages. They settled the repayment between themselves, I didn't act in the matter." When Ms Sayer wrote to Mr and Mrs Tacca seeking confirmation that they paid interest direct to the contributors, she received a reply from the Taccas' Accountant confirming that they had never borrowed any money and consequently had not made any interest payments nor principal repayments.

21 The Tribunal had no difficulty in determining that in respect of particulars 1 to 5, the Solicitor was clearly guilty of professional misconduct. The details of the various transactions as reconstructed by Ms Sayer, do not need to be repeated here.

22 Particular No. 6 arises out of the actions of Mr Bunyan in the matter of Alexander. This was a claim for personal injuries by Ms Jeanette Alexander, as Tutor for Michael Alexander. Mr Alexander received a grant of Legal Aid on or about 20 December 1978. The claim was ultimately settled in the sum of $140,000.00, inclusive of costs on or about 27 May 1994. Mr Bunyan received from the GIO the net amount of settlement moneys in the sum of $129,460.35 on or about 24 June 1994. On the same date, Mr Bunyan prepared a Bill of Costs which was rendered to the client in the sum of $41,490.72, consisting of $20,000.00 for profit costs and $21,490.72 for disbursements. All but the sum of $2,846.05 covering those disbursements had been paid by Legal Aid. Mr Bunyan immediately applied the sum of $20,000.00 to his office account. On 26 August 1994, the Legal Aid Commission advised Mr Bunyan that the amount payable pursuant to Section 46 to the Commission was $27,803.05. The sum was made up as follows:

23 To be retained by the Solicitor for costs and disbursements - $8,742.96 Payable to the Legal Aid Commission - $19,060.09

24 When accounting to Mr Alexander, Mr Bunyan had forwarded to him the sum of $92,000.00 from the amount received from the GIO of $129,460.35. Taking into account the amount which was payable under Section 46 of the Legal Aid Commission Act, namely $27, 803.05, the client should have received $101,657.30. Accordingly, there was a shortfall to the client. Ms Sayer's report goes on to detail that after taking into account the moneys that should have been paid to the Legal Aid Commission and the client, there was a shortfall in the Trust Account of $14,686.01, which had been transferred to Mr Bunyan's office account. The Solicitor had clearly breached the Legal Aid Commission Act and the Legal Profession Act. The Tribunal is satisfied that his actions in regard to the matter of Alexander amount to professional misconduct.

25 Particular 10 of the Information concerns the Solicitor forging signatures of clients on a document which he had prepared. The Solicitor had prepared or caused to be prepared a document entitled "Declaration of Trust" which was dated 23 January 1992. The signature was purportedly signed by a Mr Lee and Mr Stratton. The Solicitor admits that the signatures of Mr Lee and Mr Stratton were in fact put on the document by the Solicitor who then purported to witness those signatures.

26 The Tribunal has no difficulty in finding the Solicitor guilty of professional misconduct in respect of that Declaration of Trust.

27 The Law Society has also sought findings of professional misconduct in relation to several matters of misleading Law Society investigators, Trust Account inspectors and the Receiver. All of those allegations are admitted by the Solicitor. For example, in the course of the investigation, the Law Society received a letter from Mr Bunyan in respect of certain advances. In that letter, he said "In relation to the moneys held in the Advance Bank on behalf of Mannik, Symcopic and Scheibe, we would submit they are not controlled money as the Accounts can only be operated with the signatures of Mannik, Symcopic and Scheibe respectively"

28 Ms Sayer was able to establish that the Solicitor was the sole signatory on those accounts.

29 The Solicitor also misled Mr Napper as to the identity of "Mr Lee". Mr Lee was in fact a Mr Jack Gard. The Solicitor told Mr Napper that Mr Lee lived in Queensland and was a friend of Mrs Gard. The Solicitor also accepts in relation to "Mr Lee" that he opened an account in the IMB Building Society for Mr Lee knowing that that was a fictitious name used by Jack Gard.

30 In respect of each of these matters, the Tribunal makes finding of professional misconduct.

31 Given the nature of the various matters that came to the attention of the Law Society and which have been detailed in Ms Sayer's two reports, it was clear that the Tribunal would, in order to protect the public, have to make the orders which it has made. With the exception of the matter of Alexander, where Mr Bunyan transferred moneys which were not properly payable to him to his office account, he did not profit from any of the other matters which are brought in before the Tribunal. He accepted at an early date that his name must be removed from the roll of Legal Practitioners.

32 Although Mr Bunyan has not been practising since 1995 when his Practising Certificate was initially cancelled following Ms Sayer's appointment as Receiver, the Tribunal is concerned by the delay in this matter reaching the Tribunal. No satisfactory explanation was advanced by the Law Society on the hearing of the matter for the delay. In circumstances where Mr Bunyan had accepted that it was inevitable he would be "struck off" and had made a submission to the Society that he would not oppose the making of such an order, it seems extraordinary that the Society did not seek to bring the matter before the Tribunal for a period of some three years. It is to be hoped there will not be a similar delay in the future.

Last Updated: 07/01/1999