Law Society of New South Wales v Curulli

[2008] NSWADT 193

CITATION:	Law Society of New South Wales v Curulli [2008] NSWADT 193
DIVISION:	Legal Services Division
PARTIES:	APPLICANT Council of the Law Society of New South Wales RESPONDENT Anthony Curulli
FILE NUMBER:	072036
HEARING DATES:	8 May 2008
SUBMISSIONS CLOSED:	8 May 2008
DATE OF DECISION:	15 July 2008
BEFORE:	Karpin A - ADCJ (Deputy President); Brennan JWF - Judicial Member; Tingle J - Non Judicial Member
CATCHWORDS:	Solicitor – Disciplinary application
MATTER FOR DECISION:	Principal Matter
LEGISLATION CITED:	Legal Profession Act 2004
CASES CITED:	Briginshaw v Briginshaw (1938) 60 CLR 336
REPRESENTATION:	P Boyd - solicitor In Person
ORDERS:	1. That the name of Anthony Curulli be removed from the Roll of Local Lawyers 2. That the respondent pay the applicant's costs of the proceedings agreed at $2,500.

REASONS FOR DECISION

1 Pursuant to the provisions of section 551 Legal Profession Act 2004, the applicant seeks orders that:

i. The name of the applicant be removed from the Roll of local Lawyers;

ii. The respondent pay the applicant’s costs of the proceedings.

2 The applicant alleges that while practising as a solicitor, the respondent was guilty of professional misconduct, in that he:
1. Wilfully breached section 255 of the Legal Profession Act, 2004.

2. Breached section 264 of the Legal Profession Act, 2004.

3. Misappropriated trust funds.

4. Breached section 262 of the Legal Profession Act, 2004.

3 Following agreed amendments, the applicant particularised those allegations as follows:
In these particulars:-“Solicitor” means Anthony Curulli;“The Receiver” means Jean Sayer; “JS report” means the report of Jean Sayer dated 5 June 2007

A. Stephen Ernest Hoad, Annette Hoad and Fiona Mary Hoad

1. The solicitor acted for the Hoads on the purchase of 69 John Street, Leichhardt.

2. On 11 May 2006 the solicitor received from the Hoads a cheque he had requested for stamp duty in the sum of $25,689.00. Such cheque was deposited to the solicitor’s trust account maintained with Commonwealth Bank at its Brookvale branch.

3. On 25 May 2006 a trust cheque was drawn and debited to the trust ledger account relating to the purchase and shown in the trust records as paid to the Office of State Revenue.

4. On 25 May 2006 the trust cheque in the sum of $25,689.00 was deposited to an account kept by the solicitor with the National Australia Bank at its Brookvale branch styled “Anthony Curulli & Associates Solicitors”. At that date the account had a nil balance.

5. Between 25 May 2006 and 29 May 2006 the sum of $21,896.50 was disbursed from the account. On 30 May 2006 the balance remaining of $3,792.50 was transferred to the solicitor’s General Account kept with the Commonwealth Bank.

6. The solicitor misappropriated the sum of $25,689.00 (less account fees).

B. Anthony Renato Barbalace

1. The solicitor acted for Mr Anthony Renato Barbalace on the purchase of 164 Darling Street, Balmain.

2. On 6 April 2006 the solicitor received from Mr Barbalace a cheque he had requested for stamp duty in the sum of $70,744.00. Such cheque was deposited to the solicitor’s trust account maintained with Commonwealth Bank at its Brookvale branch.

3. On 7 April 2006 a trust cheque in the sum of $4,618.98 drawn on the Account of Mr Barbalace was deposited to an account kept by the solicitor with the National Australia Bank at its Brookvale branch styled “Anthony Curulli & Associates Solicitors”. Prior to the deposit the account had a credit balance of $9.62. Although the payment of $4,618.98 was said to be for costs and disbursements the Receiver could not find in the solicitor’s file any Bill of Costs.

4. On 13 April 2006 a trust cheque in the sum of $971.51 drawn on the Account of Mr Barbalace was deposited to an account kept by the solicitor with the National Australia Bank at its Brookvale branch styled “Anthony Curulli & Associates Solicitors”. Although the payment of $971.51 was said to be for costs and disbursements the Receiver could not find in the solicitor’s file any correspondence or form of accounting in respect of the settlement of the purchase.

5. On 13 April 2006 a trust cheque in the sum of $25,000.00 drawn on the Account of Mr Barbalace was paid to Lamio Masonry being a company owned by Mr Barbalace. Mr Barbalace had loaned the solicitor the sum of $50,000 and the $25,000.00 represented part repayment of the loan.

6. On 21 April 2006 a trust cheque in the sum of $1,273.26 drawn on the Account of Mr Barbalace was paid to CP & RA Dolahenty. The payment was made to redress a deficiency in their trust funds when they were used to pay interest on the loan referred to in the previous paragraph.

7. On 24 April 2006 a trust cheque in the sum of $38,718.59 drawn on the Account of Mr Barbalace was deposited to an account kept by the solicitor with the National Australia Bank at its Brookvale branch styled “Anthony Curulli & Associates Solicitors”. Prior to the deposit the account was overdrawn to the extent of $373.96.

8. The solicitor misappropriated the sum of $70,744.00 (less fees).

C. Craig Peter Dolahenty and Rachael Lee Dolahenty

1. The solicitor acted for Mr & Mrs Dolahenty on the sale of 28 Stella Street, Collaroy Plateau and a simultaneous purchase.

2. On 30 January 2006 the solicitor received from the purchaser a cheque in the sum of $43,000.00 to be held by him as stakeholder. Such cheque was deposited to the solicitor’s trust account maintained with Commonwealth Bank at its Brookvale branch.

3. On 3 February 2006 a trust cheque in the sum of $1,666.66 drawn on the Account of Mr & Mrs Dolaheny was paid to Lamio being interest due on the loan by Lamio Masonry to the solicitor and previously referred to. The payment was not in any way connected to the affairs of Mr & Mrs Dolahenty.

4. On 21 April 2006 a trust cheque in the sum of $1,273.26 drawn on the Account of Anthony Renato Barbalace was paid to CP & RA Dolahenty. The payment was made to redress, in part, the deficiency in their trust funds referred to in the previous paragraph.

5. On 21 April 2006 a trust cheque in the sum of $393.40 drawn on the Account of Williams Design Associates Pty Limited was paid to CP & RA Dolahenty. The payment was made to complete the redress of the deficiency in their trust funds.

6. The solicitor misappropriated the sum of $1,666.66.

D. Eleanor Joanne Hurley

1. The solicitor acted for Eleanor Joanne Hurley (“Ms Hurley”) on the sale of 11 Parr Avenue North Curl Curl.

2. On 9 June 2005 the solicitor received from the purchaser a cheque in the sum of $91,125.00 to be held by him as stakeholder. Such cheque was deposited to the solicitor’s trust account maintained with Commonwealth Bank at its Brookvale branch.

3. On 28 June 2005 a trust cheque in the sum of $50,000.00 drawn on the Account of Ms Hurley was paid to DS & JL Williams being on account of monies due to Williams Design Associates Pty Limited.

The payment was not in any way connected to the affairs of Ms Hurley. Accordingly the solicitor misappropriated the sum of $50,000.00.

4. On 30 June 2005 a trust cheque in the sum of $14,400.00 drawn on the Account of Ms Hurley was paid to Pacific Multimedia being part of the purchase monies payable by the clients Frazer and Hastings (see matter E below).

The payment was not in any way connected to the affairs of Ms Hurley. Accordingly the solicitor misappropriated the sum of $14,400.00.

5. On 7 July 2005 the sale by Hastings and Frazer settled and pursuant to a direction from the solicitor he received a cheque in the sum of $14,400.00 which he deposited to the trust ledger account of Hastings and Frazer.

6. On 8 August 2005 a cheque in the sum of $14,400.00 (debited to the trust ledger of Hastings and Frazer) was deposited to Ms Hurley’s account with ING.

7. On 8 August 2005 the balance of the deposit which remained in the trust account, namely $12,225.00 was paid into Ms Hurley’s account with ING.

8. On 8 August 2005 the balance due to Ms Hurley (after payment of Agent’s commission) namely $50,000.00 was deposited to her account with ING. To effect such deposit the solicitor borrowed the sum of $50,000.00 from Mr Barbalace as previously referred to. A cheque in the sum of $50,000.00, in favour of “ING Direct” was drawn by Lamio Masonry NSW Pty Ltd.

E. Fiona Hastings and Anthony Frazer

1. The solicitor acted for Ms Hastings & Mr Frazer on the sale of 3/17 Cohen Street, Fairlight and the simultaneous purchase of 8 Birinta Street, Narraweena at the same time acting for the Vendors on the sale of such Narraweena property.

2. On 30 June 2005 a cheque was drawn on the Trust Account, payable to Pacific Multimedia Pty Limited, in the sum of $14,400.00. The payment was made from funds held by the solicitor as stakeholder in matter D above. In fact the payment was made to the Vendors of the Narraweena property and said to have been made by the purchasers of that property.

3. On settlement of the sale of the Fairlight property at the direction of the solicitor a cheque in the amount of $14,400.00 was drawn in favour of the solicitor’s trust account to which it was deposited on 7 July 2005 and credited to the trust ledger account of Hastings and Frazer.

4. On 8 August 2005 a cheque drawn on the Trust Account for $14,400.00 was paid to the ING account of the client (Ms Hurley) to whom it belonged to make good the deficiency in her trust funds.

4 The evidence upon which the applicant relied, consisted of the affidavit of Raymond John Collins sworn 19 October 2007, and the affidavit of Jean Sayer sworn 16 August 2007, both of which were admitted into evidence without objection from the respondent, who appeared in person.

5 The relevant sections of the Legal Profession Act 2004 are:

255 Holding, disbursing and accounting for trust money


(1) A law practice must:

(a) hold trust money deposited in a general trust account of the practice exclusively for the person on whose behalf it is received, and

(b) disburse the trust money only in accordance with a direction given by the person.

Maximum penalty: 50 penalty units.


(2) Subsection (1) applies subject to an order of a court of competent jurisdiction or as authorised by law.

(3) The law practice must account for the trust money as required by the regulations.


262 Deficiency in trust account

(1) An Australian legal practitioner is guilty of an offence if he or she, without reasonable excuse, causes:

(a) a deficiency in any trust account or trust ledger account, or

(b) a failure to pay or deliver any trust money.

Maximum penalty: 200 penalty units.


(2) A reference in subsection (1) to an account includes a reference to an account of the practitioner or of the law practice of which the practitioner is an associate.

(3) In this section:


cause includes be responsible for.

deficiency in a trust account or trust ledger account includes the non-inclusion or exclusion of the whole or any part of an amount that is required to be included in the account.

264 Keeping trust records

(1) A law practice must keep in permanent form trust records in relation to trust money received by the practice.

Maximum penalty: 100 penalty units.

(2) The law practice must keep the trust records:

(a) in accordance with the regulations, and

(b) in a way that at all times discloses the true position in relation to trust money received for or on behalf of any person, and

(c) in a way that enables the trust records to be conveniently and properly investigated or externally examined, and

(d) for a period determined in accordance with the regulations.

6 The respondent was admitted on 13 February 1998. From 1 May 2001 until his practising certificate was suspended on 6 September 2006, he practised as a sole practitioner under the name, Anthony Curulli & Associates at Dale St. Brookvale.

7 On 6 September 2006, Miss Jean Sayer was appointed Receiver for the practice.

8 As at that date, she found a credit balance of $776.70 in the Trust Account maintained by the respondent with the Commonwealth Bank, [“CBA T/A”] Brookvale. The respondent was sole signatory to that account. That credit balance was comprised of a cancelled cheque drawn for payment of stamp duty, and $9.70 which represented a book-keeping error.

9 The respondent had been granted approval for self-stamping by the Office of State Revenue [OSR]. He was allocated a self-stamping client number.

10 In July 2006, the OSR advised the Law Society of New South Wales, that it had detected false stamping of documents by the respondent.

11 At the relevant time, in addition to the Trust Account maintained with the Commonwealth Bank, the respondent maintained a General Account with the same branch of that bank [CBA G/A”]. He also maintained an account with the National Australia Bank [“NAB”] at Brookvale, in the name “Anthony Curulli & Associates Solicitors”.

12 In relation to complaint “A”, the Hoad matter, the evidence adduced by the applicant establishes each of the particulars set out above relevant to that complaint. At the time the cheque for $25,689.00 was deposited into the NAB there was a nil balance in that account.

13 Between 25 and 30 May, the whole of the $25,689.00 was used by the respondent for payment of his personal accounts, or transferred to the CBAG/A, leaving a nil balance in the NAB account.

14 The disbursement of these monies included numerous withdrawals at ATM’s. For example only, on 29 May 2006 the respondent made 5 cash withdrawals totalling $1200.00, all but one occurring at the Brookvale Hotel.

15 On 9 August 2006 the respondent used funds in the account of Knarf Holdings Pty. Limited to pay the outstanding stamp duty together with penalties imposed by the OSR. The respondent advised Miss Sayer that he held a 20% interest in that family company.

16 The Tribunal is satisfied to the requisite standard [Briginshaw v. Briginshaw (1938) 60 CLR 336] that the respondent misappropriated the sum of $25,698.00.

17 In the matter of Barbalace, compliant “B”, the sum of $70,744.00 was received for stamp duty on the contract and transfer, and dealt with in accordance with the relevant particulars set out above.

18 Miss Sayer’s careful report provides evidence of the fact that this sum was dealt with in various ways, none of which accorded with the trust obligations upon which it had been received. The respondent used $25,000 of the funds to partially repay a $50,000 loan he had taken from Mr. Barbalace.

19 $44,309.08 was transferred to the NAB from which substantial sums were withdrawn from ATM’s situated in hotels: $1200.00 on 10 April 2006; $980.00 on 11 April 2006; $600.00 on 24 April; $750.00 on 26 April.

20 The Trust Ledger shows the funds as being disbursed for various purposes, none of which is for the payment of stamp duty. The NAB account was reduced to a nil balance by 27 April 2006.

21 The respondent did not pay the stamp duty. He placed in the file a Certificate of Confirmation of Stamping issued by the OSR which related to another client.

22 The OSR detected the failure to pay the stamp duty and issued a Notice of Assessment for Stamp Duty.

23 On 9 August the stamp duty was paid by the respondent using a cheque purchased by Knarf Holdings Pty. Limited.

24 The Tribunal is satisfied on the evidence adduced by the applicant that each of the alleged particulars has been established. The respondent misappropriated the sum of $70,744.00 in this matter.

25 In the matter of Mr. & Mrs. Dolahenty, complaint “C”, the evidence establishes that the respondent received, as stakeholder, the sum of $43,000 on 30 January 2006, which he credited to the Dolahenty ledger and paid into his Trust Account with CBA.

26 On 3 February 2006 he drew a cheque for $1,666.66 against those funds which he used to pay interest on a loan from Mr. Barbalace.

27 On 21 April 2006 the respondent drew a trust cheque in the sum of $1,273.26 from trust monies in the name of Mr. Barbalace, which was credited to the trust account ledger of the Dolahenty’s to partially redress the debit balance in their trust account funds.

28 On the same date a further trust account cheque was drawn against the trust ledger of Williams Design Associates Pty. Limited in the sum of $393.40, and credited to the Dolahenty Trust ledger, thus redressing the deficiency.

29 The Tribunal is satisfied that the respondent misappropriated the sum of $1,666.66.

30 Complaints “D” and “E” are to be dealt with together as one complaint, in that the facts of “E” elucidate complaint “D”, in which the client was Eleanor Jane Hurley, for whom the respondent acted on the sale of her property at 11 Parr Avenue, North Curl Curl.

31 On 9 June 2005 the respondent received from Mrs. Hurley’s purchaser, the sum of $91,125.00 which he deposited into his Trust Account with the CBAT/A pursuant to his obligations as stakeholder, and credited to the Hurley trust ledger.

32 On 28 June 2005 the respondent misappropriated the sum of $50,000 from those funds by drawing a cheque paid to DS & JL Williams, debited against Mrs. Hurley’s Trust Account ledger.

33 On 30 June 2005 the respondent misappropriated a further sum of $14,400 from Mrs. Hurley’s funds, by drawing a Trust Account cheque payable to Pacific Multimedia being part payment on a purchase by clients Hastings and Frazer, for whom the respondent acted on simultaneous sale and purchase [see particulars “E”].

34 The directions on settlement prepared by the respondent, in the Hastings/Frazer sale included a direction that he receive the sum of $14,400 upon settlement which took place on 7 July 2005. That cheque was paid into the respondent’s Trust Account and credited to the Hastings/Frazer ledger.

35 On 8 August the respondent drew a Trust Account cheque in the sum of $14,400 against the Hastings/Frazer ledger which was deposited to Mrs. Hurley’s account with ING, thus repaying the sum that the respondent had misappropriated on 30 June.

36 On the same date the balance remaining in the respondent’s Trust Account to the credit of Mrs. Hurley ($12,225) was paid to her account with ING.

37 On the same date the sum of $50,000 that the respondent had misappropriated on 28 June 2005, was paid into Mrs. Hurley’s account with ING. In order to effect this payment, the respondent borrowed the sum of $50,000 from Mr. Barbalace. A cheque was drawn on the account of Lamio Masonry NSW Pty.Ltd, a company with which Mr. Barbalace was associated. That cheque was payable to ING.

38 The Tribunal is satisfied that in the matter of Hurley, the respondent misappropriated the sum of $64,400.

39 In each of these matters of complaint, the material contained in Miss Sayer’s report clearly discloses the relevant transactions.

40 Miss Sayer’s report also discloses that in the matter of Barbalace, no bill of costs could be located in relation to sums of $4618.98 and $971.51 transferred from the Trust Account to the respondent’s General Account as “Costs and Disbursements.”

41 The Tribunal is satisfied that in each of the 4 matters “A” to “D” inclusive, the respondent breached section 255 of the Legal Profession Act 2004[ LPA] by failing to hold trust monies exclusively for the persons on whose behalf it was received, and disbursed those monies other than in accordance with his clients directions.

42 In each case substantial deficiencies occurred in the respondent’s Trust Account in breach of section 262 of the LPA.

43 The respondent failed to maintain his Trust Account records in accordance with his obligations pursuant to section 264 LPA.

44 In each case the respondent misappropriated Trust monies.

45 The respondent’s conduct was disgraceful and dishonourable leading to the inevitable finding that his behaviour constitutes professional misconduct.

46 The Tribunal is aware that, with the exception of Mr. Barbalace, who has not recovered all the monies due to him, no other clients suffered any ultimate loss of funds. That is of little comfort having regard to the manner in which the respondent conducted himself.

47 These misappropriations occurred over a period of approximately 12 months during which time the respondent engaged in considerable deception to cover the deficiencies in funds.

48 The respondent was present throughout the hearing. He acknowledged that his name would be struck from the roll. He filed no material in response to the applicant’s material, and did not seek to be heard on the issues before the Tribunal.

49 The parties agreed that the respondent would pay the applicant’s costs assessed at $2,500.

50 Protection of the public and maintaining the standards of the profession requires an order that the respondent’s name be struck from the Roll of local Lawyers.

Orders:

1. The name of Anthony Curulli be removed from the Roll of local Lawyers

2. The respondent to pay the applicant’s costs in the sum of $2,500.