Law Society of New South Wales v Hampton

[2001] NSWADT 31

CITATION:	Law Society of New South Wales -v- Hampton [2001] NSWADT 31
DIVISION:	Legal Services Division
PARTIES:	APPLICANT Council of the Law Society of New South Wales RESPONDENT Michael John Hampton
FILE NUMBER:	002010
HEARING DATES:	19/01/2001
SUBMISSIONS CLOSED:	01/19/2001
DATE OF DECISION:	01/19/2001
BEFORE:	Clisdell RJ - Judicial Member; Foster GF - Judicial Member; Costigan M - Member
APPLICATION:	Professional Misconduct - act without instructions - Professional Misconduct - breach of s. 61 of the Legal Profession Act - Professional Misconduct - charge fees for services never performed - Professional Misconduct - conviction for offences of dishonesty - Professional Misconduct - gross negligence and delay/gross delay/delay - Professional Misconduct - misappropriate trust moneys/moneys - Professional Misconduct - mislead Law Society/Bar Association/LSC - Professional Misconduct - mislead Solicitor
MATTER FOR DECISION:	Principal matter
LEGISLATION CITED:	Legal Profession Act 1987 Crimes Act 1900
CASES CITED:	The Law Society of NSW v. Foreman (1994) 34 NSWLR 408
REPRESENTATION:	APPLICANT D Barton, solicitor RESPONDENT No appearance
ORDERS:	1. That the name of Michael John Hampton be removed from the Roll of Legal Practitioners in New South Wales; 2. That the solicitor pay the costs of the Law Society of NSW as agreed or as assessed.

1 By Information dated the 30th of June 2000 the Council of the Law Society of New South Wales (“the Society”) claimed that Michael John Hampton (“the Solicitor”] was guilty of professional misconduct. The Information as filed set out six grounds upon which the Society relied. At the commencement of the hearing the Society sought and was granted leave to amend Ground 1 of the Information. As a consequence of that leave the Society relied not on the conviction of the Solicitor on each of four charges of dishonesty but on the conduct of the Solicitor which resulted in such convictions.

2 The Solicitor did not appear at the hearing and the Tribunal had before it a letter from the Solicitor dated to the 18th of January 2001. The letter set out the Solicitor’s consent to all orders sought by the Law Society including costs as agreed or taxed.

3 The grounds set out into the Information as amended are as follows:

1. The Solicitor engaged in conduct which resulted in his conviction on the 27th of June 1997 by Mr. M. Beveridge, Magistrate sitting at the Downing Centre Local Court on each of four charges of dishonesty.

2. The Solicitor breached Section 61 of the Act in relation to Susan Fraser.

3. In relation to Graham Knott the Solicitor:

(a) acted without instructions.
(b) misled the Solicitor for the plaintiff.

4. The Solicitor misappropriated monies from Harris Wheeler ( his employers ) in respect of the matters of G and M. Faye, Darcy, Nathan Thorley, and Graham Knott.

5. In relation to the matter of Teresa Pantalone and Joanne Sternbeck the Solicitor misled, or attempted to mislead the complainant, Mr. Ian McNaughton, and misled or attempted to mislead the Society in asserting that monies in a particular sum were received into trust and a cheque drawn in favour of the complainant and forwarded by post.

6. In relation to Mr. MacFadyen:

(a) The Solicitor misled or attempted to mislead the complainant regarding contact with a witness crucial to the Federal Court proceedings in which the Solicitor was representing the complainant.
(b) The Solicitor was guilty of gross neglect, delay and incompetence in conducting the said Federal Court litigation for the complainant.
(c) The Solicitor was guilty of charging the complainant fees, or causing the complainant to be charged fees, for services the Solicitor had never performed.

4 The particulars relied upon by the Society are contained in the Schedule to the Information and are as follows:

1. The Solicitor engaged in conduct which resulted in his conviction on 27 June 1997 by Mr M Beveridge, Magistrate sitting at the Downing Centre Local Court on each of four charges of dishonesty.

(a) (i) Charge: Obtain money/financial advantage by deception; breach of S.178BA of the Crimes Act, 1900.
(ii) Facts: That on or about 13 March 1995, at Newcastle, Michael John Hampton dishonestly obtained for himself a financial advantage to wit a credit balance of $350.00 by deceiving his employer, Messrs Harris Wheeler, Solicitors to pay him the said sum of money to which he was not entitled.
(iii) Compensation: $350.00
(b) (i) Charge: Obtain money/financial advantage by deception; breach of S.178BA of the Crimes Act, 1900.
(ii) Facts: That on or about 20 October 1994 at Newcastle, Michael John Hampton dishonestly obtained for himself a financial advantage to wit a credit balance of $700.00 by deceiving his employer, Messrs Harris Wheeler, Solicitors to pay him the said sum of money to which he was not entitled.
(iii) Compensation: $700.00
(c) (i) Charge: Obtain money/financial advantage by deception; breach of S.157 of the Crimes Act, 1900.
(ii) Facts: That between 24 July 1994 and 28 July 1994, at Broadmeadow. Michael John Hampton, then being a servant of Messrs Harris Wheeler, Solicitors, did by virtue of his employment and while he was employed, receive and take into his possession certain money to wit the sum of $500.00 for and in the name and on the account of Messrs Harris Wheeler, his master and did then fraudulently embezzle the said moneys.
(iii) Compensation: $500.00
(d) (i) Charge: Make false/misleading, statement with intent to obtain advantage; breach of S.178BB of the Crimes Act, 1900.
(ii) Facts: That on or about 17 July 1995, at Newcastle, Michael John Hampton, with intent to obtain for himself or another person a financial advantage to wit the payment of $1,466.00 published a cheque requisition which was false or misleading in a material particular and was made with a reckless disregard as to whether it was true or false or misleading in a material particular.
The Solicitor was ordered to pay compensation and sentence deferred upon the (sic) entering into of a recognisance himself in the sum of $2,000.00 to be of good behaviour for a period of three years and to appear for sentence if called upon for not complying with the bond in that time.

2. The Solicitor breached Section 61 of the Act in relation to Susan Frazer.

(i) Harris Wheeler acted on behalf of Susan Frazer in relation to an application relating to unfair dismissal and the Solicitor was employed by Harris Wheeler and had carriage of the matter at all relevant times.
(ii) The matter settled and moneys paid pursuant to the settlement were received to Harris Wheeler's trust account on 4 July 1994.
(iii) On or about 19 July 1995 the Solicitor caused a cheque to been drawn on those funds in the sum of $1,466.00 payable to a Mr N Johnson.
(iv) The Solicitor did not have a direction or authority from the client for a cheque to be drawn in favour of Mr Johnson.
(v) On or about 20 December 1995 the Solicitor wrote to the client indicating that Counsel's fees were in the sum of $2,500.00 and that Harris Wheeler's costs were in the sum of $4,516.90. In fact, Counsel's fees amounted to $380.40 and Harris Wheeler's costs amounted to $2,861.50.
(vi) The Society relies upon the misleading terms of the letter dated 20 December 1995 from the Solicitor to the client and the Solicitor's course of conduct during which the Solicitor showed a reckless disregard towards the interests of his client, as evidence of a wilful breach of Section 61 of the Act.

3. In relation to Graeme Knott the Solicitor:

(a) Acted without instructions.
(i) Harris Wheeler acted on behalf of Graeme Knott in relation to a debt claimed by Decca Holdings Pty Limited. The Solicitor was employed by Harris Wheeler and had carriage of the matter at all relevant times.
(ii) On or about 29 September, 1994, the Solicitor signed terms of settlement pursuant to which his client was obliged to pay the sum of $2,400.00 to the plaintiff.
(iii) The Solicitor did not have instructions to settle on those terms or on any terms.
(b) Misled the Solicitor for the Plaintiff.
(i) On or about October 1994, the Solicitor informed Mr Titus, a Solicitor and principal of Messrs Verekers ("Verekers"), the plaintiff’s Solicitors, that he was awaiting delivery of a cheque from his client Mr Knott in satisfaction of settlement and costs. The conversation took place by telephone.
(ii) No such cheque had been received by Harris Wheeler.
(iii) By letter dated 10 November 1994, Mr Titus referred to the terms of the telephone conversation and this was not contradicted by the Solicitor.
(iv) On or about 17 November, 1994, the Solicitor had a telephone conversation with Marion Edwards, who was secretary to Mr Titus, in which he stated that he had received a cheque from his client Mr Knott being a payment for settlement moneys and Harris Wheeler's costs.
(v) On or about 13 December 1994, the Solicitor had a telephone conversation with Mr Titus in which he stated that there was a dispute between Harris Wheeler and their client as to costs.
(vi) There was no such dispute.
4. The Solicitor misappropriated moneys from Harris Wheeler (his employers) in respect of the matters of G & M Fahy, Darcy, and Nathan Thorley Graeme Knott.
(a) Gerald and Mary Fahy
(i) Harris Wheeler acted on behalf of Gerald and Mary Fahy in relation to a defamation matter and the Solicitor was employed by Harris Wheeler and had carriage of the matter at all relevant times.
(ii) On or about 13 March, 1995, the Solicitor caused a cheque to be drawn on Harris Wheeler's office account payable to the Westpac Bankine, Corporation in the sum of $350.00 purportedly for production of documents in relation to the defamation matter.
(iii) The Solicitor paid the cheque to his own bank account.
(iv) The Solicitor caused the cheque to be drawn with the intention of defrauding the firm.
(b) Lewis Noel and Gwyneth Fay Darcy
(i) Harris Wheeler acted on behalf of Lewis Noel and Gwyneth Fay Darcy in relation to the Estate of Frank Perrott and the Solicitor was employed by Harris Wheeler and had carriage of the matter at all relevant times.
(ii) On or about 20 October, 1994, the Solicitor caused a cheque to be drawn on Harris Wheeler's office account payable to himself in the sum of $700.00 purportedly for reimbursement of filing fees paid in relation to the clients' matter.
(iii) The Solicitor cashed the cheque and retained the moneys for his own use.
(iv) The Solicitor caused the cheque to be drawn with the intention of defrauding, the partners of Harris Wheeler.
(c) Nathan Thorley
(i) Harris Wheeler acted on behalf of a juvenile in relation to a criminal prosecution. The juvenile's father was Nathan Thorley. The Solicitor was employed by Harris Wheeler and had carriage of the matter at all relevant times.
(ii) Between 24 July 1994 and 28 July 1994 Nathan Thorley paid the Solicitor a sum of money in cash, exceeding $500.00, against his liability for costs and disbursements in his son's matter.
(iii) The Solicitor retained $500.00 for his own use and paid the balance to Harris Wheeler in part satisfaction of the firm's costs and disbursements.
(iv) The Solicitor was not entitled to retain the moneys.
(d) Graeme Knott
(i) The Society repeats particulars 3(a)(i) to 3(b)(vi).
(ii) On or about 3 April 1995, the Solicitor requisitioned a Harris Wheeler office account cheque in the sum of $1,000.00 drawn in favour of Verekers.
(iii) The terms of the requisition indicated that the moneys were to be attributed as a payment to Verekers for agency fees in miscellaneous matters.
(iv) As a result of the requisition, a cheque dated 6 April 1995 was drawn on Harris Wheeler's office account in favour of Verekers in the sum of $1,000.00.
(v) No such amount was due to be paid by Harris Wheeler to Verekers.
(vi) On or about 21 April 1995, the Solicitor requisitioned a Harris Wheeler office account cheque in the sum of $1,940.00 drawn in favour of Verekers.
(vii) The terms of the requisition indicated that the moneys were to be attributed as a payment for another client of Harris Wheeler's, Labestka Pty Limited, for agency and photocopy expenses in a matter unrelated to Mr Knott's litigation.
(viii) As a result of the requisition, a cheque dated 21 April 1995 was drawn on Harris Wheeler's office account in favour of Verekers in the sum of $1,940.00.
(ix) The Solicitor caused the cheque to be forwarded to Verekers as payment of settlement moneys on behalf of Mr Knott.
(x) No such amount was due to be paid to Verekers by either Harris Wheeler or Labestka Pty Limited.
5 . In relation to the matter of Theresa Pantalone and Joanne Sternbeck, the Solicitor misled or attempted to mislead the complainant, lan McNaughton, and misled or attempted to mislead the Society in asserting that moneys in a particular sum were received into trust and a cheque drawn in favour of the complainant and forwarded by post.
(i) Harris Wheeler acted on behalf of Theresa Pantalone and Joanne Sternbeck, who had traded as Lakeside Curtain Centre, in relation to an action for defamation and in relation to various debts. The Solicitor was employed by Harris Wheeler and had carriage of the matters at all relevant times.
(ii) Dr McNaughton and his wife, Mrs McNaughton, were creditors of Ms Pantalone and Ms Sternbeck.
(iii) On or about 1 1 August, 1994, Dr McNaughton was informed by the Solicitor in the course of a telephone conversation that the Solicitor had forwarded a cheque drawn in the sum of $800.00 (said by the Solicitor to be drawn on moneys received by Harris Wheeler on behalf of Ms Pantalone and Ms Sternbeck) to Dr McNaughton's residential address.
(iv) No such cheque was received by Dr McNaughton.
(v) On or about 30 August 1994, Dr McNaughton was informed by the Solicitor in the course of a telephone conversation that the Solicitor had discovered that the cheque was still on the file.
(vi) On or about 6 September 1994, Dr McNaughton was informed by the Solicitor in the course of a telephone conversation that the cheque had been posted to Dr McNaughton.
(vii) On or about 13 September 1994, Dr McNaughton was informed by the Solicitor in the course of a telephone conversation that the cheque had been posted to Dr McNaughton.
(viii) By letter dated 21 December, 1994, the Solicitor, in responding to Dr McNaughton's complaint, indicated to the Law Society that, at around the time of speaking, to Dr or Mrs McNaughton, a sum of $796.00 was received by Harris Wheeler on behalf of Ms Pantalone and Ms Sternbeck and paid to trust.
(ix) No such sum was paid to Ms Pantalone and Ms Sternbeck's trust account at that time.
(x) By letter dated 24 Aucust, 1995, the Solicitor, in responding further to Dr. McNaughton's complaint, indicated to the Law Society that a cheque had been sent to Dr McNaughton's residential address.
(xi) No such cheque was drawn in the period July, August or September, 1994 by Harris Wheeler on its trust account in favour of Dr or Mrs McNaughton.
(xii) During the period July, August and September, 1994 the balance held by Harris Wheeler in its trust account maintained on behalf of Ms Pantalone and Ms Sternbeck, trading as Lakeside Curtain Centre, did not exceed a sum of $400.00.
6. MacFadyen
Harris Wheeler acted on behalf of Ivan MacFadyen and his business entity Hellova Pty Limited in relation to an action for recovery of debt and in the defence of an action for breach of copyright. The Solicitor was employed by Harris Wheeler and had carriage of the matters at all relevant times.
(a) The Solicitor misled the complainant on or about 13 December, 1995 when he informed the complainant in a telephone conversation that he had spoken to a witness, Roger Stokes, in order to draft an affidavit for the witness to swear when he had not spoken to the witness at all.
(i) On or about 13 December 1995 the Solicitor informed the complainant during a telephone conversation that he had spoken to a witness, Roger Stokes, and would forward to the complainant a copy of an affidavit drafted as a result of the conversation with Mr Stokes.
(ii) By letter dated 12 December 1998 the Solicitor forwarded to the complainant a copy of a draft affidavit for Mr Stokes.
(iii) The Solicitor had not spoken to or communicated in any way with Mr Stokes.
(b) The Solicitor was guilty of gross neglect, delay and incompetence in the following particulars:
(i) He failed to attend court or arrange for the complainant to be otherwise represented at directions hearings in 1995 on 28 August, 13 and 24 October and 7, 14 and 17 November.
(ii) He failed to comply with court directions made on 16 May 1995 and thereafter on 24 July, 28 August, 13 October, 27 October, 7 November and 14 November 1995.
(iii) He delayed in complying with court directions made on 16 May, 1995 and thereafter on 24 July, 28 August, 13 October, 27 October, 7 November and 14 November, 1995.
(c) The Solicitor was guilty of rendering bills to the complainant or causing bills to be rendered to the complainant for services he had never rendered in the following particulars:
(i) In the bill dated 6 October, 1995, he charged for attendance at court for directions hearing on 6 September, 1995 when there was no such attendance as the matter was not in court on that day.
(ii) Charging in the same bill for disbursements for travel to Sydney for such attendance at court when no travel was required.

5 The evidence in support of the Information was contained in the affidavits of Raymond John Collins sworn 2nd September 1998, Warren Gillett sworn 27th August 1998, Michael Vincent Stephen O’Brien sworn 22nd June 1999, Ingrid Jane Hepworth sworn 16th June 1999, Roger Frank Stokes sworn 6th August 1999 and Ivan MacFadyen sworn 3rd June 1999.

6 In his letter to the Society the Solicitor did not oppose the orders sought by the Society. Unfortunately the Tribunal did not have the opportunity of hearing from the Solicitor in relation to any objective matters that the Solicitor could have put before the Tribunal nor did the Tribunal have the opportunity of hearing from the Solicitor on the question of penalty.

7 The applicable principles are well settled and may be conveniently found in The Law Society of NSW v. Foreman (1994) 34 NSWLR 408, particularly Kirby, P p. 412B-E; Mahoney, JA pp. 441-446; Giles, AJA pp. 47OG-472G). Of particular assistance in this case is the passage at p. 44 per Mahoney, JA: "The disciplinary jurisdiction remains one concerned with whether the Solicitor is a fit and proper person to be held out by the Court as such ...In deciding whether a person is a fit and proper person for this purpose, the Court may, in accordance with the circumstances, take into account matters going beyond the mere protection of the public against similar misconduct. The Court may consider the character of the practitioner, or those aspects of it relevant to the office of a Solicitor. It is also, I think, relevant for the Court to take into account the effect which its order will have upon the understanding, in the profession and amongst the public, of the standard of behaviour required of Solicitors. The Court will no doubt, where appropriate, articulate the standards required and that they are high. However, the Court must, 1 think, also take into account the effect upon what it has said of, for example, a decision to allow a Solicitor guilty of a serious infringement of those standards, to continue to practice. The Court may also have regard to whether, in the light of the offence in question, the Solicitor can establish and maintain the kind of relationship which must exist between Solicitors."

8 Also at p. 471 B per Giles, AJA: "But the object of protection of the public also includes deterring the legal practitioner in question from repeating the misconduct, and deterring others who might be tempted to fall short of the high standards required of them. And the public, and professional colleagues who practice in the public interest, must be able to repose confidence in legal practitioners, so an element of deterrence is an assurance to the public that serious lapses in the conduct of legal practitioners will not be passed over or lightly put aside, but will be appropriately dealt with."

9 In light of these principles the Tribunal has given careful consideration to the appropriate orders to be made having regard to the whole of the evidence before it.

10 The Tribunal is satisfied that each of the grounds relied upon by the Society constitute professional misconduct on the part of the Solicitor. There can be no doubt that the professional misconduct of the Solicitor was very serious. The Solicitor misled clients, acted without instructions, misled the Society, was guilty of gross neglect and overcharging. In relation to the criminal matters to which he pleaded guilty he knew that what he was doing was dishonest. The Tribunal recognises that the circumstances require that it should take into account matters going beyond the mere protection of the public against similar misconduct by the Solicitor. The object of deterrence is also an important factor in this case.

11 It is the opinion of the Tribunal that the Solicitor's infringement of the fundamental standards of his profession is such that he should not be permitted to practice. Accordingly, the Tribunal finds that the Solicitor is not a fit and proper person to remain on the roll of legal practitioners. His name should be removed from the roll.

12 The Tribunal orders:

That the name of Michael John Hampton be removed from the Roll of Legal Practitioners in New South Wales.

That Michael John Hampton pay the costs of the Law Society of New South Wales as agreed or as assessed.