Law Society of New South Wales v Hill

[2002] NSWADT 190

CITATION:	Law Society of New South Wales -v- Hill [2002] NSWADT 190
DIVISION:	Legal Services Division
PARTIES:	APPLICANT Council of the Law Society of New South Wales RESPONDENT Dennis Ian Hill
FILE NUMBER:	012032
HEARING DATES:	18/06/02, 19/06/02
SUBMISSIONS CLOSED:	06/19/2002
DATE OF DECISION:	09/30/2002
BEFORE:	Brennan JWF - Judicial Member; Pheils J - Judicial Member; Klika D - Member
APPLICATION:	Professional Misconduct - breach of s. 61 of the Legal Profession Act - Professional Misconduct - misappropriate trust moneys/moneys
MATTER FOR DECISION:	Principal matter
LEGISLATION CITED:	Administrative Decisions Tribunal Act 1997 Legal Profession Act 1987
CASES CITED:	Barwick -v- Law Society 2000HCA2 Murray -v- Legal Services Commissioner 1999 NSW CA70 Allinson -v- The General Council of Medical Education and Registration 1894 1QBD750 Re Vickery 1931 1CL572 Re Hodgkiss 1962 62SRNSW 340 The Law Society of NSW -v- Bannister 1993 4LPDR24 Legal Services Commissioner -v- Musgrave 2000 NSWADT149 Re Radin 1993 NSW LST19
REPRESENTATION:	APPLICANT I Wales SC, barrister RESPONDENT No appearance
ORDERS:	1. That the name of Dennis Ian Hill be removed from the Roll of Legal Practitioners of the Supreme Court of New South Wales; 2. That Dennis Ian Hill pay the costs of the Applicant Society of and incidental to these proceedings; 3 That within twenty eight (28) days of this order, pursuant to Section 171D of the Legal Profession Act, Dennis Ian Hill pay by way of compensation the sum of $3,290.00 to Dobrinka Vuic and the sum of $1,550.00 to Lillah Anon.

Complaint
1 By information filed 13 December 2001 the Council of the Law Society of New South Wales (“the Society”) informed the Tribunal that as a result of Council’s investigation of complaints made under Part 10 of the Legal Profession Act against Dennis Ian Hill a legal practitioner (“the solicitor”) the Council claims that the solicitor while practising as a solicitor was guilty of professional misconduct.

2 There were two grounds of complaint, they being:

(1) The solicitor wilfully breached Section 61 of the Legal Profession Act 1987; and
(2) The solicitor misappropriated Trust moneys.
3 Particulars of the professional misconduct alleged were detailed in the Information and are referred to subsequently.

4 Two of the clients of the solicitor claimed orders for compensation under Section 171D of the Act against the solicitor and those claims were detailed in the Information.

5 The Society sought orders that:

(1) The solicitor’s name be removed from the Roll of Legal Practitioners;
(2) The solicitor pay the costs of the Society of and incidental to the filing and hearing of the Information;
(3) Such further order as to the Tribunal seems fit.
Non-attendance of solicitor at hearing
6 The solicitor did not attend the hearing. Two Affidavits of Service by a licensed commercial agent were filed by the informant and these deposed to personal service on the solicitor on 25 November 2001 of the Information and Application, an Affidavit of Raymond Collins and a letter from the Society to the solicitor of 22 November 2001.

7 There is a further Affidavit of Service by the same licensed commercial agent sworn on 4 January 2002 deposing to personal service on the solicitor on 26 December 2001 of a letter from the Society dated 21 December 2001,the Affidavit of Jean Sayer sworn 22 September 2001, the Affidavit of Dobrinka Vuic sworn 28 October 1998 , the Affidavit of Lillih Anon sworn 16 September 1999, the Affidavit of Dragon Spasic sworn 10 September 1999 and the Affidavit of Raymond Collins sworn 21 December 2001.

8 A letter from the Society of 5 March 2002 to the solicitor was admitted into evidence. This letter advised of directions given by the Presiding Member of the Tribunal that day in relation to claims for compensation against the solicitor and the further mention of the matter on 8 April 2002.

9 A further letter admitted into evidence was the letter from the Society to the solicitor dated 8 April 2002. This letter advised of the further directions of 8 April 2002 and the Tribunal’s clear requirement that the solicitor file any Affidavits, including experts’ Affidavits by 29 April 2002.

10 All appropriate notices of the hearing and of the directions given were provided to the solicitor.

11 Oral evidence was also given by Mr Louis Pierotti of the Professional Standards Division of the Society. Mr Pierotti spoke to the solicitor on 1 March 2002 when Mr Pierotti, having identified the solicitor, told him that he was going to seek a hearing date. The solicitor informed Mr Pierotti that he really didn’t care and that he was going bankrupt.

12 There is also evidence of various efforts made by the Society to contact the solicitor. The Tribunal is satisfied that the nature of the proceedings and the orders sought were properly brought to Mr Hills’ attention and he has been duly served with all necessary papers. The Tribunal is also satisfied that he was aware that the matter was to be dealt with on the dates on which it was listed for hearing and indicated a lack of interest in the proceedings.

13 In all the circumstances the Tribunal found that it was appropriate for the matter to proceed to resolution in the absence of the solicitor.

Compliance with Statutory Requirements
14 There were prior proceedings instituted in relation to the solicitor which were discontinued when it became apparent that the Society had failed to comply with the requirements of the Legal Profession Act after consideration of the decision of the High Court of Australia in Barwick -v- Law Society 2000 HCA2.

15 On 28 September 2000 the Society wrote to the solicitor advising of procedural difficulties in relation to the prior proceedings and advised of the consideration being given them to seeking to make complaints out of time. The letter clearly drew the solicitor’s attention to the process and invited the solicitor to make submissions as to whether or not the Council of the Society should exercise its discretion to accept the complaints being made out of time pursuant to s137.

16 On 22 November 2000 the Professional Conduct Committee of the Society resolved that the complaints involved allegations of professional misconduct and that it was in the public interest to deal with those complaints notwithstanding that they related to conduct which occurred more than three years previously. The Committee resolved to make those complaints pursuant to Section 134 (2) of the Act.

17 By letter dated 27 November 2000 the solicitor was advised by the Society of the making of the complaints and the material proposed to be relied upon. The solicitor was asked to provide a written response to the complaints. On the same day the Society wrote to the Legal Services Commissioner advising of the complaints and enclosing a copy of the letter to the solicitor. There was no response by the solicitor who failed to take advantage of the invitation extended to him to respond.

18 On 10 May 2001 the complaints were considered by the Professional Conduct Committee of the Law Society. The Committee resolved:

“ RESOLVED that the Solicitor be informed of:-
1. The issues of professional misconduct which, in the opinion of the Committee, are involved in the complaint and in respect of which the Committee invites submissions within 14 days of the date of the letter notifying the legal practitioner of these resolutions; and
2. The Committee’s opinion that, subject to any submissions and to further consideration, it should resolve that it is satisfied there is a reasonable likelihood the Legal Practitioner will be found guilty by the Tribunal and that proceedings be instituted in the Tribunal with respect to the complaint pursuant to Section 155(2) of the Legal Profession At, 1987.
Professional Misconduct
i. The Solicitor wilfully breached s.61 of the Legal Profession Act 1987.
ii. The Solicitor misappropriated trust moneys.
The particulars of the complaints are more fully set out in the attached document headed “Particulars”
3. It is the Committee’s opinion that, subject to any submissions, the appropriate orders to be sought on a referral to the Tribunal of this complaint are as follows:
(a) The Legal Practitioner’s name be removed form the Roll of Legal Practitioners.
(b) The Legal Practitioner pay the costs of the Informant of and incidental to the filing and hearing of the Information.
(c) Such further orders as to the Tribunal seems fit.
4. Consideration of this complaint is to be placed on the agenda of the whole of the Professional Conduct Committee as soon as practicable after the expiration of 14 days from the date of the letter notifying the solicitor of these resolutions.
(5) The letter notifying the solicitor is to be sent by pre-paid post on or within 24 hours of the date of that letter.”
19 The Society’s letter advising the Solicitor of this resolution was dated 17 May 2001 and it concluded:
“I attach a copy of the document headed ‘Particulars’ which, you will note, represents the Particulars to the complaints earlier referred to the Tribunal.
Please let me have your submissions within the time stipulated in the Committee’s resolution.”
20 On 14 September 2001 the Society wrote to the solicitor confirming that the Society’s investigations included complaints by individuals that had been made or referred to the Society and relevant correspondence was forwarded to the solicitor. Copies of relevant correspondence in relation to the complaints were enclosed and the letter referred to the earlier information and supporting material filed with the Tribunal and the material provided by Ms Jean Sayer which had been provided to the solicitor. The solicitor was invited to make submissions to the Committee before 27 September 2001. The Court of Appeal in Murray -v- Legal Services Commissioner 1999NSW CA70 dealt significantly with the issue of procedural fairness. Sheller JA with whom Stein JA agreed:
“In my opinion proper performance of the duty and proper exercise of the powers conferred on the solicitor by Section 155 require that before the Commissioner completes an investigation into the complaint against the legal practitioner and decides how in accordance with Section 155 the complaint is to be dealt with the legal practitioner be given the opportunity to see a copy of the complaint and to answer it and to advance argument against it in favour of the lesser charge than that of professional misconduct or in mitigation. This would enable the legal practitioner to submit that the Commissioner should be satisfied that there was no reasonable likelihood that the legal practitioner would be found guilty by the Tribunal either of unsatisfactory professional conduct or professional misconduct and that the complaint should be dismissed under subsection (4).”
21 The Tribunal is satisfied that the Society fulfilled all its obligations in relation to notice investigation and procedural fairness throughout the conduct of the complaint procedure and the steps leading up to and including the commencement of the hearing. Copies of relevant correspondence between the Society and the Legal Services Commissioner and a series of letters between the Society and the solicitor were all tendered.

22 In the course of the hearing, the Tribunal stressed that the jurisdiction was statutory and the conditions precedent to the Tribunal exercising jurisdiction as enunciated in cases such as Murray supra and Barwick -v- Law Society of NSW (2000 HCA2) had to be satisfied before the Tribunal could consider the substantive issues. Resolutions and much, but not all, of the required material was included in the Affidavit evidence tendered on behalf of the Society. The Society produced additional material in the form of copies of correspondence and having examined and considered all this material, the Tribunal is satisfied that the Information was properly brought and all formalities satisfied so that the Tribunal was able to deal with the complaint and the claims for compensation.

Legislation
23 S61 of the Legal Profession Act is in the following terms:

“61. Money received by solicitor on behalf of another:
A solicitor who, in the course of practising as a solicitor in this State, receives money on behalf of another person:
(a) must pay the money, within the time prescribed by the regulations, into a general trust account in New South Wales at an app-roved 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.
(2) In any of those there 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.
(3) This section:
(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.
(4) A lien referred to in subsection (3) (d):
(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.
(5) Money received by a solicitor on behalf of another person:
(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,
unless the creditor is the person on whose behalf the money is held by 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 o9r 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:
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)(c) 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).
(10) A reference in subsection (1) to a third party does not include a reference to an associate of a solicitor.
Dobrinka Vuic
24 The particulars in relation to this client and in relation to the other six clients of the solicitor who were the subject of complaint all related to wilful breaches of Section 61 and misappropriation.

25 The solicitor acted for Mrs Vuic in relation to two third party claims and the matters were heard together. One claim was successful and the other failed. The solicitor received verdict moneys of $29,563.46 on 12 June 1992 and the same day withdrew $6,000.00 from the ledger account for the matter in his Trust Account without having rendered a bill of costs or obtaining any authority from the client. On that same day he paid Mr M Gray, an interpreter, the sum of $1,100.00 and a little later, on 5 August 1992, paid Mr Gray a further sum of $2,190.00. The Society claims that the payments to Mr Gray exceed any amount which might properly have been due to him.

26 The Society relied upon an Affidavit of Jean Sayer and an Affidavit of Mrs Vuic. Ms Sayer was appointed to investigate the affairs of the practice of the solicitor and his partners and relevant parts of her report relating to the seven clients mentioned in the complaint were annexed to her Affidavit.

27 Ms Sayer found in the solicitor’s instruction file an original bill of costs addressed to the client dated 3 June 1992 which was identical to the party/party bill submitted to the GIO except that the profit costs had been reduced by $1,000.00 from $7,500.00 to $6,500.00. The solicitor did submit a party/party bill to the Solicitor for the GIO dated 3 June 1992, albeit referring to the unsuccessful rather than successful proceedings. That account was for $13,862.00 of which the solicitor received $10,400.00 from the GIO. Ms Sayer could not find a Trust ledger card in the Trust ledger of the firm for this matter. She found a photocopy of the ledger card up to 30 June 1992 and reconstructed the ledger for the balance of the period that the moneys were held.

28 Amongst the moneys drawn on this Trust ledger was a payment of $7,000.00 noted as “W. Berkman – payment by authority”. This cheque was signed by the solicitor and then opened by one of his partners with the endorsement “Please pay cash”. The cheque was cashed. There was no authority for the payment.

29 Mrs Vuic complained amongst other things of the two payments made to Mr Gray. She denies giving any authority for moneys to be paid to Mr Gray whom she regarded as her contact with the firm. She stated “He was employed at the firm and would ensure that my matters would be promptly attended to. Mr Gray was known amongst my acquaintances as a man who would ensure that matters such as mine were promptly attended to.”

30 The evidence clearly established that the solicitor drew moneys from his Trust account without first obtaining his client’s authority and without providing his client with an accounting or indeed a bill. There can be no issue then that he had no right to do this and the solicitor’s acts cannot be seen as being other than wilful. These are breaches of S61(1) and (2) and money has been misappropriated.

Melka Jarasagic
31 The solicitor acted for Ms Jarasagic in relation to a claim arising out of an accident which occurred on 20 July 1987. The case was heard on 15 April 1992 and there was a verdict for the client in the sum of $49,259.73 plus costs. The costs of $9,000.00 were received from the GIO and paid to the solicitor’s Trust Account on 28 July 1992.

32 On 29 July 1992 in this matter, the solicitor drew a Trust cheque in the sum of $3,650.00. The Trust Account records show that the cheque was drawn in favour of Mr P. Ingram of Counsel to whom fees were owing in the matter. The cheque was in fact drawn by the solicitor payable to cash and on 30 July 1992 the solicitor cashed the cheque and the Society claims that he appropriated the proceeds for his own use.

33 In clear terms, in a letter dated 27 January 1993 addressed to the Society, the solicitor admitted misappropriation of the moneys. He said, inter alia, “I was finding it impossible to meet my mortgage payments but, rather than tell my wife and have to approach the Bank holding the first mortgage, I stupidly utilised funds due to Barristers to stall off the inevitable. I fully intended to make the payments to the barristers myself, hoping at the time that my wrongdoing might not be revealed……… I am ashamed and aghast at what I did.”

34 To Ms Sayer the solicitor admitted that in writing up the Kalamazoo system he used a blank piece of paper to write the name “P Ingram” which appears in the carbonised copy of the Cash Book and Ledger and the cheque, a copy of which was produced, was made payable to cash and opened for payment by the Bank. The cheque and the opening of the cheque were signed “D I Hill”.

35 The misappropriation could hardly be established more clearly. It is admitted by the solicitor and proved conclusively by the documents. The solicitor’s letter leaves the Tribunal in no doubt as to the wilful quality of the solicitor’s acts.

36 This wilful conduct also satisfies the requirements in relation to the s61 complaint. The evidence here establishes breaches of s61(1) and s61(2) for the solicitor did not hold the moneys in accordance with the regulations relating to trust moneys and disbursed trust moneys otherwise than in accordance with the directions of the client.

Laza Stankovic
37 Ms Sayer’s report established that the solicitor received a cheque on 21 August 1992 for the sum of $5,127.00 representing the agreed costs of workers compensation proceedings conducted on behalf of Mr Stankovic. These moneys were paid into the solicitor’s Trust Account and credited to Mr Stankovic’s Trust Ledger account.

38 The solicitor drew from the Trust Ledger Account the sum of $892.00 and the Trust Account records showed the cheques having been drawn in favour of Mr J. Davis of Counsel, to whom fees were owing.

39 In his letter to the Society of 27 January 1993 which has already been referred to above the solicitor admitted that the cheque was not issued to the Barrister but cashed by the solicitor for his own purposes.

40 The Tribunal finds the misappropriation alleged established and that the solicitor disbursed this sum of $892 otherwise than in accordance with the directions of the client in breach of S61. These actions were intentional so the wilful requirement of s61(8) is made out.

John Apostolovski
41 The evidence in support of the complaints in relation to the solicitor’s handling of matters for this client was detailed in Ms Sayer’s report which was verified by her Affidavit.

42 On 14 December 1992 the solicitor (then practising under the name of Radin & Associates) received on behalf of Mr Apostolovski the sum of $5,386.68 which was paid to his Trust account and credited to the client’s Trust ledger account. On the same day a sum of $3,500.00 was drawn from the Trust account and debited to the client’s Trust ledger account. This payment was made to Mr Michael Radin (who had previously acted for the client) but no bill of costs was rendered to the client, nor did the client authorise the solicitor to withdraw those moneys and pay the same to Mr Radin.

43 It is convenient at this stage in relation to this complaint to look at the terms of S61(8) which makes the wilful contravention of S61(1) or S61(2) professional misconduct. The “wilful” aspect of this instance is of concern.

44 In Re Vickery 1931 1CL 572 at 583 Maugham J. (as he then was) said:

“A person is not guilty of wilful neglect or default unless he is conscious that, in doing the act which is complained of or in omitting to do the act which it is said he ought to have done, he is committing a breach of his duty, or is recklessly careless whether it is a breach of his duty or not.”
In Re Hodgekiss 1962 62SR NSW 340 at 353 Hardie J. said in relation to alleged breaches of ss 41 and 42 of the Legal Practitioners Act which are the precursors of the present ss61 and 62:
“I am of opinion that the section deals with personal breaches of the statutory provisions in question on occasions when the solicitor knew or believed that he was committing such breaches or was recklessly careless in that regard. It is thus essential in an enquiry as to whether there have been wilful breaches by a solicitor of the provisions of ss 41 and 42 to examine the facts and circumstances relevant to his state of mind, knowledge and intention at the material dates.”
45 It is apparent that the solicitor acquired the matter from Mr Radin who had previously acted for Mr Apostolovski. There is no evidence from the file, from the investigation of Ms Sayer, from Mr Apostolovski or any other source which would assist the Tribunal in seeking to determine the solicitor’s “state of mind, knowledge and intention” on 14 December 1992 when the cheque for $3,500 was drawn. The complaint cannot be sustained unless the “wilful” component is established. The wilfulness may in many circumstances be apparent but it clearly cannot be simply implied on the basis that a provision of s61 has been breached. The solicitor may have been of the view that in these circumstances he was required to pay the costs of Mr Radin on behalf of this client or to have had an implied authority to do so. The issue does not appear to have been put to the solicitor or further raised. In those circumstances the S61 complaint in relation to this client is dismissed as there is no evidence to satisfy the requirement of s61(8).

46 The particulars allege misappropriation by the solicitor and from the terms of the information that is not confined to one or more specific clients but generally, so that it appears appropriate for the Tribunal to determine whether that complaint relates to the solicitor’s dealings with each of the seven client’s mentioned in the particulars.

47 The term “misappropriation” is not defined in the Legal Profession Act.

48 Section 61 of the Legal Profession Act creates an obligation upon a solicitor not only to hold “the money exclusively for…… the person on whose behalf it is held” but also to “disburse the money in accordance with the directions of the person on whose behalf it is held”.

49 Section 178(A) of the Crimes Act of New South Wales refers to “fraudulent misappropriation” which misappropriation may be “to his own use or to the use of any other person”.

50 The Tribunal finds that the payment of moneys to Mr Radin by the solicitor in this matter was not in accordance with the direction of Mr Apostolovski and that the payment accordingly was a misappropriation to the use of another person, Mr Radin. In these circumstances the Tribunal finds that the complaint of misappropriation in this matter is established. The nature of the complaint proved is a serious one. Misappropriation of Trust moneys is a very serious form of misconduct and the Tribunal finds that in this instance it amounts to professional misconduct.

Dusanka Miletic
51 The verified report of Ms Sayer establishes the receipt of various moneys by the solicitor on behalf of Mrs Miletic. Mr Hill acted for this client in relation to two personal injury claims.

52 From the moneys received by him the solicitor drew payments totalling $8,014.00 in favour of or to the benefit of his firm. The payments were:

(a) State Bank $880.00; and
(b) two cheques paid to the solicitor’s firm totalling $7,114.00;
The Society complained that no bill was rendered to Mrs Miletic and that the solicitor had no authority from her to draw the three cheques totalling $8,014.00.

53 In her report Ms Sayer stated that there was a handwritten draft bill in the instruction file which related to this matter but no typed bill of costs was sighted and there was no indication of a complete bill having been sent to the client. Ms Sayer also reported that the Trust Ledger showed that the cheque drawn for $880.00 to the State Bank was entered as “re litigation lending account”. Ms Sayer reports that there is no evidence in the instruction file to indicate that Ms Miletic ever had a litigation lending account.

54 The copy Trust ledger before the Tribunal showed that a cheque was deposited to the credit of this solicitor’s Trust Account for $65,312.21 on 17 December 1990. Two days later (19 December 1990) a payment of $6,878.00 was made from the solicitor’s Trust Account to his General account and again on the same day the cheque for $880 was drawn in favour of the State Bank. Two days later (21 December 1990) a cheque was drawn on the account in favour of the client for what appears from the poor photocopy tendered to be the bulk of the moneys actually paid to the client (there is at least one further payment recorded). Ms Sayer’s report attaches as well as the handwritten draft account a copy of a typed reconciliation statement dated 19 February 1991 and a copy of a Trust statement in the matter dated 29 October 1993.

55 The failure to obtain an authority to pay out moneys and the failure to provide an account before transferring professional costs are established so that the solicitor has breached S.61. He knew what he was doing in this instance, he prepared a handwritten draft account about two months after making payments to his firm and the State Bank a typed reconciliation. On this basis the Tribunal is satisfied that his breach was wilful so that the complaint is established.

56 Once again the solicitor has made payments from his Trust Account without the directions of the person on whose behalf the moneys were held namely Dusanka Miletic. The Tribunal finds this constitutes misappropriation as claimed by the Society. The payment of moneys drawn in satisfaction of an apparently non-existent litigation lending account and the payment of costs that had not been authorised is very serious. The Tribunal finds that the manner of the solicitor’s handling of this client’s matter involves a most serious form of unprofessional conduct.

Dragan Spasic
57 The particulars alleged are that the solicitor acted for Mr Spasic on a motor vehicle personal injury claim which resulted in a verdict in favour of Mr Spasic of $78,899.93 plus costs. On 30 October 1992 the solicitor received the verdict moneys and paid them into his Trust Account. The solicitor prepared a bill dated 2 November 1992 addressed to Mr Spasic which included the following disbursements:

“i. Counsel’s fees $3,000.00
ii. Interpreting fee - M. Gray $1,500.00
iii. Investigator’s fees – I Hill $140.00
iv. Service fee $50.00”
58 The particulars further alleged that the service fees and investigator’s fees were not paid and that Counsel was paid only $2,500.00 and Mr Gray $1,000.00.

59 In addition, the particulars alleged that the amounts paid or allegedly paid to Michael Gray exceeded any amount which might properly have been due to Mr Gray.

60 The Society relied upon the Affidavit of Ms Sayer verifying her report together with an Affidavit by Mr Spasic.

61 Ms Sayer’s report and the documents which she produced established the differences between the Counsel’s fees and interpreting fees claimed in the bill to the client as opposed to those actually paid and also confirmed that the investigators’ and service fees (respectively $140 and $50) had not been paid from the solicitor’s Trust or General accounts.

62 Ms Sayer’s evidence included the statement that the Trust ledger for this matter was missing from the solicitor’s records and she reconstructed the account. This established inter alia that the verdict was received on 30 October 1992 and that “part costs” were transferred to the solicitor’s firm ($5,000.00 on 2 November and $2,000 on 5 November) with a “balance” on 10 November, while Mr Spasic’s cheque was drawn on 10 November 1992.

63 Mr Spasic in his Affidavit makes it clear that he had no need of an interpreter and in fact at the hearing of his compensation claim he gave evidence in English without an interpreter whose services were dispensed with. It appears that at all relevant times Mr Gray attended a number of conferences, not in the role of interpreter and not at the request of Mr Spasic. The Tribunal is satisfied that:

(1) Mr Gray’s attendances related to Mr Gray’s employment or other association with the solicitor;
(2) That any payment due to Mr Gray for his attendances on Mr Spasic, conferences with doctors or barristers or at Court were part of Mr Gray’s own contractual or employment arrangements with Mr Hill; and
(3) That any payment due, whether by wage, sessional fee or otherwise formed part of the solicitor’s own overheads in conducting his practice and if and when such attendances were necessary if they were chargeable at all to the client the services were costs items and not disbursements.
64 Mr Spasic in his Affidavit made it quite clear that he did not receive from the solicitor a memorandum of costs and disbursements or a Trust Account statement, both of which had been dated 2 November 1992. The evidence is that Mr Spasic received these documents later after he had consulted Bowen & Gerathy. His new solicitors wrote to the Society on 22 June 1992 complaining, amongst other things, of the difficulties that had been experienced in obtaining a bill of costs.

65 The Tribunal is satisfied that the solicitor had no direction from his client to disburse moneys when he made various payments including three payments to his firm in November 1992 and that the account dated 2 November 1992 was not given or sent to Mr Spasic until after substantial moneys have been drawn by the solicitor against the moneys required to be held in Trust for the client. The conduct of the solicitor is dishonest and may properly be described as wilful, establishing a breach of s61.

66 In relation to the complaint that the solicitor misappropriated Trust moneys insofar as Mr Spasic is concerned the evidence establishes that moneys were held on behalf of Mr Spasic and were paid out without his authority. These are the payments without authority of Counsel’s fees and interpreter’s fees. The Trust account is not a fund that the solicitor can use at whim as his three drawings of costs in early November 1992 might suggest. The solicitor’s approach to the payment of these moneys is totally inappropriate.

67 The misconduct is serious and the Tribunal finds find that the acts of the solicitor which have been established constitute professional misconduct.

Olga Anon
68 The final matter in which complaints were particularised related to a personal injury claim for Mrs Anon, for whom the solicitor acted. This was settled on about 11 April 1990 for the sum of $153,367.39. Those moneys were received by the solicitor on 10 May 1990 and paid to his Trust account. On the same day the solicitor paid to his firm from the settlement moneys the sum of $7,000.00 without authority.

69 The Society relied upon the Affidavits of Jean Sayer and Mrs Anon.

70 Ms Sayer’s evidence was that there was no indication in the instruction file that a bill was ever rendered to Mrs Anon or that any other settlement authority had been provided to Mrs Anon.

71 The Affidavits established that on 28 March 1991 the solicitor paid from the settlement moneys the sum of $850.00 to Mr Gray without any direction from the client to pay this money and without there being any proper basis for moneys to be paid to Mr Gray from the settlement moneys.

72 Ms Sayer reported that the client signed an authority giving instructions to settle the matter on the basis that she would receive a clear amount of $156,400.00 and she did receive that. Ms Sayer further reported that there was no indication in the instructions file that a bill of costs or any form of settlement statement had ever been prepared and issued to the client until 6 October 1993 when a Bill of Costs plus a Trust Account Statement dated 23 September 1993 were sent to the client. The client, indeed, did two years later, complain through another firm of solicitors of having received a letter concerning litigation lending and of not having received a full account in relation to the matter and, in particular, no itemised account nor a list of medical expenses that had been paid. The instruction to settle upon receipt of a specific lump sum by the client does not authorise the solicitor to treat the balance of the moneys at his whim. Payments must be authorised, this has not happened and the Tribunal finds that this is yet another wilful breach of s61 amounting to professional misconduct.

73 In relation to Mr Gray, the documentation found by Ms Sayer in the solicitor’s file clearly establishes a payment dated 28 March 1991 recorded in the Trust Account ledger of $850.00 to him. Mrs Anon in a complaint to the Legal Services Commissioner pointed out that Mr Gray was a Yugoslav interpreter and she, Mrs Anon, was not of Yugoslav origin and does not speak the language, nor indeed, she asserts, does Mr Gray speak Spanish. Ms Sayer further reports that Mr Gray did not speak to Mrs Anon in Spanish and, indeed, Mrs Anon indicated through advisers to the Legal Services Commissioner that Mr Gray had introduced himself as a solicitor with the firm.

74 The evidence clearly proves Mrs Anon’s complaints in relation to s61 in relation to the various payments made without her direction. The payment to Mr Gray was not authorised, nor was it proper. The solicitor was not entitled to take moneys from his Trust Account for his own fees without submission of a bill of costs. His actions breached the S61 requirements and where the payments included one to Mr Gray which was improper and had to be known to the solicitor as improper then the breaches are wilful. Mr Gray was not an outside expert but part of Mr Hill’s office establishment. However, had he been an independent interpreter the absurdity of the situation is apparent when one recalls that Mr Gray speaks Yugoslav languages not Spanish which is the client’s first language. The solicitor has no entitlement to draw costs without having rendered a bill of costs so that the claim of misappropriation of Trust moneys by him in this matter is established.

Finding
75 There is a pattern of dishonesty in the behaviour of the solicitor established in the evidence. Records have been falsified by ensuring that carbonised records of a cheque did not correspond with the face of the cheque. There is a pattern of consistent and wilful breaches of Section 61 of the Act with costs being transferred without a bill of costs being provided, moneys not being accounted for and moneys being paid without authorisation. The breaches of Section 61 constitute professional misconduct in terms of the Act . The misappropriation, falsification of records and other matters established against the solicitor in turn constitute professional misconduct under the common law meaning of the expression in terms of the common law test as stated in the decision in Allinson -v- The General Council of Medical Education and Registration (1894 IQB750 at 763) in a medical case which has become a classic test applicable to professional misconduct by members of the legal profession:

“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’.”
76 The evidence in relation to the disbursements charged to various clients for services said to have been provided by Michael Gray are further indicative of the dishonesty of the solicitor. It is clear from the evidence that there was an arrangement between Messrs Gray and Hill under which Mr Gray attended various hearings and conferences when at times his attendance was unnecessary. The purported provision of interpreting services by a Serbo-Croatian interpreter for a client who had no Yugoslav background, did not speak any Yugoslav language and was of Spanish origin highlights the audacity of the solicitor. The Gray payments indeed show his total disregard of his obligations in accounting for client’s moneys. Mr Gray appears to have been some form of go-between and he was part of Mr Hill’s establishment. Any fees to which he might have been entitled should, in the Tribunal’s view, have been paid to him as wages or as a contract fee by Mr Hill Payment for Mr Gray’s time when and if appropriate is part of the solicitor’s overheads in earning his costs in the proceedings. In the circumstances the time spent by Mr Gray could not form the basis of a disbursement properly payable by the client.

77 The Tribunal has made a number of findings of professional misconduct. The wilful breaches of S61 are numerous and, indeed, by themselves in the view of the Tribunal are such that the solicitor is clearly not fit to practice. The fraudulent behaviour in the preparation and recording of the two cheques for counsel’s fees which the solicitor cashed and converted for his own purposes fall into the same category.

78 The Tribunal’s finding is that professional misconduct of a serious nature is established and that solicitor is not a fit and proper person to remain on the Roll of Legal Practitioners. The duty of the Tribunal is expressed clearly by Clark JA in The Law Society of New South Wales –v- Bannister 1993 4LPDR 24 where His Honour said:

”… if a solicitor is shown not to be a fit and proper person he or she should be removed from the roll. The order for removal is not punitive but protective. Accordingly it is no answer for the solicitor to say that he or she has already been punished for the conduct which shows unfitness.
But the supervisory jurisdiction of the court and the Tribunal is also directed to protecting the public more generally by maintaining and encouraging appropriate standards of professional behaviour….
The exercise of the power to remove from the roll, suspend or fine a solicitor is directed to protecting the public by ensuring that those unfit to practise do not continue to hold themselves out as fit to practise and that high standards are maintained. The maintenance of such standards involves deterring the offender from repeating the offence and deterring others who might be tempted to offend.”
79 The Tribunal finds that the removal of the solicitor’s name from the Roll is the proper order in circumstances of this matter.

Costs
80 The Tribunal finds having considered the circumstances that it is proper that costs should follow the event and that the solicitor should be ordered to pay the costs of the Society of and incidental to these proceedings.

Compensation
81 Section 171D of the Legal Profession Act is in the following terms:

“171D. (1) If, after it has completed a hearing relating to a complaint against a legal practitioner, the Tribunal is satisfied that the legal practitioner is guilty of unsatisfactory professional conduct or professional misconduct and that the complainant has suffered loss because of the conduct concerned, the Tribunal may do any one or more of the following to compensate the complainant:
(a) order that the legal practitioner waive or repay the whole or a specified part of the amount charged to the complainant by the legal practitioner in respect of the legal services specified in the order,
(b) order that the legal practitioner provide to the complainant the legal services specified in the order, either free of charge or for a specified charge;
(c) order that the legal practitioner waive any lien in respect of the document or class of documents specified in the order;
(d) order that the legal practitioner pay to the complainant by way of monetary compensation for the loss; the amount specified in the order.
(2) A compensation order for the payment, waiver or repayment of an amount exceeding $10,000 is not to be made unless the complainant and the legal practitioner both consent to the making of the order. ”
82 The Tribunal having completed the hearing relating to the complaints against the solicitor and having made findings that it was satisfied that the solicitor is guilty of professional misconduct, proceeded to deal with the issue of compensation.

83 Under Section 171D(1) the Tribunal has to find as a threshold issue that the complainant has suffered loss because of the conduct concerned before it may do any one or more of the four nominated orders to compensate the complainant.

84 The complainants are:

(a) Dobrinka Vuic who sought compensation in the sum of $10,391.00 plus interest from 4 August 1992;
(b) Lillah Anon (formerly Olga Anon) who sought compensation in the sum of $1,550.00 particularised as $850.00 deducted from the settlement proceeds and paid to Mr Gray and $700.00 costs incurred by the complainant in instructing other solicitors.
85 The statutory provision limits the jurisdiction in the absence of consent to an order not exceeding $10,000.00 and as the consent required of both parties to any excess over that sum was not provided the claim by Mrs Vuic is reduced to $10,000.00.

86 The Society did not take any formal role in the applications for compensation.

87 An interpreter was provided to enable Mrs Vuic to give evidence. Mrs Vuic had no documentation to assist her with her claim and the Tribunal learned that her documents were in three places, namely her home, with her prior solicitor Mr Harrison and with Mr Pierotti of the Law Society. Mrs Vuic had not read her affidavit recently and did not recall its contents. The Affidavit was translated for her by the interpreter. Her evidence was then obtained by Tribunal members asking her questions and explaining the process to her in particular that her claim was against Mr Hill personally and not any other person or organisation. After giving consideration to the matter, the Tribunal takes the view that it is unfortunate if the Society, as a matter of practice, does not take a role in compensation claims.

88 The Tribunal was concerned as to whether the matters complained of by Mesdames Vuic and Anon actually fell within the complaints particularised by the Society. The Tribunal did not have the assistance of any guidance from Counsel in relation to the compensation matters. The Tribunal is aware of only two reported matters in recent times dealing with compensation under the Act. The most recent of these is Legal Services Commission -v- Musgrave [2000] NSW ADT 149 where an order for payment of $10,000.00 compensation was made. That decision did not assist the Tribunal as the order was made by consent.

89 The other matter was a matter of Radin [1993] NSWLST 19. The Tribunal in that matter found in considering the prior equivalent of S171D [that is, the old S163]

“Before it can make an order for compensation against the solicitor it [the Tribunal] must be satisfied:
(1) that the legal practitioner has been guilty of unsatisfactory professional conduct or professional misconduct in relation to the subject of the claim for compensation and
(2) that the complainant has suffered loss arising out of this conduct.”
90 The Tribunal adopts that same view as it did in Radin and finds that the conduct giving rise to the claim for compensation must be conduct that is both particularised in the complaint and found to constitute unsatisfactory professional conduct or professional misconduct by the Tribunal.

91 Both Mrs Vuic and Mrs Anon swore Affidavits in support of their applications for orders for compensation. Mrs Vuic also gave evidence.

92 Mrs Vuic’s evidence confirmed that she met Mr Gray with Mr Hill and she thought that Mr Gray was part of Mr Hill’s firm. Her evidence was clear that she had an agreement with Mr Gray which he had proposed in terms that she would pay him 10% of the moneys she actually received from the proceedings. She gave evidence of two such payments. Those payments were quite separate from the professional costs payable to the solicitor, Mr Hill, and the Tribunal finds that Mr Gray offered some form of service as an expediter or go-between. The evidence established that Mr Gray’s role was to ensure that Mr Hill carried out his responsibilities to Mrs Vuic promptly and professionally. Mr Gray produced a business card to Mrs Vuic which showed his connection with the firm but there was no evidence to indicate Mr Hill was aware of this arrangement and the Tribunal is concerned that this matter does not appear to have been investigated. The Tribunal is unable to ascertain whether or not this commission arrangement was an isolated incident but finds the evidence of these percentage payments from the client’s net personal injury claim most disturbing.

93 Mrs Vuic was asked to list the amounts which made up her compensation claim. Various amounts had been detailed in her Affidavit but it was not clear to the Tribunal how the total claim was calculated. Mrs Vuic’s explanation was that the amount of compensation claimed had been worked out by her solicitor who had given the papers to the Law Society which had details of how the sum was calculated.

94 On further questioning as to how the compensation claimed by her was made up, Mrs Vuic indicated that the first amount claimed was the sum of $4,700.00 she had been required to pay to the GIO. The evidence from her Affidavit was that she had settled the costs recovery claim against her by the GIO in the sum of $1785.00, this being a net fee in the context of her having made two claims for damages for personal injuries. One of these injury claims was unsuccessful, leading to her being ordered to pay the costs of the GIO in relation to that unsuccessful claim. The Tribunal took the evidence to mean that the GIO’s costs in Mrs Vuic’s unsuccessful action were $4,700 and that after setting off her party and party costs in her successful action her net payment to the GIO was $1,785.00. Insofar as Mrs Vuic’s claim for compensation includes that costs payment, her claim, however quantified, is rejected. There is no connection between the costs order and any finding made against the solicitor in these proceedings, nor indeed, is there any particular of misconduct alleged against him in the information which relates to that costs order.

95 The next item Mrs Vuic claimed to be compensated for was the sum of $1,416.00 which amount was owing to the solicitors who were acting for her prior to Mr Hill. Again, this claim does not form part of the conduct particularised against the solicitor for which he has been found guilty of professional misconduct. While, in any event, the debt does not appear in any way to be any possible obligation of Mr Hill, it certainly does not form part of an allowable compensation claim based on the evidence in the complaints which were the subject of findings adverse to the solicitor by the Tribunal and it is rejected.

96 Mrs Vuic’s Affidavit detailed three payments made from the Trust Account by her solicitor and the Tribunal accepts that they are properly part of her compensation claim, although in her oral evidence she was not sure of her claim. She relied on her absent solicitor having prepared a total claim for her. Two of these claims relate to payments by Mr Hill to Mr Gray respectively of $1,100.00 and $2,190.00. Those payments are payments that were particularised by the Society and they have been the subject of professional misconduct findings against the solicitor. The evidence in relation to those two amounts, totalling $3,290.00 is clear and the Tribunal is satisfied that Mrs Vuic is entitled to be compensated for that sum.

97 A third payment referred to in the same paragraph of her Affidavit, namely the sum of $1,100.00 paid to I. Hill was not particularised in the Information and has not been made the subject of an adverse finding against the solicitor. On the basis of the construction of Section 171D already detailed above, this claim is not one that can form part of an order for compensation in this matter.

98 Mrs Vuic further claimed a sum of $1,900.00 compensation, this representing two sums that she had paid to Mr Gray to secure Mr Hill’s “special attention”. They were payments made when Mr Gray met Mrs Vuic and her husband and had them cash settlement cheques she had received from Mr Hill. On those occasions, amounts approximating to 10% of Mrs Vuic’s settlement cheques were paid to Mr Gray. Mrs Vuic’s evidence in this matter is quite convincing and is accepted by the Tribunal. However, these circumstances cannot form part of her compensation claim against the solicitor under the terms of Section 171D. There is no evidence to implicate the solicitor in this payment arrangement with Mr Gray and the payment, which was grossly improper, does not in any way form part of the professional misconduct material which the Tribunal has found proved in these proceedings. This part of the claim, accordingly, is also rejected.

99 Accordingly, having reviewed the evidence, based on the terms of the relevant Section of the Act, the Tribunal has concluded that the appropriate order in relation to Mrs Vuic’s claim is that the solicitor should pay her compensation in the sum of $3,290.00.

100 The claim for compensation by Mrs Anon, related to two items:

(i) refund of fees improperly paid by the solicitor to Michael Gray of $850.00; and
(ii) recovery of the costs charged by Mrs Anon’s present solicitors of $700.00.
101 The first of these items relates to moneys improperly paid by the solicitor from his Trust Account without authorisation or prior account. This is a matter which has been made the subject of a finding of professional misconduct by the solicitor and satisfies the statutory requirements for Mrs Anon to be entitled to receive compensation from the solicitor.

102 The legal fees payable to Mrs Anon’s solicitors have been incurred by her in consequence of Mr Hill’s conduct. In the circumstances, it was proper for her to engage solicitors to resolve the issue of moneys improperly paid by the solicitor to Mr Gray and accordingly the charges constitute a further loss arising out of the conduct of the solicitor.

103 The solicitor, Mr Hill, has been served with a copy of Mrs Anon’s Affidavit and has elected not to put the quantum of her solicitors’ charges in issue. The Tribunal relying on the experience of its members accepts that the charges made are within the range of the members’ professional experience and are reasonable and proper.

104 Accordingly, Mrs Anon’s claim for compensation against Mr Hill is established in respect of both amounts claimed, namely the sums of $850 and $700 making a total of $1,550.

105 Accordingly, the orders of the Tribunal are as follows:

(1) That the name of Dennis Ian Hill be removed from the Roll of Legal Practitioners of the Supreme Court of New South Wales.
(2) That Dennis Ian Hill pay the costs of the Applicant Society of and incidental to these proceedings.
(3) That within twenty eight (28) days of this order, pursuant to Section 171D of the Legal Profession Act, Dennis Ian Hill pay by way of compensation the sum of $3,290 to Dobrinka Vuic and the sum of $1,550 to Lillah Anon.