Law Society of New South Wales v Hooper

[2005] NSWADT 174

CITATION:	Law Society of New South Wales v Hooper [2005] NSWADT 174
DIVISION:	Legal Services Division
PARTIES:	APPLICANT Council of the Law Society of New South Wales RESPONDENT Robert Francis Hooper
FILE NUMBER:	052008
HEARING DATES:	01/07/2005
SUBMISSIONS CLOSED:	07/01/2005
DATE OF DECISION:	08/02/2005
BEFORE:	Chesterman M - ADCJ (Deputy President); Barnes M - Judicial Member; Bennett C - Non Judicial Member
APPLICATION:	Professional Misconduct - breach of s. 61 of the Legal Profession Act - Professional Misconduct - breach of s. 62 of the Legal Profession Act - Professional Misconduct - forging signatures - Professional Misconduct - mislead client - Professional Misconduct - mislead third party
MATTER FOR DECISION:	Principal matter
LEGISLATION CITED:	Administrative Decisions Tribunal (Interim) Rules 1998 Legal Profession Act 2004
CASES CITED:	Allinson v General Council of Medical Education and Registration [1894] 1 QB 750 Council of the Law Society of New South Wales v Foreman (No 2) (1994) 34 NSWLR 408 Dupal v Law Society of New South Wales, Unreported, 26 April 1990, Court of Appeal, NSW (BC9002508) Law Society of New South Wales v Dennis (1981) 7 Fam LR 417 Law Society of New South Wales v Young [2001] NSWADATAP 38 Stanoevski v Law Society of New South Wales (No 2) (LSD) [2004] NSWADTAP 35 A Solicitor v Council of the Law Society of New South Wales [2004] HCA 1
REPRESENTATION:	APPLICANT P Boyd, solicitor RESPONDENT No appearance
ORDERS:	1. The name of the Solicitor is to be removed from the Roll of Legal Practitioners; 2. The Solicitor is to pay the Law Society’s costs of these proceedings, as agreed or assessed.

REASONS FOR DECISION

The nature of these proceedings

1 In this matter, the Applicant, the Law Society of New South Wales (‘the Law Society’), laid by its Council an Information against the Respondent, Robert Francis Hooper (‘the Solicitor’), alleging that he was a legal practitioner within the meaning of the Legal Profession Act 1987 (‘the Act’) and that while practising as a solicitor he was guilty of professional misconduct. The Information was filed in the Tribunal on 17 March 2005.

2 The Law Society requested in the Information that the Tribunal make orders that the name of the Solicitor be removed from the Roll of Legal Practitioners and that he pay the Law Society’s costs.

3 The Law Society tendered an affidavit dated 13 May 2005 by Mr Kenneth James Ramshaw, a licensed commercial agent. Mr Ramshaw stated that on 30 March 2005, at 1/1096 Pittwater Road, Collaroy, he served a copy of the Information, together with copies of the affidavits and reports required by Rule 25 of the Administrative Decisions Tribunal (Interim) Rules 1998 (‘the ADT Rules’), upon a person who identified himself as Robert Francis Hooper.

4 The Solicitor did not file a Reply within 21 days of the service of these documents, as is required by s 167(3) of the Act and Rule 26 of the ADT Rules. He did not appear at the hearing before us or at an earlier directions hearing.

5 By the time of the hearing, the time specified for compliance with directions had expired. The Law Society advised us that it had notified the Solicitor of the date of the hearing, in a letter dated 13 May 2005 and addressed to him at 1/1096 Pittwater Road, Collaroy. This letter was not returned to the Law Society.

6 We were accordingly satisfied that the matters outlined in Rule 29 of the ADT Rules had been established and that it was appropriate for us to conduct in his absence a hearing into each of the allegations particularised in the Information.

7 The Information, as amended by leave at the hearing, set out five grounds in support of its claim that the Solicitor had been guilty of professional misconduct while practising as a solicitor. They were that the Solicitor:-

1. Wilfully breached Section 61 of the Legal Profession Act, 1987.

2. Wilfully breached Section 62 of the Legal Profession Act, 1987.

3. Misled the Colonial State Bank.

4. Forged his client’s signature on a Registered Mortgage and Variations of the Mortgage.

5. Improperly used a client’s title document.

8 The relevant provisions of s 61 of the Act are as follows:-
61 Money received by solicitor on behalf of another

(1) A solicitor who, in the course of practising as a solicitor in this State, receives money on behalf of another person:

(a) must pay the money, within the time prescribed by the regulations, into a general trust account in New South Wales at an approved financial institution and must hold the money in accordance with the regulations relating to trust money, or

(b) if the person on whose behalf the money is received directs that it be paid or delivered to a third party free of the solicitor’s control, must ensure that the money is paid or delivered:

(i) before the end of the next working day or, if that is not practicable, as soon as practicable after the next working day, or

(ii) no later than the day allowed by the solicitor’s authority or instructions (if that day is later than the day allowed under subparagraph (i)), or

(c) if the person on whose behalf the money is received directs that it be paid otherwise than into a general trust account or to a third party, must pay the money as directed and (if the money is to be held under the direct or indirect control of the solicitor) must hold the money in accordance with the regulations relating to controlled money.

(2) In any of those three cases, the solicitor must hold the money exclusively for, and must disburse the money in accordance with the directions of, the person on whose behalf it is held.

….

(8) It is professional misconduct for a solicitor to wilfully contravene subsection (1) or (2).

9 The relevant provisions of s 62 are as follows:-
62 Keeping of accounts

(1) A solicitor shall keep:

(a) in the case of trust money (within the meaning of section 61)—accounting records, or

(b) in the case of money other than trust money—such accounting records or other records (if any) as may be required by the regulations,

that disclose at all times the true position in relation to money received by the solicitor on behalf of another person.

….

(4) A wilful contravention of subsection (1), (2) or (3) is professional misconduct.

10 The Solicitor was admitted as a solicitor on 23 December 1985. He practised as a sole principal for periods between 21 September 1987 and 1 February 1998. Between 2 February 1998 and 30 June 1999, he was a principal in the firm Macquarie Legal Partnership. Thereafter, he practised at Collaroy as a sole principal until 30 June 2002, under the name of Hoopers Lawyers. He did not renew his practising certificate as from that date.

11 During July 2002, the Law Society received a complaint alleging that the Solicitor had made improper use of a certificate of title belonging to a client in order to secure moneys advanced to him for his own benefit. On 2 August 2002, Ms Jean Sayer, a chartered accountant, was appointed by order of the Supreme Court as a Receiver of the trust property of the Solicitor. Having investigated this complaint, along with other matters, she presented a report (‘the Sayer report’) to the Council of the Law Society on 21 August 2003.

12 The particulars of the Solicitor’s alleged professional misconduct set out in the Information referred to four matters in which he had been involved while he was in practice. They asserted that in the course of each of them he had engaged in professional misconduct in one or more of the five ways listed above at [7].

13 We will now outline the evidence regarding each of these four matters, in so far as this evidence bears upon the allegations made and particularised in the Information. We will deal with them in the order in which they appear in the Information, using the same headings. We will also summarise the submissions made to us by Mr Boyd, appearing for the Law Society, in connection with each matter and will indicate in each instance whether professional misconduct has been established.

14 It is useful to note at this point that these four matters occurred over a period (December 1999 to September 2001) in which the Solicitor practised as a sole principal. Nothing in the evidence suggests that anyone other than the Solicitor was responsible for the maintenance of his firm’s trust account records (this being a significant aspect of a number of the allegations made against him) or for any other relevant step taken in the name of the firm. This general conclusion is important because in order to substantiate each of the five grounds of professional misconduct alleged against the Solicitor, a finding of intentional or wilful conduct is required.

15 The evidence regarding these matters is chiefly contained in the Sayer report. A good deal of other material contained in that report relates to these four matters, but need not be set out here.

16 In addition to the Sayer report and the affidavit of service, to which we have already referred, the evidence tendered by the Law Society comprised (a) an affidavit dated 17 March 2005 by Raymond John Collins, Manager of the Professional Standards Department of the Law Society, setting out the steps taken by the Society in investigating the matters alleged against the Solicitor and in resolving that these proceedings should be brought; and (b) a copy of a letter dated 21 August 2002 from the Solicitor to the Law Society, to which were attached various documents, including one described as an ‘explanation regarding the events of’ a loan to the Solicitor by Ms Kay Foster, his former client.

1. Purchase and sale of property at Castle Cove by Dr Kevin Finegan

17 The Information alleged that during his involvement in this matter the Solicitor wilfully breached s 61 and s 62 of the Act.

18 Breaches of s 62. By a contract of sale dated 27 October 2000, Dr Kevin Finegan agreed to purchase for $2.95 million a property at 47 Headland Road, Castle Cove, with a view to resale. Dr Finegan did so pursuant to a declaration of trust that he executed in favour of three beneficiaries, including the Solicitor and a company called Gizmo Productions Pty Limited. Under an accompanying ‘Fee Agreement’, the beneficiaries undertook to pay to Dr Finegan 10% of the net profit achieved on the resale.

19 In the contract of sale, Messrs Gray & Perkins were designated as the solicitors for Dr Finegan. But the deposit payable on exchange of contracts ($147,000) was paid from a Trust Ledger Account maintained by the Solicitor in the name of Gizmo Productions Pty Limited.

20 Between exchange of contracts and settlement, the Solicitor arranged a mortgage loan of $2,744,365.27. Settlement occurred on 27 March 2001. The balance of the purchase price due on settlement was $66,049.92.

21 The Solicitor’s Trust Account records show a payment of this amount of $66,049.92 on 27 March 2001 from the Trust Ledger Account of a company called Sydney Waterfront Developments Pty Limited (‘Sydney Waterfront Developments’). The payment was made by cheque to the National Australia Bank, in return for bank cheques to be handed over at the settlement on 27 March 2001.

22 In the Solicitor’s Trust Account records, however, this cheque for $66,049.92 is described as having been drawn in favour of a company called Glorious Constructions Pty Limited. It is shown as having been paid ‘as per clients instructions’ in connection with the sale of a property at 337 Edinburgh Road, Castlecrag. This sale is further discussed below, at [51 – 62].

23 In Mr Boyd’s submission, this evidence disclosed contraventions by the Solicitor of the requirement in s 62(1) of the Act that accounting records kept by a solicitor must ‘disclose at all times the true position in relation to money received by the solicitor on behalf of another person’. The records kept by the Solicitor infringed this requirement (a) by indicating that the Solicitor acted for Dr Finegan on the purchase, whereas in fact he did not do so; and (b) by describing a cheque made out to the National Bank for the purposes of settling this purchase as a cheque drawn in favour of Glorious Constructions Pty Limited in connection with the sale of another property.

24 We agree. Since the Solicitor was, as we have indicated (see [14] above), the person responsible for the maintenance of the Trust Account records of his firm, we find in addition that these contraventions of s 62(1) were wilful. We therefore conclude that the Solicitor committed professional misconduct under s 62(4) of the Act.

25 Breaches of s 61. As already indicated, the purchase of the property at 47 Headland Road, Castle Cove by Dr Finegan was arranged with a view to reselling it at a profit. Accordingly, a contract for the sale of it to Sandra Jean Beare and Christopher Thomas Beare and a transfer of the property in conformity with the contract were both executed on 31 May 2001. The Solicitor acted for Dr Finegan on this sale.

26 Neither the contract nor the transfer was in fact signed by Dr Finegan. The signatures on these documents are not his.

27 The contract and the transfer disclose a sale price of $3.5 million (though other documents shown by the purchasers’ solicitors to Ms Sayer suggest that it might have been intended to be $3.6 million). In addition, the consideration for the sale included the transfer by the purchasers to the vendor, or as he directed, of a property at 34 Deepwater Road, Castle Cove. This property was in fact transferred by the purchasers on 31 May 2001, being the same day as the transfer of 47 Headland Road, to a person named Victoria Jean Dwyer, without any payment of money in return.

28 The Solicitor directed that the cash amount due from Ms Beare and Mr Beare on the settlement of their purchase of 47 Headland Road should be paid to various parties, not including Dr Finegan. One of these payments, in an amount of $43,633.03, was to Hoopers Lawyers.

29 In an affidavit sworn on 22 October 2002 and a statement signed on 31 October 2002, Dr Finegan stated that he had never instructed the Solicitor to act for him on the sale of the property at 47 Headland Road, that he had never signed an agreement to sell this property, that he not been informed of its sale until October 2002 and that he had never received from the Solicitor or anyone else ‘any statements or monies coming from the sale’.

30 Mr Boyd submitted that these events disclosed wilful breaches by the Solicitor of the requirements of s 61 of the Act. Mr Boyd referred specifically to the Solicitor’s conduct in (a) directing that, out of the monies received on the settlement of the sale of 47 Headland Road, the sum of $43,633.03 should be paid to the Solicitor’s firm, Hoopers Lawyers, (b) failing to account to Dr Finegan for the proceeds of this sale and (c) failing to account to Dr Finegan with respect to the transfer of 34 Deepwater Road, which formed part of the consideration for the sale of 47 Headland Road.

31 We agree that in the first two of these instances, the Solicitor contravened the requirements of s 61(2). He clearly failed in his statutory duty to hold the funds received by him on the sale of 47 Headland Road exclusively for Dr Finegan, being the person on whose behalf those funds were held. For reasons already indicated, we find in addition that these contraventions were wilful. We therefore conclude that the Solicitor committed professional misconduct under s 61(8) of the Act.

32 With regard, however, to the third instance, we do not think that the terms of s 61(1) and (2) extend to property in specie – in this case, the title to land at 34 Deepwater Road – that is transferred to or at the direction of a solicitor on behalf of another person. The subsections speak only of money. In this particular context, the Information alleged only that the Solicitor wilfully contravened s 61. In relation to this aspect of the Solicitor’s behaviour, we therefore do not make a finding of professional misconduct.

2. Sale of Lot 2, 95 Cammeray Road, Cammeray

33 The Information alleged that during his involvement in this matter the Solicitor misled the Colonial State Bank and that he wilfully breached s 61 of the Act.

34 Misleading the Colonial State Bank. Towards the end of 1999, the Solicitor acted for Ms Mireille Jenkins on the purchase of a property known as Lot 2, 95 Cammeray Road, Cammeray from Ms Diedre Balfort.

35 On 23 December 1999, he forwarded an application on her behalf to the Colonial State Bank for a mortgage loan to finance the purchase. This application included statements to the effect that (a) the purchase price was $5.1 million; (b) a loan of $3.6 million was sought; (c) the balance of the purchase price was to be paid from the proceeds of sale of a property at 353 Edinburgh Road, Castlecrag, which was owned by Ms Jenkins’ husband, Mr Rod Jenkins; and (d) a settlement of the sale of this property for $4,765,000 would take place on 14 January 2000.

36 Accompanying this application were documents purporting to be (a) the front page of the contract to purchase 2/95 Cammeray Road, showing a purchase price of $5.1 million and (b) the front page of the contract to sell 353 Edinburgh Road. At or about the same time, the Solicitor sent to the Colonial State Bank an undated document purporting to be a transfer of 2/95 Cammeray Road for a consideration of $5.1 million. This transfer was signed by the Solicitor as solicitor for the transferee. It also bore the signatures of the transferor and the transferor’s solicitor.

37 The Colonial State Bank acceded to the application and granted to Ms Jenkins a mortgage loan of $3.6 million.

38 The form of transfer of 2/95 Cammeray Road sent to the Land Titles Office was dated 20 January 2000 and specified $1.5 million as the consideration. It differed from the form sent to the Colonial State Bank in ways that showed that two different documents were prepared. It too was signed by the Solicitor as solicitor for the transferee.

39 Ms Sayer was informed by the solicitor for Ms Balfort that the contract price was yet another amount, $2.6 million.

40 It is not clear from the documentation annexed to the Sayer report what amount was actually paid on settlement. In a letter dated 7 February 2000 to Mr Jenkins, the Solicitor stated that, out of the loan of $3.6 million from the Colonial State Bank, three cheques totalling $2,571,935 were ‘used towards the purchase’. He added that ‘the balance of the purchase price was arranged’ between Mr Jenkins and Mr Ted Manny, who was the husband of the vendor Ms Balfort. These statements are consistent with the contract price being of the order of $2.6 million and cannot be reconciled easily, if at all, with its having been as high as $5.1 million.

41 According to a search conducted by Ms Sayer, the property at 353 Edinburgh Road was not sold until June 2000. The consideration was shown in the form of transfer to be $3.5 million only.

42 Mr Boyd submitted that this evidence showed the Solicitor to have misled the Colonial State Bank by representing (a) that the purchase price for 2/95 Cammeray Road was $5.1 million, whereas in fact it was of the order of $2.6 million; and (b) that the sale price for 353 Edinburgh Road was $4,765,000, whereas in fact it was $3.5 million. These misrepresentations were material aspects of the application for finance which he presented to the Colonial State Bank on Ms Jenkins’ behalf and which received the Bank’s approval.

43 We agree that the Solicitor misled the Colonial State Bank in these ways and we find his conduct in this respect to have been wilful.

44 We have no doubt also that such conduct is professional misconduct at common law, on the ground that it ‘would be reasonably regarded as disgraceful or dishonourable’ by legal practitioners ‘of good repute and competency’ (see Allinson v General Council of Medical Education and Registration [1894] 1 QB 750 at 763). In Law Society of New South Wales v Dennis (1981) 7 Fam LR 417, the Court of Appeal found that a solicitor had been party to a dishonest scheme to induce a building society to advance funds to clients of the solicitor through misrepresenting the amounts that the clients had subscribed towards their respective purchases. The Court said this at 424: ‘Participation in a scheme of this character is inconsistent with the integrity demanded of a practising solicitor.’

45 Breach of s 61. In the letter dated 7 February 2000 to Mr Jenkins following settlement of the purchase of 2/95 Cammeray Road, the Solicitor advised him that he had paid to Hoopers Lawyers the sum of $5,958 from the monies advanced by the Colonial State Bank and that he paid a sum of $76,617 to a company called Intgold Pty Limited (‘Intgold’). An accompanying memorandum of costs and disbursements showed how the amount of $5,958 was made up. Intgold was owned by Mr Ted Manny, who was the husband of Ms Balfort, the vendor.

46 However, in the Solicitor’s Trust Ledger Account in the name of Mr Jenkins, the entries relating to distribution of the purchase price showed that on 24 January 2000 the Solicitor paid to Hoopers Lawyers the sum of $52,510 for ‘legal fees and disbursements’ and that the payment to Intgold, made on 21 January 2000, was for only $28,065.

47 Ms Sayer did not find any letter or other document from Intgold authorising payment of this additional amount to the Solicitor out of funds held on behalf of Intgold. Having stated this, she wrote as follows in her report:

It may be that there has been a breach of Section 61 in relation to the amount taken by Mr Hooper from the proceeds of the mortgage in excess of the costs of $5,958.00.
48 Mr Boyd submitted that, despite the qualified nature of this conclusion, we should infer that the Solicitor had contravened s 61(2) by disbursing funds held on behalf of Intgold without the authority of a direction from that company.

49 It is, however, well established that the allegations in an Information such as this must be proved to our ‘comfortable satisfaction’. We note that in an introductory section the Sayer report states that Mr Manny, who owned Intgold, gave numerous directions to the Solicitor with regard to money held in the Trust Account of Hoopers Lawyers on behalf of Mr Manny himself or of his business associates. The Solicitor did not retain records of such directions, whether they were given in writing or orally. The report states further: ‘It is not possible to establish the position in relation to the many separate developments or land transactions dealt with in the Trust Account of Mr Hooper…’

50 Having regard to these considerations and to the tentative manner in which Ms Sayer’s conclusion is expressed, we are not prepared to make a finding that in this instance the allegation of professional misconduct has been proved.

3. Sale of 337 Edinburgh Road, Castlecrag

51 The Information alleged that during his involvement in this matter the Solicitor wilfully breached s 61 and s 62 of the Act.

52 Breach of s 61.In February-March 2001, the Solicitor acted for the vendors in the sale of a property at 337 Edinburgh Road, Castlecrag, for a price of $2.2 million. The vendors were described in the Sayer report as Sydney Waterfront Developments, M Lambert Pty Limited, the Solicitor himself and his wife.

53 In connection with this sale, which was settled on 12 March 2001, the Solicitor received and paid into his Trust Ledger Account in the name of Sydney Waterfront Developments the following amounts: the deposit of $220,000, a payment on settlement of $753,702.59 and a payment of $499.65 on 30 April 2001 by way of adjustment of rates.

54 The Solicitor prepared a statement purporting to show the distribution of the amount received on the sale, the capital contributions of the ‘three partners’ (the Solicitor’s wife not being included) to the venture and a ‘profit adjustment’ between them. It concluded with the claim that the Solicitor was owed the sum of $159,235.

55 In a handwritten statement that the Solicitor gave to Ms Sayer during her investigations, the Solicitor alleged as follows:-

Ted Manny (husband of Dierdre Bounds ( sic ) – sole director/shareholder of Sydney Waterfront Developments) received this document not long after settlement – it is self-explanatory – needless to say I have never received the money owing to me.
56 Between 27 February and 4 April 2001, the Solicitor made five payments totalling $98,593.44 from the Trust Ledger Account relating to this sale. The Sayer report states on p 49 that these payments ‘relate to the affairs of Mr Hooper’. Subsequently (at p 63), it made the following observations:
In relation to the sale of 337 Edinburgh Road, Castlecrag Mr Hooper prepared a statement which he states was given to [Mr Manny] which does not accurately reflect the disbursement of the sale proceeds from his Trust Account. On page 49 of my report I have set out details of moneys paid from the sale proceeds to, or on behalf of Mr Hooper, which are not reflected in the Statement or in any documents in the instruction file in relation to the sale. There is no indication of any authority given by Mr Ted Manny on behalf of Sydney Waterfront Developments Pty Limited to the payments to, or on behalf of Mr Hooper.
57 Mr Boyd submitted that this evidence showed the Solicitor to have contravened s 61(2) by disbursing funds held on behalf of Sydney Waterfront Developments without the authority of a direction from that company.

58 We recognise that, for the reasons outlined above at [49], a direction authorising these payments from the proceeds of sale might well have been given by Mr Manny without any written record being retained by the Solicitor. But in this instance, the Solicitor himself advised Ms Sayer in writing that he had given Mr Manny a statement which did not mention any of these payments. In so doing, he made no reference to any direction, written or oral, authorising them to be made. It is relevant too that both the statement given to Mr Manny and the Solicitor’s advice to Ms Sayer referred to his claim that to be owed money out of the proceeds of sale.

59 In these circumstances, we are prepared to infer that no direction, written or oral, was ever given by Sydney Waterfront Developments authorising these payments. We make this finding paying due attention to the principle that we must be ‘comfortably satisfied’.

60 On these grounds, we find that the Solicitor contravened s 61(2) of the Act in making these payments, totalling $98,593.44, on his own behalf. For reasons set out earlier, we find that the contravention was wilful. The Solicitor accordingly committed professional misconduct under s 61(8).

61 Breach of s 62. In this connection, the allegation particularised in the Information relates to a payment by cheque with which we have already dealt (at [18 – 24] above). This is the cheque for $66,049.92 drawn by the Solicitor on 27 March 2001 from the Trust Ledger Account of Sydney Waterfront Developments relating to the sale of 337 Edinburgh Road. It was shown in the Trust Account records to have been payable to Glorious Constructions, but was in fact paid to the National Bank for the purposes of completing the purchase of 47 Headland Road.

62 As we understand it, the allegation of a breach of s 62 set out in this section of the Particulars simply replicates the allegation that we have already upheld in connection with the purchase of 47 Headland Road. It therefore does not require further attention.

4. Kay June Foster

63 The Information alleged in this context that the Solicitor forged the signature of Ms Foster, his client, on a registered mortgage and on two variations of that mortgage, and that he improperly used Ms Foster’s title document to obtain moneys for his own benefit.

64 The registered mortgage in question was of property owned by Ms Foster at 4/1096 Collaroy Road, Collaroy. It was dated 15 September 2000 and was expressed to secure a loan of $500,000 for one year granted by Meyer Scott Holdings Pty Limited and Brett Scott Mortgage Consultants Pty Limited.

65 The first variation of mortgage, dated 17 September 2001, extended the term of the loan until 15 September 2002. The second variation, dated 7 December 2001, increased the principal sum of the loan to $600,000.

66 The mortgage and both variations were arranged by the Solicitor, to whom Ms Foster had entrusted the certificate of title to be kept in safe custody. Ms Foster was overseas during the period of these transactions and was unaware that they had been effected. She did not find out about them until she received a letter dated 25 June 2002 from Eclipse Prudent Mortgage Corporation Limited, which had taken an assignment of the mortgage. This letter advised her that the Solicitor has been paying the monthly instalments of interest due on the mortgage, but that the most recent cheque sent by him had been dishonoured.

67 When Ms Foster asked the Solicitor about this, he said that there must have been some mistake and produced to her a document which he claimed to be a copy of the unencumbered certificate of title to her property, but was in fact a fake document incorporating details from another certificate of title. At a subsequent meeting, he confessed to her that he had misled her by showing her the fake document.

68 The mortgage of Ms Foster’s property and both variations contain a signature purporting to be that of Ms Foster. The signature on the mortgage purports to have been witnessed by Mr Timothy Crumpton, of Level 7, 55 Clarence Street, Sydney. The signature on the two variations purports to have been witnessed by the Solicitor.

69 In a letter dated 21 August 2002 and faxed from Hoopers Lawyers on that day, the Solicitor requested the Law Society to remove a Mareva order that it had obtained in the course of Supreme Court proceedings against him. He enclosed an affidavit setting out his financial position and draft consent orders. He also stated that ‘the Foster loan’ had been discharged and requested that the Law Society ‘refer to the explanation regarding the events of the loan’, which was also enclosed with the letter.

70 This ‘explanation’ purports to describe the circumstances in which the loan was arranged by the Solicitor and the mortgage documents were executed, in each case without the knowledge or consent of Ms Foster. It states that the Solicitor used the moneys advanced by the mortgagee for his own benefit.

71 The ‘explanation’ is not signed and authorship is not attributed. Throughout it, the Solicitor is referred to in the third person, as ‘RFH’. But at one point in an accompanying page headed ‘Chronological order of events’, what appears to be an extract from a diary uses ‘I’ and ‘me’ to describe the Solicitor. In addition, the text of the explanation includes the following rather mysterious statement: ‘In all my years of property development and legal work, I have never known a situation to have occurred whereby RFH is involved.’

72 This ‘explanation’ includes an express statement, made with reference to the mortgage of 4/1096 Collaroy Road, Collaroy, that ‘RFH forged Kay’s signature and witness’.

73 We are satisfied that this ‘explanation’, read in conjunction with the Solicitor’s letter of 21 August 2002 to the Law Society, contains statements which constitute admissions by him that he forged Ms Foster’s signature on the mortgage of her property and that he improperly used her certificate of title to obtain the moneys advanced pursuant to the mortgage for his own benefit. We make this finding even though the ‘explanation’ refers to him, except in a few instances, as ‘RFH’. The terms of his letter to the Law Society sufficiently acknowledge that the ‘explanation’ should be read as a document that at the very least he endorsed, whether or not he actually prepared it.

74 In a letter dated 12 June 2003 to Ms Sayer, Mr Timothy Crumpton, a lawyer practising at this address in Clarence Street, indicated that the signature on the mortgage was not his and that he had never heard of nor met Ms Foster. The ‘explanation’ contains a statement that the Solicitor forged the signature. However, since an allegation that the Solicitor forged the signature of a witness is not included in the grounds of the Information, this aspect of his behaviour does not form part of the case against him.

75 The allegation in the Information that the Solicitor forged Ms Foster’s signature on the two variations of mortgage is not referred to in the ‘explanation’. Having regard, however, to the fact that both of these two signatures closely resemble the forged signature on the mortgage, and also to the general sequence of events outlined in the ‘explanation’, we find that he did forge these signatures also.

76 The ‘explanation’ contains a number of assertions by way of mitigation of the Solicitor’s behaviour. These include the following: that Ms Foster and her husband had been very close friends of the Solicitor for many years; that before going overseas towards the end of 2000 she had authorised him to borrow money on the security of her property at 4/1096 Collaroy Road, Collaroy and had given him a power of attorney to permit this; that on account of a series of misfortunes he had been in desperate need of money at this time; that when he came to completing the mortgage he realised that he could not locate the power of attorney; that he recognised that his action in then forging the signatures on the mortgage was ‘the biggest mistake of his life’ and was ‘inexcusable’; that he discharged the mortgage out of his own money on 16 August 2002; and that Mr and Ms Foster had forgiven him and continued to be close friends of his.

77 There is no doubt, however, that the conduct alleged in this matter against the Solicitor, which we have found to be proved, is professional misconduct of a most serious nature. There are numerous authorities in which forgery of a signature on a legal document or the deliberate falsification of a document has been held to be professional misconduct: see eg Council of the Law Society of New South Wales v Foreman (No 2) (1994) 34 NSWLR 408; Stanoevski v Law Society of New South Wales (No 2) (LSD) [2004] NSWADTAP 35. This conclusion has been reached even when the forgery has been committed without any intention of deriving personal benefit: see eg Law Society of New South Wales v Young [2001] NSWADATAP 38 at [63]. Here, the purpose of the forgery was to secure financial benefit for the Solicitor through fraudulent use of his client’s property.

Admissibility of copy of ‘explanation’ sent to Ms Sayer

78 The document that the Solicitor called an ‘explanation’ of his conduct in relation to Ms Foster’s property was sent by him by fax to Ms Sayer during August 2002. An accompanying handwritten note indicated that he was the sender of the fax, but was not signed. Both the ‘explanation’ and this note formed part of the Sayer report.

79 Because, as outlined above, the ‘explanation’ was also sent to the Law Society, in circumstances showing clearly that, whether or not he prepared it, he endorsed its contents, the Law Society did not have to establish that it was admissible in the proceedings as a component of the Sayer report.

80 Mr Boyd requested, however, that we give a ruling as to whether it might have been rendered inadmissible by s 96(5) of the Act, having regard to the fact that Ms Sayer’s role in this matter was that of a receiver appointed by the Supreme Court under s 92.

81 After giving this request careful consideration, we have decided, however, that it would not be appropriate for us to accede to it. Our reasons are as follows.

82 First and foremost, a resolution of the question posed is not required for these proceedings, since we have accepted Mr Boyd’s submission that the ‘explanation’ is admissible in another form. Furthermore, the question has not been argued in detail before us. It does not appear to be straightforward. On a brief examination, the answer to it seems to depend on the interpretation of a number of detailed provisions of the Act. These include s 96 itself, but also the definitions of ‘receivable property’ and ‘property, in relation to a solicitor’ in s 91 and a number of provisions in Part 7 of the Act (relating to the Solicitors’ Fidelity Fund), to which the latter definition refers. Finally, when the recently enacted Legal Profession Act 2004 comes into force (this is anticipated to be before the end of this year), the operations of receivers will be governed by a wholly new set of provisions contained in Chapter 5 of that Act.

The orders that we should make

83 As indicated above, the Law Society sought orders that the name of the Solicitor be removed from the Roll of Legal Practitioners and that he pay the Law Society’s costs.

84 It is well established that the test to be applied in determining whether a practitioner should be struck off the roll is present unfitness to be on the roll, not unfitness at the time of the professional misconduct alleged and proved in the proceedings (see, for example, A Solicitor v Council of the Law Society of New South Wales [2004] HCA 1 at [21], [38]).

85 We have no doubt that at the time when the various acts of the Solicitor constituting misconduct occurred – that is, between December 1999 and September 2001 – this misconduct was of such seriousness that he could not be held a fit and proper person to remain on the roll.

86 In relation to the wilful breaches of ss 61 and 62 of the Act, we refer to the following dictum of Kirby P in Dupal v Law Society of New South Wales, Unreported, 26 April 1990, Court of Appeal, NSW (BC9002508) at 4:

True, each case must depend on its unique facts. But for the reasons which I have stated, the normal consequence of the misuse of entrusted funds by a solicitor, and a finding of wilful breaches of the statutory prohibition in that regard, is removal of the name of the solicitor from the roll.
87 The other members of the Court of Appeal, Priestley and Handley JJA, delivered judgments concurring with Kirby P’s conclusion in this case that the solicitor’s appeal against an order removing his name from the roll should be dismissed. At 22, Handley JA said that the Court ‘would be departing from a long course of authority’ if it were to substitute a period of suspension from practice for the order of removal.

88 The Court of Appeal’s decision in Law Society of New South Wales v Dennis (1981) 7 Fam LR 417 (see [44] above]) provides ample authority for holding that the Solicitor’s participation in a dishonest scheme to mislead the Colonial State Bank as to the true value of property to be provided as security for a loan was not merely professional misconduct, but grounds in itself for holding him not to be fit and proper to remain on the roll.

89 With regard to the Solicitor’s forgery of his client’s signature, carried out in order to obtain money for his own purposes, we need refer only to the majority judgments of the Court of Appeal in Council of the Law Society of New South Wales v Foreman (No 2) (1994) 34 NSWLR 408. The particular circumstances of that case differed in some ways from those before us. Like the present case, it involved the deliberate falsification of a document by a solicitor for the solicitor’s own benefit, but the parties suffering from the deception included the Family Court and fellow-practitioners of the solicitor as well as her client. What matters for present purposes is the Court’s adherence to the proposition that even a single intentional failure by a practitioner to maintain standards of honesty and integrity in dealing with clients, fellow-practitioners and/or the court may provide grounds for an order for removal from the roll (see eg the judgment of Giles A-JA at 471-472)

90 The Solicitor did not appear in these proceedings. Accordingly, no evidence was tendered on his behalf, and no submissions were advanced, to seek to persuade us that despite clear indications of unfitness to practise at the time of his misconduct he is now a fit and proper person to remain on the roll. As outlined above at [76], some sections of the ‘explanation’ of his dealings with Ms Foster’s property were apparently intended to mitigate his conduct in that connection. But they omitted important aspects of this conduct: for example, they did not refer at all to his forgery of Ms Foster’s signatures on the two variations of the mortgage, nor to his having presented a fake certificate of title to her when she asked why the mortgagee had called on her for a payment of interest. For this reason, nothing said in these sections of the ‘explanation’ provides any reason for believing that his professional behaviour in the future might be of a higher standard than it has been in the past.

91 We accordingly find that the Solicitor is not a fit and proper person to remain on the roll.

92 Our orders are (1) that the name of the Solicitor be removed from the Roll of Legal Practitioners and (2) that he pay the Law Society’s costs of these proceedings, as agreed or assessed.