Law Society of New South Wales v Bykowski
[2002] NSWADT 165
•09/20/2002
CITATION: Law Society of New South Wales -v- Bykowski [2002] NSWADT 165 DIVISION: Legal Services Division PARTIES: APPLICANT
Council of the Law Society of New South Wales
RESPONDENT
Joseph BykowskiFILE NUMBER: 002005 HEARING DATES: 19-20/07/01, 23-24/07/01, 19-20/09/01, 18-20/02/02 SUBMISSIONS CLOSED: 05/20/2002 DATE OF DECISION:
09/20/2002BEFORE: Brennan JWF - Judicial Member; Greenwood J - Judicial Member; Costigan M - Member APPLICATION: Professional Misconduct - act in a conflict of interest - Professional Misconduct - breach of s. 61 of the Legal Profession Act - Professional Misconduct - fail to account - Professional Misconduct - fail to attend court - Professional Misconduct - fail to carry out instructions - Professional Misconduct - fail to communicate - Professional Misconduct - fail to keep accounts - Professional Misconduct - fail to pay third party - Professional Misconduct - gross negligence and delay/gross delay/delay - Professional Misconduct - inadequate advice to client - Professional Misconduct - lack of candour to Court - Professional Misconduct - lack of diligent representation - Professional Misconduct - loss of documents - Professional Misconduct - mislead client - Professional Misconduct - mislead Law Society/Bar Association/LSC - Professional Misconduct - mislead third party - Professional Misconduct - non compliance with clause 7 of Legal Profession Regulation 1988 - Professional Misconduct - overcharge - Professional Misconduct - transfer money without authority - Unsatisfactory Professional Conduct - conduct below expected standards of competence and diligence MATTER FOR DECISION: Principal matter LEGISLATION CITED: Legal Profession Act 1987 CASES CITED: Allinson -v- The General Council of Medical Education and Registration (1894) 1QB750
Re Michael Radin 1996 LPDR1
Re Veron; Ex parte Law Society of NSW (1966) 84WN136
Kennedy -v- The Council of the Incorporated Law Institute of New South Wales 1940 13ALJRREPRESENTATION: APPLICANT
I Wales SC, barrister
RESPONDENT
J Loxton, barristerORDERS: 1. That the Respondent is guilty of professional misconduct and unsatisfactory professional conduct.; 2. That the name of the Respondent Joseph Bykowski be removed from the Roll of Legal Practitioners.; 3. That the Respondent pay the Applicant Society’s costs of and incidental to these proceedings.
Complaint
1 By amended information filed 4 August 2000 the Council of the Law Society of New South Wales (“the Council”) informed the Tribunal that following investigation of complaints made against the Respondent Joseph Bykowski (“the solicitor”) the Council claimed that the solicitor is guilty of professional misconduct or unsatisfactory professional conduct.
2 Ultimately there were twenty five grounds of complaint which the Society claimed constituted professional misconduct and one ground which the Society claimed constituted unsatisfactory professional conduct. The particulars of complaint detailed the facts and events relating to the conduct of matters undertaken for twenty six individual clients together with five other matters dealt with in detail in these reasons, including failing to comply with an undertaking given to the Professional Standards Board and failure to comply with the orders of that Board.
3 The Respondent filed a reply in which he referred to the various allegations in an annexure and responded to each as at that time “not admitted”.
4 Initially in the proceedings the Respondent appeared in person but in the latter stages was represented by Mr James Loxton of Counsel and the Tribunal is grateful for the assistance which was provided to the Tribunal and to the Respondent by Mr Loxton. The matter was adjourned more than once so that the Respondent might file a detailed Affidavit addressing the complaints and the allegations particularised against him. He did not file any Affidavit material from former clients or other legal practitioners but he did give evidence at the hearing and was cross-examined.
Background
5 The Solicitor was admitted to practice on 3 May 1985. He practised initially in Thirroul and then appears to have purchased the practice in which he had been employed in that town. Subsequently, in about 1988 he took over the practice of another solicitor, Mr Mitry at Burwood.
6 There were five complaints against the solicitor which were dealt with and concluded by the Legal Profession Standards Board on 25 February 1991. Mr Bykowski was represented in those proceedings and provided a Statutory Declaration which contained appropriate admissions and generally appeared to co-operate in the process. Those complaints were resolved by undertakings given by the solicitor and in orders made by the Board in relation to conduct of his practice which are referred to later by the Tribunal.
7 On 11 July 1994 the Society appointed Thomas Arthur Williams as investigator of the affairs of the solicitor pursuant to Section 55 of the Legal Profession Act 1987 (“the Act”) and on 28 April 1995 Jean Sayer, Chartered Accountant, was appointed receiver of the practice of the solicitor pursuant to Section 97 of the Act by the Supreme Court of New South Wales. Complaints were made and investigated and it was admitted proper procedural steps to enable the information to be filed with the Tribunal were all taken by the Society, so there was no jurisdictional issue.
8 A significant part of the evidence in this matter was contained in an Affidavit from the investigator, Mr. Williams, which annexed four reports and a large number of documents. The Affidavit was admitted into evidence by consent.
9 There were a number of breaches of Sections 61 and 62 of the Act alleged against the solicitor. The terms of those Sections are as follows:
10 There are also various breaches of Clause 7 of the 1988 Regulation particularised. That Regulation reads as follows:
“61. Money received by solicitor on behalf of another:
(1) A solicitor who, in the course of practising as a solicitor in this State, receives money on behalf of another person:
(2) In any of those three cases, the solicitor must hold the money exclusively for, and must disburse the money in accordance with the directions of, the person on whose behalf it is held.
(a) must pay the money, within the time prescribed by the regulations, into a general trust account in New South Wales at an approved financial institution and must hold the money in accordance with the regulations relating to trust money, or
(b) if the person on whose behalf the money is received directs that it be paid or delivered to a third party free of the solicitor’s control, must ensure that the money is paid or delivered:
(i) before the end of the next working day or, if that is not practicable, as soon as practicable after the next working day, or
(ii) no later than the day allowed by the solicitor’s authority or instructions (if that day is later than the day allowed under subparagraph (i)), or
(c) if the person on whose behalf the money is received directs that it be paid otherwise than into a general trust account or to a third party, must pay the money as directed and (if the money is to be held under the direct or indirect control of the solicitor) must hold the money in accordance with the regulations relating to controlled money.
(3) This section:
(4) A lien referred to in subsection (3) (d):
(a) does not prevent a solicitor from depositing money with the Law Society in compliance with section 64, but this section continues to apply to any money so deposited that is repaid to the solicitor, and
(b) does not prevent a solicitor from withdrawing or receiving, from trust money or controlled money:
(i) reimbursement for disbursements paid by the solicitor, or
(ii) money for disbursements to be paid by the solicitor, or
(iii) money due, or to accrue due, to the solicitor for costs, so long as the procedure prescribed by the regulations is followed, and
(c) does not affect any enforceable lien or claim that a solicitor has to any money, and
(d) does not prevent a solicitor from exercising a general retaining lien for unpaid costs and disbursements in respect of money in a trust account or a controlled money account (other than money received subject to an express direction by the client with respect to the purposes for which the money is to be applied), and
(e) does not prevent a solicitor from holding, or disposing of, a cheque or other negotiable instrument payable to a third party if the solicitor does so on behalf of a client and in accordance with directions given by the client, and
(f) does not affect an authority that a solicitor has and that, apart from this section, is irrevocable.
(5) Money received by a solicitor on behalf of another person:
(a) may not be exercised for an amount in excess of the sum of the costs and disbursements unpaid, and
(b) may not be exercised unless the solicitor has delivered a bill of costs and disbursements to the client on whose behalf the money is held.
unless the creditor is the person on whose behalf the money is held by the solicitor.
(a) is not available for payment to a creditor of the solicitor, and
(b) is not liable to be taken in execution of any judgment, order or other process of any court or tribunal at the instance of a creditor of the solicitor,
(6) If a Crown Solicitor’s Trust Account is established as prescribed by the regulations, this section applies to money received by the Crown Solicitor from a person for whom, or a body for which, the Crown Solicitor acts.
(7) if a trust account kept by a solicitor is, as authorised by or under the regulations, operated on by a person other than the solicitor, section 53 of the Trustee Act 1925 does not apply to the person in relation to the operation on the trust account.
(8) It is professional misconduct for a solicitor to wilfully contravene subsection (1) or (2).
(9) In this section:
(10) A reference in subsection (1) to a third party does not include a reference to an associate of a solicitor.
approved financial institution means a bank, building society or credit union that has an agreement with the trustees of the Public Purpose Fund relating to the payment of interest on general trust accounts (as referred to in section 69E)
controlled money means money required to be dealt with in accordance with subsection (1)© that, while under the direct or indirect control of the solicitor by whom or on whose behalf it is received, is for the time being held otherwise than in a general trust account at an approved financial institution.
trust money means money required to be dealt with in accordance with subsection (1) (a).
62. Keeping of accounts.
(1) A solicitor shall keep:
(2) The accounting records referred to in subsection (1) shall be kept in a manner that enables them to be conveniently and properly audited.
(a) in the case of trust money (within the meaning of Section 61 ) accounting records, or
(b) in the case of money other than trust money such accounting records or other records (if any) as may be required by the regulations, that disclose at all times the true position in relation to money received by the solicitor on behalf of another person.
(3) Without limiting the generality of subsection (2), the accounting records referred to in subsection (1) shall, if the regulations so require, be kept in such manner as the regulations prescribe.
(4) A wilful contravention of subsection (1), (2) or (3) is professional misconduct.”
11 There is in the Act a non-exclusive definition of professional misconduct and unsatisfactory professional conduct in the following terms:
“7(1) A solicitor who is required to maintain a trust ledger or a controlled money ledger shall furnish to each person for whom, or on whose behalf money is held or controlled by the solicitor, a separate statement of account in respect of each ledger account maintained for the person.
(2) A statement of account shall be furnished under subclause (1) as soon as practicable after –
(3) A solicitor is not required to furnish a statement of account under subclause 2(d) if at the relevant day –
(a) the solicitor receives a written request for the statement;
(b) completion of the matter to which the ledger account relates;
(c) the closure and removal of the account from the relevant ledger; and
(d) except as provided by subclause (3) – 31 March and 30 September in each year.
(4) person for whom, or on whose behalf, money is held or controlled by a solicitor –
(a) the account has been open for less than 6 months;
(b) the balance of the account is zero and no transaction affecting the account has taken place within the last preceding 6 months;
(c) statement of account has been furnished within the last preceding 6 months and there has been no subsequent transaction affecting the account; or
(d) the solicitor has received a notice under subclause (4) waiving compliance with the requirement and has not received notice of revocation of the waiver.
(5) The statement of account shall contain particulars of –
(a) may, by written notice to the solicitor in accordance with Form 2, waive compliance by the solicitor with the requirements of subclause (2)(d); and
(b) may, by written notice to the solicitor, revoke the waiver.
(6) A solicitor shall retain a copy of a statement of account with the file to which it relates.”
(a) the money received and held or controlled by the solicitor for or on behalf of the person in the course of the solicitor’s practice;
(b) the disbursement of the money; and
(c) the remaining balance of the money, and shall identify the transactions to which the particulars relate.
12 Apart from the non-exhaustive definition of professional misconduct in the Act the Common Law test still applies. The test formulated by Lopes LJ in Allinson –v- The General Council of Medical Education and Registration (1894) 1QB750 at 763) in a medical case which has since been approved as a test of professional misconduct by legal practitioners has for good reason been long accepted:
”127(1)For the purposes of this Part, “professional misconduct” includes:
(2) For the purposes of this Part;
(a) unsatisfactory professional conduct, where the conduct is such that it involves a substantial or consistent failure to reach reasonable standards of competence and diligence; or
(b) conduct (whether consisting of an act or omission) occurring otherwise than in connection with the practice of law which, if established, would justify a finding that a legal practitioner is not of good fame and character or is not a fit and proper person to remain on the roll of legal practitioners; or
(b1) conduct (whether consisting of an act or omission) occurring otherwise than in connection with the practice of law which, if established, would justify a finding that an interstate legal practitioner is not of good fame or character or is not a fit and proper person to remain on the roll in the practitioner’s home State that corresponds to the roll of legal practitioners, or
(c) conduct that is declared to be professional misconduct by any provision of this Act.
(3) Maintenance or champerty by a legal practitioner or interstate legal practitioner (except in connection with a conditional costs agreement under Part 11) may constitute professional misconduct despite the Maintenance and Champerty Abolition Act 1993.
“unsatisfactory professional conduct” includes conduct (whether consisting of an act or omission) 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 legal practitioner or interstate legal practitioner.
A. Mohammed Faraj
”It is important to consider what is meant by ‘infamous conduct in a professional sense’. The Master of the Rolls has adopted the definition which, with his assistance and that of my brother Davey, I prepared. I will read it again:
’If it is shown that a medical man, in the pursuit of his profession, has done something with regard to it which would be reasonably regarded as disgraceful or dishonourable by his professional brethren of good repute and competency’ then it is open to the General Medical Council to say that he has been guilty of ‘infamous conduct in a professional respect’.”
13 The grounds of complaint in relation to this client were:
14 The evidence from Mr. Williams’ first report was that the sum of $500 was paid to the Trust account of Bykowski & Co in early 1988 and that sum was on 7 June 1990 transferred from the Trust account to the General Account of the firm. The only activity on the file in that two year period was a letter from Mr. Bykowski to a Consultant, Mr. Hegarty, who had referred the client to the original practice of Mitry Walker. The file was transferred to Mr Bykowski from Mitry Walker. Mr. Williams reported [complaints i. and v.] that there was no account rendered to the client by Mr. Bykowski, nor was there any communication between him and the client, nor evidence of any work done by Mr. Bykowski, other than the letter to Mr. Hegarty. A copy of the Trust account ledger was produced. This showed the deposit of $500 in May 1988 and the transfer out of the Trust account of that sum to the general account of the solicitor in June 1990, the payment being described “to Bykowski & Co (C&D in full)”. [complaint ii.]
i. Transfer of moneys without authority;
ii. Breach of Section 61(2) of the Act;
iii. Non-compliance with Clause 7 of the 1988 Regulation;
iv. Failure to keep adequate accounting records;
v. Failure to account.
15 In his evidence Mr Bykowski stated that an account was prepared and sent to Mr Faraj. He said:
16 Having weighed the matter carefully, and taking into account the whole of the evidence, the Tribunal does not accept the solicitor’s evidence that some unidentified Trust Account Inspector gave him the totally inappropriate advice upon which the solicitor sought to rely. Indeed, in any event, the solicitor’s obligations are clear on all these matters and if it were that he had received some wrong advice from some person in authority in relation to the conduct of his Trust Account that wrong advice might be considered in mitigation, but would not in any way affect the nature of the conduct of the solicitor. In relation to the $500 involved, the moneys were transferred in circumstances where the solicitor had no entitlement whatever to receive the moneys himself. The solicitor was in breach of the Act in that he transferred moneys, not only without authority, but without any entitlement on the evidence to receive the moneys or any part of them. The breach of S61(2) was a wilful act. He has failed to account to Mr Faraj for the moneys.
”It was my practice to always render accounts and my recollection was that was one where Mitry had money in Trust which was then transferred to me and on , I think the second Trust inspection, the Trust Inspector told me to render accounts on all these ones I took over from Mitry and after 30 days to transfer to General and that’s what I did.”
This explanation is similar to the solicitor’s evidence on a number of matters where sums of money standing to the credit of the Trust account were transferred to the solicitor’s General account, without there being any account to the client. Indeed, Mr Williams’ report is clear that there is nothing in the file to indicate that work was done to justify a charge and no evidence of any disbursements. There is no evidence in the solicitor’s file of the required statements being sent to the client, although the moneys remained in the Trust Account for about 2 years. [complaint iii.]
17 The solicitor gave evidence that at some time before his records were inspected he did keep in the individual matter files copies of the statements required under regulation 7. He also asserted that additional copies were kept in a separate folder which was maintained as part of his accounting records. The Tribunal accepts there had been compliance at some time in the past. The solicitor’s evidence is that that system “fell into disuse after some time”. Initially there was in support evidence to enable the Tribunal to make a finding against the solicitor on the fourth count and the solicitor’s own evidence only confirms that other evidence. The solicitor acknowledges that transfer to himself without an account was “inappropriate”. The solicitor sought in his oral evidence to explain that Mr Williams was mistaken in his report but in the context of the issue having previously been raised over the period that elapsed from the date of Mr Williams’ report, the solicitor’s acceptance of the Affidavit to which the report was annexed (subject only to objection to matters in the report that were not the subject of complaint which the solicitor described as “some hearsay evidence in Mr Williams’ Affidavit”) the solicitor chose not to test or challenge the matter, cross-examine Mr Williams, nor raise any issue on the matter until he gave his evidence during the hearing. Each of the grounds of complaint in relation to this solicitor’s dealing with the client, Faraj, is established.
18 In relation to the solicitor’s acting for Mohammed Faraj and subsequently in relation to the various complaints that have been made against the solicitor the Tribunal has considered and applied the statutory provisions and the common law test in making its findings on the numerous allegations based on the evidence before it in this matter.
19 The Tribunal finds that the conduct established in relation to the solicitor’s actions, while acting for Mr Faraj, constitute professional misconduct both in terms of the common law meaning of the term and in its non-exclusive statutory definition.
B. Roger Kochowiec
20 The late Mr. Kochowiec was a solicitor who undertook work at the request of Mr. Bykowski in a number of compensation matters and his work appears to have been carried out on a time basis for which he rendered accounts to Mr. Bykowski. The grounds of complaint were:
21 The Council relied upon material in the first report by Mr. Williams , material contained in and annexed to an Affidavit by Elizabeth Tomlinson, a solicitor employed in the Professional Standards Department of the Society. The report detailed the arrangement between Messrs Bykowski and Kochowiec for payment of Mr. Kochowiec’s fees upon the particular matter being completed. The Society’s inspector sought access to a large number of files which were the subject of claims for payment by Mr. Kochowiec and the evidence established amongst other things that the solicitor did not have an adequate system for retaining and maintaining files so the files appeared very readily to become lost and could not be located.
i. Misleading or endeavouring to mislead the Law Society;
ii. Breach of Section 61(2) of the Act;
iii. Non-compliance with Clause 7 of the Regulation;
iv. Failure to keep adequate accounting records;
v. Unsatisfactory professional conduct involving a substantial or consistent failure to reach reasonable standards of competence and diligence.
22 The matter of Archi was a matter in which clear evidence was available. Mr. Kochowiec complained to the Society on 3 December 1992 and provided a list of documents including a statement of moneys outstanding by Mr. Bykowski as at 15 May 1992 which included a sum of $736.75 in the Achi proceedings. In response to an inquiry from the Society, Mr. Bykowski in a letter of 27 October 1993 advised that he had paid all moneys pursuant to his agreement to Mr. Kochowiec and that “the other matters not paid to Mr. Kochowiec had been withheld as they are outstanding”. The issue is further clouded by Mr. Bykowski’s assertion in that letter that he had acted for Mr. Kochowiec as plaintiff in a matter “and the arrangement was that our fees in this matter would be offset against other matters outstanding”. Ms Tomlinson indicates that Mr. Bykowski did not add to his offset explanation when she attended his office.
23 In relation to the first complaint, on 16 July 1993, Mr. Bykowski in a letter to the Society advised that the Achi matter had been settled and that he was trying to locate the file and made reference to having just almost completed his move from Thirroul to Corrimal, where old files were stored, with an implication this was causing delay. Mr. Williams’ report and the Trust ledger show that Mr. Bykowski was paid in full at completion of the matter on 14 June 1991. The final payment of the balance of moneys due to Mr. Kochowiec was not made by Mr. Bykowski until 20 April 1994. The Tribunal finds that the evidence established that the solicitor endeavoured to mislead the Society.
24 The Society relied upon the solicitor’s inability to locate a number of files as constituting the final ground of complaint in relation to Mr Kochowiec, [complaint v.] There are a number of serious issues particularised by the Society and established by the evidence. The solicitor did not respond to these matters in his oral evidence or otherwise. The solicitor failed to maintain accounting records for his Trust Account that disclosed at all times the true position in relation to the moneys he held on behalf of Mr Kochowiec. In the context of his endeavouring to mislead the Society in relation to this matter the Tribunal was satisfied that the breach of S62(1) was intentional and so wilful as was the breach of S62(2) in that he failed to maintain records that could be properly audited [complaint ii]. There were no copy statements and no evidence to suggest that Clause 7 had been satisfied [complaint iii.] and clearly his account records were not adequate [complaint iv]. The Tribunal is satisfied that each of the grounds of complaint has made been made in relation to the matters concerning Mr Kochowiec.
25 The breaches of Sections 62(1) and 61(2) are established and were wilful. The Tribunal finds that the evidence justifies a finding of professional misconduct under S62(4). The first, third and fourth grounds have been established and together they satisfy the Tribunal that his conduct in relation to this client constituted professional misconduct. The evidence satisfies the Tribunal that the fifth ground has been made out by the evidence of the lack of systems and accountability and it constitutes unsatisfactory professional misconduct.
C. Messrs N & P Harb
26 Noel and Peter Harb instructed the solicitor to act on the purchase of a take away food business conducted in leased premises. The grounds of complaint are:
27 The evidence provided by the Council was contained in the first report of Mr. Williams, together with documentation in relation to the transaction. This showed that the agreement for purchase was dated 3 May 1992 and the agreement appeared to be completed about two months later. The lessor required a Deed of Consent to the transfer of the lease to be signed, together with personal guarantees from the purchasers’ parents. A Deed of Consent forwarded by the solicitor was rejected by the lessor’s solicitors as this had not been signed by one of the parties and it was pointed out to the solicitor that his clients would not be acknowledged as lessees until there had been a proper assignment.
i. Failure to carry out instructions;
ii. Inadequate advice to clients;
iii. Delay;
iv. Loss of documents;
v. Unsatisfactory professional conduct involving a substantial or consistent failure to reach reasonable standards of competence and diligence.
28 There was considerable correspondence over a period of about ten months after settlement until the solicitor ultimately returned the Deed of Consent duly signed but unstamped on about 5 March 1993. About that time other solicitors received instructions from Messrs Harb to act on the resale of the business. It was clear that the agreement for sale of business had not been stamped and that there was no signed transfer of lease in the solicitor’s file. In consequence of this, the clients complained to the Society of having to pay by way of additional stamp duty a late payment penalty of $1,115.00.
29 The evidence in relation to loss of documents appears to be limited to a statement in a letter from the solicitors who took over the file dated 31 August 1993 in these terms:
30 There is no mention of stamp duty and there is no evidence in the correspondence or documentation which would suggest that the solicitor sought to arrange payment of stamp duty. It is clear from the documentation that the matter was completed but that the tenure which the assignment of lease would have achieved was not obtained. The material in the file not only failed to disclose any suggestion of a transfer of lease being prepared but also did not contain any evidence of any searches or inquiries appropriate to the purchase of a business having been made or of any accounting.
“On 23 March 1993 we then contacted Mr. Bykowski’s office on three separate occasions. We were only able to talk to Mr. Bykowski’s secretary, who stated that ‘they were trying to find the file’.”
The Tribunal is not satisfied that this is sufficient evidence to base a finding adverse to the solicitor and this ground of complaint is dismissed.
31 In his evidence, Mr Bykowski acknowledged that there had been substantial delay in attending to his obligations. He did recall on cross-examination having explained the stamp duty requirements to his clients. His clients had incurred a substantial fine which the solicitor blamed upon his clients for failing to come in to see him to complete the documentation. In his evidence in chief the solicitor acknowledged that the matter had “Sort of slipped out of my grasp” and indicated that, with hindsight, he would have dealt with the matter differently. The documentation and the matters raised in the report were overwhelming and the Tribunal was satisfied that the remaining four grounds of complaints have been established.
32 The first and second grounds cover the solicitor’s overall mishandling of the file and his failure to take obvious steps to carry out his instructions, to give adequate advice to his clients and to protect their interests. The Tribunal finds that the facts established in relation to grounds (i) and (ii) constitute professional misconduct.
33 In addition, the Tribunal finds that the delay established amounts to a very serious case of unsatisfactory professional conduct as, indeed, does the solicitor’s failure to reach reasonable standards of competence and diligence which have clearly been established in relation to these clients.
D. Darren Findell
34 Mr. Findell retained the solicitor to act for him in relation to a motor vehicle personal injury claim. The grounds of complaint were:
35 The Council relied upon the first report of Mr. Williams and the documents annexed and exhibited to it together with the Affidavits of Darren Findell and Kevin Rowlands.
i. Failure to carry out instructions;
ii. Delay;
iii. Misleading the client;
iv. Failure to attend Court;
v. Failure to communicate;
vi. Misleading or endeavouring to mislead the Law Society;
vii. Lack of diligent representation;
viii Lack of candour to Court;
ix. Acting in a conflict of interest;
x. Unsatisfactory professional conduct involving a substantial or consistent failure to reach reasonable standards of competence and diligence.
36 The evidence established that Mr. Findell was injured in a motor vehicle accident in August 1988 and retained the solicitor that same month. The solicitor had a second consultation with the client in January 1989 and from the chronology from the file prepared by Mr. Williams there were various attendances over the ensuing twelve months.
37 The solicitor forwarded a claim form to the GIO with his letter dated 5 February 1990 and received two replies dated 16 and 20 February 1990. The solicitor replied to the letter of 20 February on 17 April 1990. The reply explains the delay in lodgment of the notice of claim in terms that “our client did not realise that he had a claim as when the injury was originally sustained by him, he was not certain that he was entitled to lodge any claim whatsoever.” This explanation is not consistent with the chronology of the solicitor’s file, detailed by Mr. Williams. The chronology also shows that the solicitor, also on 17 April, took action to obtain the medical certificate and certificate of earnings that had been requested about two months earlier by the GIO.
38 The solicitor’s delay continued and a reminder letter from the GIO of 14 May 1990 did not produce a response and the next activity was an isolated conference with the client on 1 December 1990 followed by yet a further request from the GIO for a full and satisfactory explanation of the delay on 9 July 1991 which produced a formal acknowledgment on the basis that the solicitor was currently obtaining instructions.
39 A letter from GIO of 8 August 1991 inquiring as to when Mr. Findell actually contacted the solicitor did not produce any response, although the chronology and diary notes indicate that the solicitor spoke with the client on 22 and 23 August 1991, initially advising “I will look into it and get back to him as soon as possible” and on the following day “we are still waiting to hear from GIO”.
40 The file chronology shows no action on the file by the solicitor for twenty three months, although, clearly, he delivered his file of papers to Mr. Stevens of Counsel some time before 26 July 1993 when Mr. Stevens wrote to the solicitor. The letter and advice contained a number of significant statements, including:
41 Both Mr. Findell and Mr. Rowlands deposed to having met with the solicitor in July 1993 after the client had not heard from the solicitor for about two years. Both depose to the solicitor stating “Mr. Findell’s file was mislaid when I moved my office.” The conference is not mentioned in the chronology prepared from the file by Mr. Williams and it is an inevitable conclusion that the “missing” file was, from the terms of Counsel’s letter, with Mr. Frank Stevens of Counsel in July 1993, though whether this was before or after the meeting between the solicitor and Messrs Findell and Rowlands, the Tribunal cannot say. There is nothing to suggest that Counsel’s advice to the solicitor in relation to his obligations was conveyed to the plaintiff despite there being evidence from both affidavits that the solicitor would write to the client in two weeks. A letter from Mr. Rowlands on 14 September 1993 drew no response from the solicitor who declined, on 12 October 1993 to provide information in the telephone conversation unless provided with written consent from Mr. Findell.
”As three years has now transpired since the date of the accident, it seems as though, in the circumstances, that the plaintiff has foregone his rights under the Motor Accidents Act.”
”I do not believe there is any way that the failure to take this cause to fruition within the statutory time can be satisfactorily explained.”
”In short, I believe that my instructing solicitor should face up to his responsibilities and so inform the client, advising him to seek other advice.”
“I trust that my instructing solicitor will be in accord with the above suggestions.”
42 However, in this context, the solicitor on 31 August 1993 filed in the District Court a Notice of Motion for Extension of Time under Section 52 of the Motor Accident Act with a supporting Affidavit which the solicitor swore on that date. The investigator’s report indicates that the Notice of Motion was not served until 11 February 1994. It is not apparent whether any action was taken on that Notice of Motion and Affidavit. The Motion was listed on 5 October 1993. Following the complaint to the Society by Mr. Rowlands on behalf of Mr. Findell the Society wrote to the solicitor on 30 December 1993. The solicitor prepared a fresh Affidavit seeking extension of time and a fresh Notice of Motion, returnable 14 February 1994. The affidavit appears to be sworn on or about 28 November 1993 though the date on which these documents were filed in the District Court is not clear.
43 The Affidavit does not mention any loss of the file and the absence of the appropriate activity by the solicitor between August 1991 and July 1993 nor the failure of the solicitor to contact the client between 23 August 1988 and 11 January 1989. In addition, it further makes no reference to Counsel’s advice when it might fairly be said that the solicitor’s own lack of action had necessitated the application.
44 The evidence is clear that there was no response by the solicitor to the complaint letter of the Society of 30 December 1993 until a reminder letter was sent on 15 March 1994 to which the solicitor replied by phone and letter on 16 March 1994. The notation of the solicitor’s call on the copy of the Society’s letter is in terms:
45 Mr. Findell’s evidence is in terms that shortly before Christmas 1993 the solicitor called him and advised “I have found your file and I am investigating the progress of your claim”. The client’s evidence is that he had no notice of the matter being in Court on 16 March 1994, when the evidence is that the matter was adjourned to 28 April 1994. There is no suggestion that in a conversation on 16 March 1994 the solicitor informed the Society that the matter had been in Court or was in Court that day nor was any notice of listing given to Mr. Findell. The solicitor’s letter to the Society of 16 March stated inter alia:
“Mr. Bykowski rang. He said he has made contact with his client subsequent to the accountant’s complaint to the Society. The client is happy enough the matter is back on track.”
46 The letter of 16 March 1994, although almost two pages in length, ignores a number of matters. It does not mention that the Notice of Motion was not served until 11 February and the Affidavit in Support was not served until 15 March 1994. In light of the GIO’s prior correspondence, it is hard to see how the application could then be described as “relatively procedural”. Indeed, the solicitor already had Counsel’s advice that the client had probably in all the circumstances foregone his rights. The solicitor was clearly aware that the Court required an Affidavit from the client yet the solicitor makes it clear to the Society that he had not spoken with his client since 1 December 1993 when he writes on the day before the listing where his client’s attendance and affidavit are needed.
i. ”It was unfortunate Mr. Findell’s file was mislaid for a while. Mr. Findell contacted us some time ago though a considerable period of time lapsed before we located his file.”
ii. ”The file was subsequently located late last year and action was taken pursuant to Sections 42 and 52 under the Motor Accidents Act which are relatively procedural matters to have extensions of time obtained to file the documents required under this Act.”
iii. ”An Affidavit was prepared in August 1993 and the matter was subsequently listed by Notice of Motion. The matter came before His Honour Judge McLachlan. There was no appearance by the GIO on several occasions. Subsequently His Honour indicated that he would like to see an Affidavit from the Plaintiff adverting to certain matters.”
iv. “By way of further explanation we advise that we had a lengthy telephone conversation with our client just prior to Christmas 1993. This was the last conversation we had with him wherein we advised him of the present position in this matter and he indicated his satisfaction that progress was being made.”
v. “On or about the time Mr. Rowland made the initial complaint, we had spoken several times to Mr. Darren Findell and, as indicated above, the last such occasion was 1 December 1993.”
vi. ”We are presently waiting for Mr. Findell to contact us as this matter comes before His Honour on 17 March 1993.”
47 Indeed, the conversation between the solicitor and the representative of the Society on 16 March is most significant in view of the complaint and that significance is more in what is not said, though what is said is perhaps bad enough. The evidence is clear that there had been no contact between the solicitor and the client and the matter was listed for the following day with the client unaware of the listing.
48 On 2 May 1994 the solicitor wrote again to the Society and his letter contained advice, including:
49 Clearly on the evidence this letter is simply not correct as the file was clearly available for inspection by Mr. Stephens of Counsel in July 1993. Given the circumstances of the referral of the file to Counsel and the nature of advice Counsel gave, the statement as to the date the file was found by the solicitor is significant.
i. “We do not recall how long the file was mislaid, but it appears to be for approximately two years”.
ii. “It was found shortly before 31 August 1993. The file was found bound up with another file in the completed section. The file appeared to have been mislaid between the time of our last inquiry in April 1991 and August 1993.”
iii. “We do not know how the file was mislaid but it had been wrapped up with another file and both files had been put away at the same time.”
50 The adjourned Notice of Motion in the District Court was listed on 28 April 1994 and the client attended a conference with a barrister the preceding day. On the listing, the client attended with Counsel and the solicitor. Mr. Findell deposes to the matter then being adjourned to 17 June and that “the presiding judicial officer requested an affidavit be filed in relation to my claim”. The solicitor’s file note confirms the adjournment and notes:
51 This, indeed, was consistent with Mr Stevens’ written advice of 26 July 1993.
”Frank Stevens of Counsel indicated client was advised that he should seek other independent advice in view of the nature of the disclosures he had made in the previous afternoon. Counsel advised the Court that he felt that this would be appropriate and the client indicated that he was happy with this development”.
The solicitor’s diary note of the conference the previous day states:
“Counsel felt it appropriate that client should obtain independent legal advice and client indicated that he had sought other advice in February 1993 but did not elaborate on the nature of this advice.”
52 However, the diary note then continues and suggests a different issue:
53 No affidavit was prepared by the solicitor, as requested by the Court on 28 April 1994. Mr. Rowlands’ evidence is quite clear that he phoned the solicitor’s office on the day before the next hearing. The solicitor was unavailable to take the call and his secretary was asked whether the solicitor would be attending the hearing of the motion on the following day. Mr. Rowlands was informed that, as far as the secretary knew, the solicitor was aware of the hearing and would be attending. Although Mr. Rowlands requested the solicitor phone him back, no call was received and the solicitor did not attend the hearing, so that the client was unrepresented. No doubt fortunately, Mr. Findell appeared and, with the assistance of a representative of the Government Insurance Office, secured a further adjournment, during which time he arranged for the file to be transferred to other solicitors.
”During the conference the client denied that he had any psychiatric or psychological problems and after being confronted by Counsel that he had approximately three referrals of a psychiatric and psychological nature, client persisted in maintaining that there were no such difficulties. Client’s girlfriend was in attendance throughout the conference at the client’s request. In view of this development, Counsel felt it appropriate that he should seek other advice as there could be some conflict if we advised him in this regard.”
54 In his oral evidence in chief, Mr Bykowski admitted that, despite the advice he had received from Counsel as to the conflict of interest, he thought he could “ram through the matter without going through and raising great alarm. It’s something I should not have done.” [T10- 19.02.02] He admitted in relation to his client that he has “fobbed him off”. [T10] In cross-examination, Mr Bykowski was less frank and the Tribunal does not accept his assertion, made for the first time in cross-examination, that Mr Findell had been advised that there was a six months’ notice of claim requirement applicable to his case. [T60] This has not been raised in his evidence in chief or in any correspondence and followed the response a little earlier in which he stated that he did not specifically recall telling Mr Findell that he had six months from the accident to serve his notice. [T59]
55 Mr Bykowski in relation to Mr Findell and various other matters sought often to rely upon what he described as his usual practice or procedure although this was often clearly in conflict with other unchallenged evidence and not otherwise supported by file notes, correspondence or other material.
56 In the Findell matter the evidence available to the Tribunal was simply overwhelming and established levels of dishonesty and general misconduct of a deplorable nature. While some admissions were made by the solicitor, these in no way overcome the fundamental weaknesses in the solicitor’s character and conduct which are quite apparent in his conduct and the evidence in relation to the Findell matter. In his response to the Law Society [page 60061] he asserts that Mr Findell’s file was lost for two years and found shortly before August 1993, which clearly cannot be true when Mr Stevens had the file for the purpose of advising the solicitor on 26 July 1993.
E. Khairalla57 There are ten grounds of complaint arising out of the solicitor’s dealing with this client. The Tribunal has found all of these grounds established and that the cumulative effect of those findings is that the solicitor’s conduct in relation to Mr Findell amounts to very serious professional misconduct. The facts established in relation to the conduct of Mr Findell’s claim alone raise very serious issues as to the fitness of Mr Bykowski to remain on the Roll of solicitors.
58 The complaints in this matter arose out of the solicitor’s conduct of instructions to take proceedings in the Local Court for the client. The grounds of complaint are:
59 The evidence of the investigator was that the solicitor received instructions on 19 February 1990 but did not prepare the Statement of Claim until 20 September 1990 and it was not filed until about October 1990. A letter from the Solicitor to the Society makes reference to “correspondence from the neighbours and further conferences with our client in the interim period”. The letter adds “We cannot see why no action was carried out before Thursday and can offer no explanation in this respect.” It is not clear whether the correspondence was in the period between instructions and drafting a Statement of Claim or the period between drafting and filing the Statement of Claim.
i. Failure to carry out instructions;
ii. Delay.
60 In his oral evidence in chief the practitioner addressed this matter and the evidence he gave seems to be the very first time that he has offered any explanation. [T11-12] In effect, he explained that his delay was because the property damage was small and the proceedings offered an opportunity to seek to gather evidence to support a damages claim for an allergy on behalf of his client’s son. The initial claim appears to have been real but small and part of a larger issue between the client and her neighbour. No evidence was provided by the client and the matter is rather confused.
61 The grounds for complaint in relation to this client are not established and the complaints are dismissed.
F. Houda
62 The complaints in this matter arose out of the solicitor’s conduct of a personal injury action in the District Court which the solicitor took over as part of his acquisition of the practice of Mitry Walker. The grounds of complaint are:
63 The evidence relied upon by the Society consisted of the first report of Mr. Williams and documents from the client file including a copy of the Trust account ledger detailing receipts and payment.
i. Transfer of moneys without authority;
ii. Breach of Section 61 (2) of the Act;
iii. Non-compliance with Clause 7 of the Regulation;
iv. Failure to keep adequate accounting records;
vi. Failure to pay third party;
vii. Failure to account;
viii. Misleading or endeavouring to mislead third parties;
ix. Unsatisfactory professional conduct involving a substantial or consistent failure to reach reasonable standards of competence and diligence.
64 The documents also included a settlement authority signed by the client which authorised the solicitor to deduct from the verdict his professional costs of $5,000 with disbursements paid by him not to exceed $4999.17 and $3063.80 for outstanding medical and like expenses, together with a litigation lending loan of $2122.62 plus further interest “to date”.
65 The Trust Account ledger shows that the settlement moneys were received on 1 June 1990 and a transfer made a week later as “To Bykowski & Co (C&D in full)” of $5,924.00.
66 The documents also included what appears to be a draft account addressed to the client and entitled “Memorandum of Costs and Disbursements” dated 7 May 1990 which is in the form of a series of entries by reference to date and work done without any total costing apart from handwritten numbers (the highest legible seems to be “10”) appearing beside those items which apparently represent some unspecified unit of charge per item. There is no list of disbursements on this draft bill and a copy of the Trust account ledger appears to be the only accounting record available.
67 There is no evidence to suggest that the draft account was ever submitted to the client, nor indeed if it had been so submitted it clearly would not have satisfied the solicitor’s obligations in relation to accounting for the money received.
68 The solicitor wrote on 22 October 1990 in response to a facsimile from a treating physiotherapist in the matter:
69 The evidence offered by Mr Bykowski in relation to his obligations to deal properly with Trust account moneys in this matter was limited to his oral evidence where he detailed his recollection of his usual arrangements in handling the resolution of personal injury claims. This is not consistent with his file records, as inspected by Mr Williams, and the Tribunal is satisfied that there was a failure to account and the moneys were transferred without authority. The Tribunal accepts that the statements required under Regulation 7 were not sent and that the solicitor very obviously failed to keep adequate accounting records. There are numerous instances of breaches of S61. These are typified by the cavalier disregard of his duties in relation to moneys held in trust for this client and can only be described as wilful. His evidence in relation to the physiotherapy account was in terms that he thought he had dictated the letter without looking at the file. He said that later he had sent a cheque to the physiotherapist which had been returned unclaimed and he then sent that cheque on to the client. He did not know whether the physiotherapist had ultimately been paid.
”The usual procedure in matters of this type is to have physiotherapy expenses settled on completion of matters and we anticipate receiving our client’s instructions to this effect”.
The evidence clearly is that the matter had already been settled when the solicitor wrote and the Tribunal was asked to draw an implication from the solicitor’s letter that, as at 22 October 1990 the matter had been settled and that the solicitor’s letter was misleading and deceptive. The solicitor failed to pay the physiotherapist’s account.
70 The first seven grounds are established and they constitute professional misconduct. The facts relied upon to establish the final ground of unsatisfactory professional conduct are the same facts upon which the more serious finding of professional misconduct has been made and the Tribunal makes no finding on the eighth ground.
G. Saba Manachian
71 The file for this client had been taken over by the solicitor from Mitry Walker but all documents in the file related to work done by Mitry Walker. The grounds of complaint are:
72 The Trust account ledger showed one payment into the Trust Account by transfer from Mitry Walker of $123 on what appears to be 10 May 1988 and the transfer of that same amount to the solicitor’s firm’s General Account described as “C&D in full settlement” on what appears to be 13 November 1990.
i. Transfer of moneys without authority;
ii. Breach of section 61(2) of the Act;
iii. Non-compliance with Clause 7 of the Regulation;
iv. Failure to keep adequate accounting records;
v. Failure to account.
73 The evidence of Mr. Williams is that there was no evidence of any work being performed by the solicitor and no evidence of any memorandum of costs and disbursements or Trust Account statement nor any basis or explanation for the solicitor being entitled to appropriate the sum of $123.
74 Mr Bykowski explained that this was one of the matters that he discussed with a Trust Account Inspector. He claimed that, in accordance with the manner he had these “clean-up matters” dealt with, an account was sent. There is no account in the file inspected by Mr Williams and the evidence of the solicitor does not advance any satisfactory explanation. The Tribunal finds that no statement was sent in this matter, as then required by Regulation 7. Moneys have clearly been transferred without authority, S61(2) has been breached, the solicitor’s accounting records for this client are inadequate and, finally, the Tribunal finds that the solicitor did fail to account.
75 All of the grounds of complaint are established to the Tribunal’s satisfaction and, on the basis of the facts proved, a finding of professional misconduct is made in relation to the solicitor’s handling of this client’s affairs.
H. Vera Shina
76 The client retained the solicitor to act on her personal injury claim in the District Court. Grounds of complaint in relation to this matter are:
77 The relevant evidence in relation to this matter presented by the Society are contained in the first report of Mr. Williams and the documents referred to in that report.
i. Transfer of moneys without authority;
ii. Breach of Section 61(2) of the Act;
iii. Non-compliance of Clause 7 of the Regulation;
iv. Failure to keep adequate accounting records;
v. Failure to account.
78 An initial credit of $72 into the Trust Ledger for the matter entered as “St George Area Health Service” is identified. Subsequently the ledger shows receipt of the verdict and payment of various expenses including the solicitor’s costs and disbursements, all of which moneys were paid out on or before 20 December 1989, leaving a credit balance of that $72 which remained in the account until 13 November 1990, when the account was cleared by the transfer of that sum of $72 to the solicitor’s General Account and the entry noted “C&D in full settlement”. There is no evidence of any statement being issued to the client in relation to the moneys held over that relevant period under the then Regulation 7. There is no outline account for these moneys before they were drawn on the Trust Account, nor authority for payment out.
79 The evidence of Mr Bykowski was that there would have been a bill for the $72 but he was frank enough to admit that he could not recall having seen a copy of that bill. The amount is small but that is no excuse or explanation.
80 The solicitor’s course of conduct in relation to removing small balances from his Trust Account to close ledgers is simply totally unsupportable. The Tribunal is satisfied that these moneys were transferred by the solicitor to clear his ledger, without regard to his obligations and amounts to misappropriation for his own benefit. He had no entitlement whatsoever to these moneys.
81 The transfer in this matter is part of an overall pattern of similar transfers and the five various grounds of complaint are established and the Tribunal finds that the solicitor has been guilty of professional misconduct in relation to his actions in the Vera Shina matter.
I. S. El Hage
82 The solicitor acted for the client in the proceedings in which settlement moneys of $4,700 were received from NRMA on 29 April 1994. The complaints in this matter are:
83 The solicitor’s Trust Account ledger was inspected by Mr. Williams on 2 September 1994 when the only entry recorded in relation to this matter was the credit on 29 April 1994.
i. Non-compliance with Clause 7 of the regulations;
ii. Failure to keep adequate accounting records;
iii. Delay in accounting for funds received;
iv. Unsatisfactory professional conduct involving a substantial or consistent failure to reach reasonable standards of competence and diligence.
84 Subsequently when the ledger was inspected on 8 November 1994 a second entry appeared on the ledger, namely “To Sumi Haj as per instructed - $1500” which left a credit balance of $3,200.
85 In its particulars the Society complains that the solicitor failed to record an entry showing the transfer of $1500 to the client as at 2 September 1994 when in fact that payment was subsequently recorded as having been made on 5 August 1994. The complaint to that extent relates to the delay in the entry being made on the ledger.
86 Mr. Williams reported that there is no evidence in the file of any instruction to transfer the sum of $1500 and further that when the file was inspected on 27 September 1994 it gave no indication of the payment to the client.
87 The inspector’s report does not refer in this instance to the issue of compliance or non-compliance with Clause 7 and in the absence of evidence that ground is dismissed.
88 The accountancy records of the solicitor are clearly inadequate and there is delay but in this instance the Tribunal finds both grounds establish unsatisfactory professional conduct rather than the even more serious finding sought by the Society. The conduct issues already found against the solicitor form the basis of the fourth complaint and this ground is superfluous and is dismissed.
J. V. El Hage
89 In relation to this client the complaint alleges:
90 The evidence relied upon by the Society comprised the relevant section of the first report of Mr. Williams and copies of the Trust account ledger for the matter made on 2 September 1994 and 8 November 1994. In the summary at the commencement of his report, Mr. Williams refers to both this and the associated matter of S El Hage as involving delay in accounting for funds received on behalf of the client. The evidence discloses that a payment of $4,700 was received on 29 April 1994 into the solicitor’s Trust account and on 31 August 1994 payment of $3,700 was made to the client and entered as “settlement moneys in full” while the remaining balance of $1,000 was transferred to the solicitor’s account as “C&D in full” on 9 September 1994. Mr. Williams’ report asserts:
i. Transfer of moneys without authority;
ii. Breach of Section 61(2) of the Act;
iii. Non-compliance with Clause 7 of the Regulations;
iv. Failure to keep adequate accounting records;
v. Delay in accounting for funds received;
vi. Failure to account.
91 The solicitor gave oral evidence in relation to this matter. He could not remember a reason for delay and said “ The only thing that I could think of would be Social Security payback, that’s the only reason I think I can put it down to”. The file on the matter and the report do not support this explanation which is rejected by the Tribunal. Clearly moneys have been transferred without authority, S61(2) has been breached and the Tribunal finds that the breach is wilful. There is no compliance with Regulation 7, he accounting records and the maintenance of those records is grossly inadequate and the solicitor has failed to account.
”At the time of inspection on 27 September 1994 the file contained nothing to indicate any instructions had been sought or received from Mrs El Hage specific to this matter, although the correspondence in the matter of this El Hage is clearly relevant. Nor did the file contain any account for $1,000 apparently transferred on 9 September 1994, although it would appear that the terms of settlement provided for costs to the solicitor in that sum. Accepting the entries as they stand, however, it appears that the sum of $4,700 remained idle in the Trust account from 29 April 1994 to 31 August 1994.
92 The evidence of Mr Williams and lack of explanation by the solicitor leave the Tribunal in no doubt that the evidence fully supports the grounds of complaint and the Tribunal finds the solicitor guilty of professional misconduct in relation to this client.
K. Estate Maria Ban
93 The solicitor acted for Mrs Yarullin the executrix and sole beneficiary of this Estate. Grounds of complaint are:
i. Transfer of moneys without authority;
ii. Breach of Section 62(1) of the Act;
94 The evidence of Mr. Williams and the documents produced from the file established:
iii. Non-compliance with Clause 7 of the Regulations;
iv. Failure to keep adequate accounting records;
v. Overcharging;
vi. Failure to account.
95 The two accounts are initially confusing because of the similarity of amount and the fact that they cover the same work with the exception that matters relating to administration following Probate are included in the larger account. However, the transfer from the Trust account is the total of both accounts, that is a sum of $17,320.20 on 31 January 1992.
The solicitor forwarded to the Executor by letter dated 30 January 1992 a memorandum of costs and disbursements of the same date amounting to $14,252,20. The memorandum entitled “Memorandum of Costs and Disbursements” consists of a little over two pages of script detailing attendances followed by a lump sum charge of $3,050 with no disbursements listed and a separate account showing costs “as per Scale” $3,042, then detailing “disbursements” of $11,210.20. The detailed memorandum of costs includes professional work beyond the obtaining of the grant of Probate for which the scale fee at that time was $2,011. The short form account with disbursements is obviously significantly in excess of scale but the detailed memorandum for a sum $8 greater than the short account includes some work on the administration of the estate as well as detailing work involved in the application for the grant of Probate.
96 The statement sent on 30 January 1992 which included disbursements showed as disbursements four items of professional charges by the solicitor amounting to $4,384 which clearly should have been shown as costs rather than disbursements.
97 On 31 January 1992 the solicitor sent to his client a letter with a reconciliation statement detailing moneys received and paid to that date including the transfer of costs and disbursements of 31 January 1992.
98 The solicitor’s explanation as to why he charged approximately 50% above the Scale fee on a Grant of Probate was that he misread the Scale. His evidence was that when this was drawn to his attention he, not straight away, but shortly after that, sent a cheque for the difference. This explanation was not offered until the solicitor’s oral evidence on 19 February 2002. It was not proffered by the solicitor in response to the investigator’s report, nor to the complaint nor in correspondence with the Society.
99 This does not, however, erase the fact that there was a gross overcharging, whether by accident or intent. The other issues raised by the grounds of complaint are not addressed by the solicitor, apart from his assertion that he did render an account to the executrix. This statement is in conflict with the evidence of Mr Williams whose evidence on this matter the Tribunal accepts in preference to that of the solicitor.
100 The Society conceded that the misreading of the Scale might have easily been done and, on the basis of that concession, it is appropriate for the Tribunal to dismiss the complaint in relation to overcharging. In the absence of that concession the Tribunal was mindful of the views of Spender J in Re Michael Radin 1996 LPDR1 and the statement of the Court of Appeal in Re Veron; Ex parte Law Society of NSW (1966) 84WN136 at 142:
101 The other grounds of complaint in relation to this matter are, however, clearly established to the satisfaction of the Tribunal and the Tribunal finds that the solicitor is guilty of professional misconduct in relation to his handling of the estate.
”The Court does not sit as taxing officers dealing with individual items of costs. Nor is such an approach realistic in the present circumstances. We are guided by experience in a broad sense of what is reasonable and fair and not by any narrow approach to questions of mere overcharging.”
L. Undertakings given to Legal Profession Standards Board
102 On 25 February 1991 in proceedings before the Legal Profession Standards Board the solicitor gave undertakings:
103 The solicitor further undertook to the Board that he would employ a specified or other suitably qualified and experienced person to assist him in the management of routine legal tasks in respect of current and future legal matters and files and that he would diarise the requirements to check the Trust and Controlled Monies, monthly balances and the requirement to check the transmission of copies of all Trust and controlled money ledgers in March and September of each year.
i. Where money has remained in his Trust account for more than three months and Regulation 7(2)(d) of the Legal Profession (Trust Accounts and Controlled Money) Regulation 1988 applies he will at the time of notifying all trust creditors and those on whose behalf he operates controlled monies accounts, request those persons to direct him to repay the funds to them or to apply the balance standing in Trust within fourteen days failing which the funds would be returned to the client in whose name the account is held.
ii. He will instruct his staff, and display a notice in his office to the effect, that unless the solicitor has made prior arrangements with the client or prospective client, the only Burwood Local Court matters that would be attended to without an appointment would be those in the Summons List each Friday.
104 The Society alleged breach of these undertakings. It relied upon the orders and documents which formed part of the first report of Mr. Williams. His evidence is that there was compliance with Regulation 7(2)(d) between 31 March 1994 and 30 September 1994 but no records of compliance prior to 31 March 1994 and none of the files inspected contained any evidence of statements under Regulation 7(2)(d) having been sent. Further inspection of the files by Mr. Williams disclosed no evidence of there having been a request for directions in accordance with the undertaking in any of the files he inspected, including specific files to which the undertaking related. This report of 7 December 1994 disclosed that in one particular matter the sum of $4048.60 had sat idle in the Trust account since 18 June 1993.
105 Mr. Williams further reported that no notice in relation to Burwood Court matters in accordance with the undertaking was seen by him on any occasions when he visited the solicitor’s office.
106 The evidence of the solicitor did not address his failure to comply with the undertaking in relation to moneys held. His evidence was in terms of dragging out the process of payment of personal injury verdicts to allow sufficient time to clear the cheques. His evidence would suggest that his obligations were satisfied that he paid whatever “net” payment had been agreed with the plaintiff. He did not recall whether there were Trust account ledgers which showed a credit balance from time to time. He simply said there may have been but he did not recall.
107 The Tribunal was led to the view that these were not matters of concern to the solicitor. The undertaking in relation to the notice concerning Burwood Local Court matters was, at best, from the solicitor’s evidence, complied with for some time.
108 Clearly his undertakings were not complied with by the solicitor. Any undertaking or representation made by a solicitor has serious professional consequences. Mr Bykowski has not focused on the importance of the undertakings given and he appears to have treated them in a somewhat cavalier manner. To him, they should have been matters of very real significance, because they related to his professional obligations where his conduct had been called into question and where his future right to practise was either under challenge or possible limitation.
109 The Tribunal finds that the grounds of complaint are established and that, failing to comply with the undertakings given to the Legal Profession Standards Board, the solicitor was guilty of professional misconduct.
M. Legal Profession Standards Board Orders
110 In the proceedings before the Board already referred to, the Board made a number of orders including one, the relevant parts of which read in effect as follows:
111 The complaint alleges breach of that order.
”That until further order of the Board Mr. Bykowski employ part time in his practice a qualified accountant or bookkeeper with experience in maintaining solicitor’s Trust accounts to write up Mr. Bykowski’s Trust records at Burwood at least once each week.”
112 The evidence relied upon by the Society was in the first report of Mr. Williams. He found that at least on some occasions the books were left for considerably longer than one week to be written up. Mr. Williams’ investigations made it clear that the person who wrote up the books lacked the knowledge and experience that a qualified accountant or bookkeeper with experience of maintaining a solicitor’s Trust accounts would bring to the task.
113 The solicitor gave evidence of a number of approaches he made to friends, associates and contacts but indicated that he just could not get anyone to come out and do the work for him. There is no suggestion that the solicitor approached the Board, or indeed the Society, for variation of or release from the orders. It is apparent that the amount of work involved was viewed by the solicitor and those with whom he discussed the matter, as being of a minor nature that would not take much time.
114 The Tribunal does not accept that the solicitor’s efforts, which he retailed, absolved him from compliance with the orders. Writing up of solicitor’s books by experienced bookkeepers has been a traditional function performed in solicitor’s offices, often by part time employees. The Tribunal takes notice from the experience of its members that it is a matter of common sense that bookkeepers and accountants are and have been available in Sydney to perform the tasks required to comply with the orders of the Board in this matter and that to suggest otherwise is a nonsense.
115 From his evidence and approach, it is clear that the solicitor did not regard these orders as important. He is very wrong in that regard and his non-compliance the Tribunal finds constitutes in the circumstances professional misconduct.
N. Estate of A A Lloyd
116 The solicitor received instructions from the deceased’s two sons, who were the executors and beneficiaries of his Will. The deceased died 8 July 1988 and instructions were received by the solicitor in June 1989.
117 The Society complained in relation to the solicitor’s conduct of his instructions:
118 The Society relied upon the verified second report of Mr. Williams and the Affidavit of Mr. Alan Lloyd who complained to the Legal Services Commissioner of delay in failing to communicate over a period of some five and a half years. The estate was a simple one, consisting of basically one piece of real estate with only the very minor complication that the title was in the name of AA Lloyd and his wife who had predeceased him. Mr. A G Lloyd asserts that instructions were given to the solicitor in June 1989 though Mr. Williams reports that the solicitor’s file indicates that instructions were received on 12 November 1990.
i. Failure to carry out instructions;
ii. Delay;
iii. Failure to communicate;
iv. Lack of candour to the Court;
v. Unsatisfactory professional conduct involving a substantial or consistent failure to reach reasonable standards of competence and diligence.
119 The Application for Probate was lodged in October 1993 and requisitions were issued to the solicitor on the Application. The requisitions required an affidavit as to delay, an affidavit of attesting witness, republication of the advertisement and correction and re-swearing of the affidavit of publication. The requisitions further pointed out that the Certificate of Title, and Transmission Application had been filed in error with the Application. The solicitor was requested to collect these documents from the Registry.
120 Reminders from the Probate division were sent on 19 July 1994 and 3 November 1994 and compliance occurred in relation to the Affidavit of Delay, which was filed on 2 November 1994. This affidavit was sworn by the solicitor who asserted that instructions were received on 12 November 1990 and the Probate documents prepared for execution in late November 1990. In his oral evidence in chief the solicitor accepted that he received instructions in June 1989 [T24]. The affidavit filed in the Supreme Court attributes the delay to the executors when clearly the solicitor was guilty of neglect and delay.
121 It is clear from these matters and the material in Mr Williams’ report that, once more in the conduct of this matter, the solicitor has substantially failed to reach reasonable standards of competence and diligence in his handling of the matter and this constitutes unsatisfactory professional misconduct.
122 The complaint of lack of candour to the Court is perhaps a generous interpretation of an affidavit by the solicitor which might well justify the view that the Affidavit was designed to mislead the Court. The gross failure to carry out instructions and the delay involved are all serious and have been clearly established.
123 The Tribunal finds that the solicitor is guilty of professional misconduct in relation to all these matters leaving only the “failure to communicate” issue.
124 The complaint of “failure to communicate” is more difficult. The evidence is a little confused, but it is clear that the solicitor moved office in the course of conducting this matter. There is evidence of friction between the executors and there is evidence of personal problems of one of the executors which may have interfered with proper communication. This does not impact upon the delay issue which is established quite adequately from the manner in which the solicitor dealt with the Court. One of the executors was brought to the Tribunal for cross-examination but that did not eventuate and he was not subsequently recalled by the solicitor. The state of the evidence on the lack of communication complaint does not satisfy the Tribunal that this ground has been established and accordingly that ground is dismissed.
O. Boumelham
125 Instructions in relation to a motor vehicle personal injury claim were taken by Mitry Walker. Legal Aid was granted and the work prior to grant of Aid was billed by Mitry Walker. Legal Aid paid a sum of $410 to Mitry Walker which was deposited in the solicitor’s Trust account on 17 May 1988. The letter from Legal Aid referred to payment as being “an advance of disbursements”. A sum of $30 paid to Mitry Walker for the costs of the Aid application was paid to the solicitor by Mitry Walker and deposited in his Trust Account on 2 May 1988.
126 The grounds of complaint allege:
127 Mr. Williams’ report establishes that the $410 from Legal Aid was to cover the fees for three medical reports. The file indicates that one of these report fees was paid by Mitry Walker and a Memorandum of Costs and Disbursements of the solicitor shows two of the payments as disbursements.
i. Transfer of moneys without authority;
ii. Breach of Section 61(2) of the Act;
iii. Failure to keep adequate accounting records;
iv. Double charging;
v. Failure to account.
128 In 1990 the solicitor was given written instructions to discontinue the action. He submitted an account for work done including work by Mitry Walker to the Legal Aid Commission but that account was not paid. The unpaid account was remitted on 18 June 1990. However on 7 June 1990 the solicitor transferred a sum of $440.00 to his General Account leaving a balance of $160 in the ledger. The transfer of $440 was in breach, amongst other things, of S61(2) and was an intentional act and so may be classified as wilful. Mr. Williams reported no accounting statements of any description were issued to the client or the Legal Aid Commission in relation to those trust moneys and that if the disbursements shown in the subsequent memorandum of costs of 18 June 1990 were correct, they include only two of the doctor’s fees which had been transferred so that a balance of $160 remained unaccounted for. The Society further submitted, however, that as the $250 had been paid the memorandum of costs was in fact seeking a further payment as no credit was allowed in that account for any pre-payment.
129 The solicitor did not explain this matter. He admitted mistakes, oversights and suggests that doctors’ fees “would have been paid by me”. His evidence on this is hopeful surmise and the Tribunal is satisfied that the material presented by the Society establishes each of the grounds of complaint in relation to this client and finds that the conduct in question amounts to professional misconduct.
P. Dalal Youssef
130 The solicitor took over the conduct of a personal injury claim on behalf of the client from Mitry Walker. The grounds of complaint in relation to his conduct are:
131 The Society relied upon the second report of Mr. Williams and various documents produced from the solicitor’s records.
i. Transfer of money without authority;
ii. Breach of section 61(2);
iii. Non-compliance with Clause 7 of the Regulation;
iv. Failure to keep adequate accounting records;
v. Double charging;
vi. Failure to account.
132 Mr. Williams reported that the file contained a document dated 18 April 1991 headed “Memorandum of Costs and Disbursements” which contained no disbursements and refers to costs amounting to $9087. The file also contained what appears to be an earlier draft account of 22 June 1990 for work performed to an earlier date and a copy of an interim account from Mitry Walker for costs and disbursements of $769. There was no record in the file of any statement being issued under Clause 7 of the Regulations. Mr. Williams pointed out that the Mitry Walker account included items which were also separately charged again by the solicitor in his subsequent account, that charge being a sum of $920. The file also included a summary of payments and outlays which was not an accurate statement of Trust account transactions in that it included payments already billed by Mitry Walker.
133 The costs and disbursements transferred from the solicitor’s Trust account on 18 April 1991 amount to $9770.65 and the documentation in the file did not explain why the transfer exceeded the amount of the account of the same date by $613.65. This is another breach of S61(2) and it is found to be a wilful act of the solicitor.
134 The evidence by the solicitor on this matter as given in chief in which he admitted “I can’t give you an answer now. That looks like I charged too much. Well, transferred more than what I have authority to transfer”. [T30]
135 The Tribunal is satisfied that on the evidence presented the grounds of complaint in relation to this matter have each been established and finds that the conduct complained of constitutes professional misconduct.
He did not offer any other explanation.
Q. Le Fevre
136 Between October 1988 and July 1992 a series of payments were made to the credit of the solicitor’s Trust account in relation to this client. The Society complains in this matter of:
137 The evidence of Mr. Williams was that payments were transferred from the Trust account to the solicitor’s General account from time to time and these were shown on the Trust ledgers. There is evidence that there were no accounts sent to the client in relation to these moneys transferred, no authority and no outline bill. Mr. Williams also noted that the last two Trust account entries were not in chronological order.
i. Transfer of moneys without authority;
ii. Breach of Section 61(2) of the Act;
iii. Non-compliance with Regulation 7 of the Regulation;
iv. Failure to keep adequate accounting records;
v. Failure to account.
138 The solicitor’s evidence is that memoranda of costs and disbursements were always rendered to Ms Lefevre. He also said that bills were prepared but added “I don’t know what file it is on. – What was once thought to be the major file became another file, other files took over from – after that”. The evidence from Mr Williams is quite clear and there are no proper accounting records nor authorities or accounts with files. It is clear there has been a wilful breach of Section 61 and of the Regulations and that the solicitor has failed to keep adequate accounting records.
215 The solicitor was interviewed by the Trust Account Inspector Mr Wheeler in relation to this matter and also in relation to the Ghassan Achi. Mr Bykowski stated:
216 Mr Williams reported that Mr Mitry claimed to have pursued the solicitor actively in relation to litigation loans and the solicitor’s papers included a letter from Laurence & Laurence on behalf of Mr Mitry dated 6 November 1990 in relation to the alleged breach by the solicitor of his agreement in relation to litigation loans with Mr Mitry. Indeed, in another matter of Dabies, Mr Bykowski received an authority dated 27 May 1992 signed by Mr Mitry in relation to the clearance of a litigation loan entitlement for that matter notwithstanding that Mr Bykowski maintained to Mr Wheeler that Mr Mitry had disappeared six to twelve months after the sale of his city practice. The report of the investigator further states that the solicitor had asserted to Mr Wheeler that Mr Mitry had agreed to indemnify Mr Bykowski should he incur losses on the files but this was not substantiated by reference to the agreement.
”R Mitry could not be located and all known contacts indicated he had disappeared.”
217 The Society relied upon the statements to Mr Wheeler in support of the second of its grounds of complaint.
218 In his evidence Mr Bykowski did not dispute any of the matters raised in the report and he then acknowledged that his account included payments for the period when Mitry Walker had handled the matter. He dismissed the transfer of the sum of $24 with a response:
219 The cross-examination of Mr Bykowski on 20 February 2002 [T21-22] concluded with questions in relation to the money owing to Mr Mitry in the Yarullin matter. The Tribunal has found that the responses of the solicitor to those questions, while consistent in many ways with other parts of his evidence, cast considerable light on his approach to his responsibilities as a solicitor and indeed his understanding of those responsibilities. This evidence was as follows:
”Yes, the $24 was part of that general wash up after the second Trust Account inspection.”
220 The evidence is clear and unchallenged. The grounds complained of have been established to the satisfaction of the Tribunal. These grounds each in fact involve acts that in the opinion of the Tribunal constitute professional misconduct.
”Q. The description in the trust ledger records on account of costs and disbursements was simply wrong, wasn’t it?
A. Well the first I’ve put my mind to it, yes it wasn’t appropriate.
Q. And you knew that’s how the money was being described in your trust account records?
A. Yes.
Q. And you knew that was false?
A. Well I appreciate that now.
Q. Sir but do you still put to the Tribunal that, leaving to one side how the transfers were described in your trust account records, there was nothing in substance wrong with you and the client sharing these litigation lending monies?
A. I made all the inquiries that I thought were possible and I couldn’t think of any other way of resolving that problem, that seemed to be the only solution.
Q. Can you answer my question, do you still say to the Tribunal today that, putting to one side questions of form such as the terms of the trust ledger account records, that what you did was a perfectly honest and proper way of dealing with the funds?
A. I cannot think of any other resolution and I –that is what I thought was appropriate at the time and I still can’t think of any other way of resolving that.
Q. And you still take the view that what you did was appropriate?
A. Yes.”
Y. Robert Reuss
221 The grounds of complaint in relation to this client were:
i. Failure to carry out instructions;
222 The solicitor acted for Robert Reuss in a Workers Compensation redemption application. The evidence in relation to this matter was detailed in the report annexed to the Affidavit of Jean Sayer.
ii. Delay;
iii. Failure to pay third party;
iv. Delay in accounting for funds received;
v. Failure to account;
vi. Unsatisfactory professional conduct involving a substantial or consistent failure to reach reasonable standards of competence and diligence.
223 Following redemption the solicitor received a cheque for $4,200.73 which was paid into his Trust account. This amount was received on 7 December 1994 for payment of medical expenses.
224 On 21 November 1995 Mr Bykowski forwarded the file to Ms Sayer at her request for the payment out of the $4,200.73 which had remained in the Trust account at that time for almost a year. The file contained a number of letters in relation to the non-payment of those expenses. Ms Sayer was acting as receiver and she signed cheques for the amount on the Trust account for payment of the medical expenses and sent those to the solicitor on 8 December 1995 with a covering letter pointing out that the full amount of the medical expenses totalled $6,294.28 so that there was a shortfall.
225 Ms Sayer reported that on reconciling the Trust account none of the cheques had been presented and, although the solicitor returned the file on 5 June 1996, he did not respond to the receiver’s letter of 8 December.
226 From Ms Sayer’s report it is clear that the shortfall was brought about by the deduction from the payment of out of pocket expenses by the insurer’s solicitors of moneys due to Commonwealth Rehabilitation Service. It is not clear whether the Society relies upon that error in support of any part of the grounds of complaint but in any event the evidence is inconclusive.
227 The solicitor sought to explain his delay on the basis that the doctors concerned had charged normal Scale rather than workers’ compensation Scale and the amounts paid by the insurer were at workers’ compensation rates. The Solicitor claimed he would then have to work out what the various doctors were entitled to. The solicitor further denies his oral evidence that he received cheques from Ms Sayer for transmission to the various doctors. [T41] The explanation is clearly wrong as the unchallenged report shows that the deficiency arises out of the refund due to Commonwealth Rehabilitation Service. The solicitor has had Ms Sayer’s Affidavit for a lengthy period of time and has not challenged the report apart from these denials in oral evidence on 19 February 2002.
228 The Tribunal finds that the solicitor is in error and accepts that cheques were drawn by Ms Sayer.
229 The Tribunal accepts that the solicitor failed to sign the cheques as instructed by Ms Sayer and finds that the evidence satisfies all grounds of complaint. The final ground of complaint is in this instance dismissed by the Tribunal because the findings on the five other grounds establishes in the view of the Tribunal professional misconduct on the part of the solicitor which in the circumstances should be the only finding in relation to the conduct of the instructions of Mr Reuss.
Z. Michael Guo
230 The solicitor acted for Mr Guo on a property damage claim which was resolved at arbitration in an award of $6830 made up as follows:
231 The grounds of complaint were:
Verdict $5,500
Witnesses’ expenses $210
Professional costs $850
Issue fee $60
Solicitor’s costs $210
$6,830
The Award was paid to the credit of the client in the solicitor’s Trust account on 4 January 1995 as outlined in the verified report of Jean Sayer who was appointed receiver of the solicitor’s property on 28 April 1995.
232 On 28 June 1995 Ms Sayer received a facsimile request from the solicitor asking her to pay the sum of $6830 to Mr Guo. Ms Sayer responded that same day by requesting the file and the letter of credit for the Trust account so that she might draw the moneys. The file had been requested by Ms Sayer shortly after her appointment as Receiver. It was not produced until 24 November 1995. Ms Sayer then observed the file contained an incomplete bill of costs and she sought advice from Mr Bykowski as to whether full amount should be paid out to Mr Guo or whether the solicitor would complete his bill of costs and for that purpose the file was returned to the solicitor and had not been returned to the receiver as at the date of her report, namely 22 July 1996.
i. Delay in accounting for funds received;
ii. Unsatisfactory professional conduct involving a substantial consistent failure to reach reasonable standards of competence and diligence.
233 The Tribunal takes the view that the evidence which has been summarised already should properly be viewed in the context of:
234 In the circumstances The Tribunal finds that the evidence does not establish these complaints and they are dismissed.
(a) The short lapse of time between the date of receipt of the moneys and the appointment of the receiver;
(b) The solicitor’s response subsequent to the appointment of the receiver to direct the receiver to pay all moneys received;
(c) The absence of any evidence to suggest that by effectively foregoing his costs which were included in the arbitrator’s award that anyone other than the solicitor would suffer financially;
(d) A reasonable expectation that Ms Sayer as receiver and signatory on the Trust Account would pay out the total moneys held to the client as requested. The Tribunal does not suggest for a moment that that was an appropriate course. The solicitor’s oral evidence [T42] is simply in terms that he said that he did not render a bill and he did not receive any money and he wanted all moneys sent to Mr Guo.
AA. Charles Chahade
235 The solicitor acted for Mr Chahade on a workers’ compensation and an associated common law claim. The grounds of complaint were as follows:
236 The evidence upon which the Society relied was contained in the verified report of Jean Sayer.
i. Delay;
ii. Failure to pay third party;
iii. Delay in accounting for funds received.
237 The solicitor received and banked to his Trust Account to the credit of the client the sum of $45,000 on 28 February 1995, being the common law settlement moneys. He made payments out of that account of $42,000 in the following month and those payments which included $6,000 costs and disbursements of the solicitor were not challenged.. The remaining balance in the account as at 31 March 1995 was $3,000.
238 Ms Sayer was appointed as receiver on 28 April 1995.
239 In his oral evidence [T43] the solicitor stated that he had been instructed to withhold the moneys and that the client would negotiate with the witnesses whose lost wages were included in the sum and with the doctors concerned to make arrangements with them. The Tribunal already has evidence of this arrangement whereby out of pocket expenses included in claims were sought to be negotiated for lower sums. There is no question of the solicitor seeking to explain delay by reason of the appointment of the receiver and the process seems to have been a continuing one and for a reason which the Tribunal finds is disgraceful for a professional man. The deliberate nature of the delay and the purpose of it cast the solicitor’s conduct in a very serious light. The three complaints are clearly established and the Tribunal finds that the behaviour of the solicitor in relation to this matter constitutes professional misconduct.
BB. Melinda Sawires
240 The Solicitor acted for this client on a third party claim which was determined by an Arbitrator. The grounds of complaints relied upon by the Society were:
241 On 18 June 1993 the solicitor deposited to his Trust account to the credit of the client the sum of $4048.60 received from GIO representing the Award.
i. Delay;
ii. Failure to pay third party;
iii. Delay in accounting for funds received.
242 Party and Party costs were taxed including allowance for the costs of the insurer following the non-acceptance of an offer of compromise by the client. The party/party costs were determined at $2,500 which was paid to the solicitor’s Trust account on 2 May 1995 at which time no settlement moneys had been disbursed and the moneys all remained in the Trust account at the date of the report, namely 22 July 1996.
243 Ms Sayer refers to a request to her for cheques to be drawn including a cheque for a Dr Shepherd that is not amongst the cheques that Ms Sayer drew. Ms Sayer formed the view that the Government Insurance Office had underpaid the amounts due by making duplicate deduction and she sought to resolve this initially through the solicitor and ultimately with the GIO. She drew cheques to disburse moneys in hand on 29 June 1995 and sent those to the solicitor for dispatch but none of those cheques were presented, other than the cheque in favour of Bykowski & Co. Ms Sayer made repeated requests to Mr Bykowski for the return of the file so that she might re-issue the cheques which were stale to clear up the $400 which remained in the Trust account but as at 22 July 1996 the file had not been returned, though Ms Sayer had paid from the Trust account the outstanding accounts.
244 The solicitor’s evidence [T43] in relation to this matter involved his recalling his problems involved in recovering costs from the GIO but otherwise he did not recall receiving any cheques including the one in favour of his firm.
245 The matter was not further explored in cross-examination. The Tribunal formed the view that in all the circumstances it is not satisfied that the evidence established the grounds of complaint.
CC. James Davidson and Julie Lee Farias
246 The grounds of complaint are:
247 The solicitor acted for all parties on the transfer of a block of land in a new subdivision. The transfer was settled on 5 July 1991 when the consideration payable by the transferee of $20,000 was advanced by the Commonwealth Bank.
i. Failure to carry out instructions;
ii. Delay;
iii. Unsatisfactory professional conduct involving a substantial or consistent failure to reach reasonable standards of competence and diligence.
248 It appears in the normal course of events that the Commonwealth Bank took the documents of title for registration and the next development is a little over two years later when the solicitor’s clerk collected the Transfer from the Commonwealth Bank on 20 August 1993. Ms Sayer reports that the Commonwealth Bank wrote to the solicitor on 29 November 1994 advising him that the Transfers prepared by him and forwarded to the Bank were incorrect. New Transfers were requested.
249 The Bank on 28 September 1995 wrote to its customers expressing concern that the Transfer had not been registered and the Bank had been unable to register its mortgage. Ms Sayer’s report indicates that the delay commenced in May 1993 though perhaps it might be more correct to assert that an error occurred on the conveyancing settlement on 5 July 1991 when it would appear the Commonwealth Bank accepted a Transfer that was not in registrable form.
250 There is a quotation from correspondence between the solicitor and the Bank in Ms Sayer’s report which indicates that since settlement and prior to 21 November 1995 the Transferor become a disabled person and by implication there were problems having a Transfer signed. The letter also refers to the loss of the first Transfer. The solicitor suggested to the Bank that it submit an explanation to the Land Titles Office of what appears to have been some proposal to have a Transfer registered without execution by the Transferor. The Bank’s response of 21 November 1995 sought resolution of the issue by the solicitor having the Transfer signed under Power of Attorney or by the Transferor’s mark. The evidence does not disclose the nature of the disability of the Transferor so there is no evidence as to whether she could execute with her mark.
251 The complaint was made to Ms Sayer on 27 February 1996 and she sought the file from the solicitor which was provided to her on 5 June 1996 as she details in her report dated 22 July 1996.
252 The evidence relied upon by the Society in support of the three grounds of complaint in the view of the Tribunal is clear. The solicitor in his oral evidence did not recall what the fault in the Transfer was. [T44] His evidence in chief does not clarify the matter and he was not cross-examined on these issues. The solicitor acknowledged that he prepared the Transfer which clearly remained unregistrable over a long period without the solicitor resolving the defect. His failure to carry out instructions is clear as is his delay and his woeful failure to attend to the matter properly. He indeed displayed neither competence nor diligence in this matter.
253 The Tribunal finds that the three grounds have been established on the evidence and that the solicitor has in this matter been guilty of unsatisfactory professional conduct.
DD. Gregory Phillips
254 The solicitor acted for Mr Phillips on a personal injury claim. The evidence relied upon by the Society is set out in Ms Sayer’s verified report. The grounds of complaint are:
255 The solicitor deposited to his Trust account on 14 February 1995 the sum of $500 to cover disbursements in this matter. He arranged for an accident report to be furnished and received an account for that service amounting to $745.50. On 19 December 1995 the solicitor requested that the receiver pay the $500 in the Trust Account to the provider in part payment of the account. Ms Sayer reports that she drew the cheque and returned it to the solicitor with the file but the cheque was not presented. The solicitor’s evidence was that he did not recall receiving that cheque or, indeed, getting any cheques from Ms Sayer. [T48]
i. Failure to carry out instructions;
ii. Delay;
iii. Failure to pay third party.
256 Up to the time of his request for a cheque in part payment of the outstanding account on 19 December 1995 there is nothing particularised which would justify any complaint against the solicitor in relation to this matter. Clearly a cheque was drawn on 20 December and forwarded to the solicitor. The cheque was never presented and there is no evidence that it had ever been received by the solicitor, in fact its receipt is denied. The Tribunal finds the evidence does not support the complaints made against the solicitor in relation to this client and those complaints are dismissed.
Conclusion
257 This matter has involved a large number of complaints and in the vast majority of these the Tribunal has found that the solicitor has been guilty of professional misconduct. Findings of unsatisfactory professional conduct have also been made and a small proportion of the complaints have been dismissed.
258 The evidence in the opinion of the Tribunal clearly establishes an outrageous course of conduct by the solicitor. There is a clear pattern of dishonesty running through many of the complaints. It is not suggested that the fact that the relatively small sums of money involved in many of his defalcations from his Trust Account affected the quality of his acts. Clearly what the solicitor did was wrong, and was known to be wrong. His explanations on so many matters are not consistent with a basic honest approach to the discharge of his responsibilities to his clients and his duties as an officer of the Court. The findings of professional misconduct made on the allegations particularised by the Society speak for themselves. The findings are numerous and they establish a pattern of dishonesty which is totally inconsistent with the solicitor remaining on the Roll of Practitioners. The nature of so many findings made in this matter in relation to professional misconduct and the absence of any mitigating circumstances made the outcome inevitable. There have also been a considerable number of findings of unsatisfactory professional conduct but the Tribunal does not impose any further specific penalty in relation to these matters.
259 The prime duty of the Tribunal is protection, rather than punishment. In Kennedy –v- The Council of the Incorporated Law Institute of New South Wales 1940 13ALJR at 563, Rich J said:
260 In the Tribunal’s view the findings and the nature of the evidence lead inevitably to the finding that Mr Bykowski is not a fit and proper person to practise as a legal practitioner and his name must be removed from the Roll of Practitioners.
”a charge of misconduct as relating to a solicitor need not fall within any legal definition of wrong doing. It need not amount to an offence under the law. It was enough that it amounted to grave impropriety affecting his professional character and was indicative of a failure either to understand or to practise the precepts of honesty or fair dealing in relation to the courts, his clients or the public. The particular transaction the subject of the charge must be judged as a whole and the conclusion whether it betokened unfitness to be held out by the court as a member of a profession in whom confidence could be placed, or on the other hand, although a lapse from propriety, was not inconsistent with general professional fitness and habitual adherence to moral standards, was to be reached by a general survey of the whole transaction.”
261 In relation to costs, these proceedings have been unduly extended by the manner in which they have been approached by the solicitor. Directions were given prior to the commencement of the hearing for the solicitor to file Affidavit material. He failed to do this and the matter was adjourned so that the solicitor could prepare an Affidavit dealing with the factual matters in issue. He failed to present that material and, indeed, time set aside to deal with the matter in September 2001 was lost when the solicitor failed to appear at the Tribunal hearing without a satisfactory explanation. Although the Tribunal was not satisfied on the evidence presented that some of the complaints against the solicitor had been established, the overwhelming outcome is a very large number of findings of professional misconduct and in these circumstances the Tribunal takes the view that it is appropriate that the solicitor pay the costs of the Society.
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