Law Society of New South Wales v Hughes

[1999] NSWADT 44

Set aside by Appeal: Decision not set aside by appeal. On 16/07/2002 Appeal Panel for the purpose only of determining jurisdiction of the Appeal Panel, find that the decision and orders of the Tribunal made 29 June 1999 are void

CITATION:	Law Society of New South Wales -v- Hughes [1999] NSWADT 44
DIVISION:	Legal Services
APPLICANT:	The Council of the Law Society of New South Wales
RESPONDENT:	Colin Frederick Hughes
FILE NUMBER:	9436, 9636 and 9806
HEARING DATES:	03/23/1998; 03/24/1998; 03/25/1998; 03/30/1998; 03/31/1998; 06/09/1998; 06/10/1998; 06/11/1998; 06/12/1998; 06/13/1998; 12/18/1998; 03/05/1999; 05/10/1999
SUBMISSIONS CLOSED:	05/10/1999
DATE OF DECISION:	29 June 1999
BEFORE:	G B Molloy Presiding Judicial Member C Staff - Judicial Member D Mahon - Member
PRIMARY LEGISLATION:	Legal Profession Act 1987
APPLICATION:	Conduct calculated to mislead Court; Default error in carrying out clients' instructions; Gross overcharging; Prescribed statutory/professional rules breach; Professional misconduct - solicitor ; Wrongful application of trust/controlled money or other valuable property -
MATTER FOR DECISION:	Principal matter
REPRESENTATION:	Applicant: I Wales S C instructed by R J Collins Respondent: In person
ORDERS:	1. The name of Colin Frederick Hughes be and the same is removed from the Roll of Legal Practitioners in New South Wales. 2. The practitioner pay the costs of the Law Society of the whole of the proceedings but excluding those costs referrable to those portions of the hearing on the merits in March and June 1998 referrable to the matters of Podder, Lo, Juntunen, Padovan and the matters pertaining to the computer complaint in No. 6 of 1998. 3. Pursuant to the provisions of Section 171 B of the Legal Profession Act the Tribunal orders that the evidence given 10 May 1999 and the transcript of that evidence, the Application by the Practitioner filed 7 April 1998, the Submissions annexed to it, the copy letter from the Law Society to the practitioner 9 December 1998, the copy letter from Messrs Toop, Harrison & Metcalfe to the Legal Services Commissioner of 26 February 1998, be not published or available to the public save and except that the portion of the material in the transcript 10 May 1999 relating to Mortina Lo is not included in the above orders. 4. All applications made by the practitioner for costs are dismissed.

1 "The idea that guilty conduct may betoken guilt is a very old and simple one, founded on common sense. Equally old and simple is the recognition that what looks like guilty conduct may have an innocent explanation, so that care is necessary" per Brooking JA in R -v- Chan, Victorian Court of Appeal, 12 March 1998.

HISTORY:

2 The proceedings against this practitioner were long and involved. The Complaint in matter 36 of 1994 was filed 30 June 1994, the Information in matter 36 of 1996 on 25 September 1996 and in matter 6 of 1998 on 20 February 1998. Prior to the commencement of the hearing on 23 March 1998 the matters were called over before the Registrar or Chairman and directions made on no less than 28 occasions. There was an ex parte hearing on 22 November 1994 in matter 36 of 1994, there was a contested application by the practitioner to re-open heard 3 March 1995 and determined in his favour, there was a further ex parte hearing on 3 and 4 June 1997 in matters 36 of 1994 and 36 of 1996 when the practitioner appeared in person on 3 June but, on his application that the matters proceed ex parte, left the hearing at 12.44pm on that day, there was a further contested application by the practitioner to re-open heard 30 June 1997 and determined in his favour 29 August 1997, there were numerous quite specific orders made for the production by the practitioner of various nominated items of computer hardware which orders were not complied with in all respects until at the hearing itself, there was a ten day hearing on the merits commencing 23 March 1998 and ultimately concluding 13 June 1998 and (if more is needed) four subsequent applications (one by the Law Society and three by the practitioner) the last being heard 10 May 1999.

3 Throughout the whole of these proceedings, except at one directions hearing, the practitioner was unrepresented. On numerous occasions he was invited to obtain legal representation. On many of those occasions the practitioner indicated that he was obtaining advice from counsel but on no occasion did counsel appear and when the matter was finally heard the practitioner represented himself.

4 It is not to the point that the practitioner conducted the final 10 day hearing in a robust and professional way having regard to the case that he was seeking to mount in answer to the complaints made against him by the Law Society. The Tribunal is minded to observe, however, that these proceedings could well have been disposed of at a much earlier date and perhaps at considerably less expense and with considerably fewer interlocutory skirmishes had the practitioner been properly represented. In addition we are of the very clear view that properly advised the practitioner would not have brought any of his three applications after the hearing was concluded.

5 It is the experience of this Tribunal and, dare we say, the experience of Court Arbitrators and Judges, that litigants in person often prolong, not only the preliminary interlocutory stages, but also the final hearing. As a general rule a litigant in person does a disservice to him/herself because they venture into waters in which they have little experience and/or attempt to address matters, often at great length, which are really not issues in the proceedings.

6 In the case of this specialist Tribunal, although it is true that almost all persons brought before it are legal practitioners, there are many legal practitioners whose litigation and advocacy experience is limited or non-existent and they, in particular, are generally well advised to obtain specialist representation.

7 All that having been said, however, this legal practitioner represented himself and at the hearing conducted his case in an appropriate way as he saw it but in our view more than considerable time was wasted on interlocutory matters and on the three applications subsequent to the conclusion of the hearing.

8 As can be seen from the above history there was in fact an ex parte hearing on 22 November 1994 in matter 36 of 1994. Notification had been given to the practitioner to attend, he failed to attend, and the hearing dealing with the matters of Podder, Lowe and Juntunen was completed in the absence of the practitioner.

9 The practitioner subsequently applied to re-open the case. Judgment had not been delivered. The Law Society opposed the practitioner’s application but the Tribunal was of a mind to allow the practitioner in the interests of justice to re-open and conduct his defence. A similar result was reached, this time with more difficulty as a result of the hearing 3 June 1997, after the practitioner on his own volition left the hearing half way through the first hearing day, but again he was permitted to re-open.

10 Support for that approach (if support is truly necessary) can be found in the following cases:

Taylor -v- Taylor (1980 FLC 90674), a case where the husband in Family Law proceedings failed to appear, a Decree Nisi was pronounced and certain property orders made in his absence. The husband’s appeal to the High Court was allowed and the original orders for property transfer were set aside. The Judgments of the High Court are replete with appropriate quotable observations: ".... it was prima facie the right of each party to have the proceedings heard in his or her presence and that justice to both parties requires that each party should be entitled to present his or her case" (per Mason J. at 78,596); "The appellant had filed affidavit material which showed that the facts of the case were seriously in contest... In such a case, assuming that there is a real question to be tried, justice requires that the order, having been made in breach of a fundamental principle of natural justice, should be set aside, and that the matter should be reconsidered on its merits" (per Stephen J. at 58,592); and "It is a fundamental principle of justice that a party affected must have the opportunity to be heard before any order is made against him (unless there are special circumstances ...)...However, there is a long standing principle that an order made against an absent party may be set aside where the absence is not the fault of the other party or the Court (even where the absence was the absent party’s fault), or where the absence is excusable, and considerations of delay, acquiescence or prejudice are not countervailing" (per Murphy J. at 78,598).

Cameron -v- Cole (1994) 68 CLR 571 at 598, where Rich J. said: "It is a fundamental principle of natural justice applicable to all courts whether superior or inferior that a person against whom a claim or charge is made must be given a reasonable opportunity of appearing and presenting his case."

The Commissioner of Police -v- Tanos (1958) 98 CLR 383 at 395, where Dixon C.J. and Webb J. said that: "....It is a deep-rooted principle of the law that before anyone can be punished or prejudiced in his person or property by any judicial or quasi-judicial proceeding he must be afforded an adequate opportunity of being heard."

11 The importance of justice in criminal trials, and we do not believe that the principle is limited to criminal trials, was expressed by Justice Kirby in Frugtniet -v- Victoria (1997) 71 ALJR 1598 at 1603: "There is also involved the undoubted right of the community to have a manifestly fair trial, which conforms to the law, of serious charges presented by the Crown. I also consider that there is involved a question of the propriety of Courts being required to undertake proceedings which are otherwise than manifestly just and fair."

12 Proceedings before this Tribunal are serious. The consequences of an adverse finding against a practitioner can be catastrophic. Although it is true, as the Tribunal pointed out in Attorney General -v- Gouder (No. 23 of 1995, 11 November 1996,(unreported)) that "(r)eference to criminal standards of proof are sometimes unwarranted, professional disciplinary matters can often have grave consequences for the practitioner. They may affect his/her reputation and livelihood" and one should view "with reservation and care any attempt to remove from a respondent practitioner the protection of procedural fairness to which the practitioner is entitled."

13 Finally on this question reference can be made to Intendo Co Limited -v- Centronics Systems Pty Limited (No 2) (1994) ALJR 918 where the High Court quoting from Wentworth -v- Woollahra Municipal Council (1982) 149 CLR 672 at 684, expressed its reluctance to open proceedings in which a judgment had been pronounced, stating: "The circumstances in which this Court will re-open a judgment which it has pronounced are extremely rare. The public interest in maintaining the finality of litigation necessarily means that the power to re-open to enable a re-hearing must be exercised with great caution. Generally speaking, it will not be exercised unless the applicant can show that by accident without fault on his part he has not been heard." It would seem from this pronouncement that even an entered judgment can be opened in exceptional circumstances.

14 The requirements of natural justice are not fixed and immutable, but are dependent on and will vary with the circumstances and nature of the case. In Kioa -v- West (1995) 159 CLR 550, Mason J. said at 584-585: "What is appropriate in terms of natural justice depends on the circumstances of the case, and they will include, inter alia, the nature of the inquiry, the subject matter and the rules under which the decision-maker is acting. The critical question in most cases is not whether the principles of natural justice apply. It is: what does the duty to act fairly require in the circumstances of the case?"

15 In Gas and Fuel Corporation of Victoria -v- Wood Hall (1978) VR 385, Marks J. at 396 described the principles of natural justice as follows:

"There are two rules or principles of natural justice ... the first is that an adjudicator must be disinterested and unbiased. This is expressed in the Latin maxim - nemo judex in causa sua. The second principle is that the parties must be given adequate notice and opportunity to be heard. This in turn is expressed in the familiar Latin maxim - audi alteram partem. ... It is important to bear in mind that each of the two principles may be said to have sub-branches or amplifications. One amplification of the first rule is that justice must not only be done but appear to be done ... sub-branches of the second principle are that each party must be given a fair hearing and a fair opportunity to present its case. Transcending both principles are the notions of fairness and justice only after a full and fair hearing given to all parties."

16 In Ancart Pty Limited -v- Snowy River Council (1995) 39 NSWLR 78 the occupier of a country property sought an injunction to restrain the local council from entering his land to spray weedicide thereon. The occupier succeeded on an ex parte application by obtaining a declaration that it was unlawful for the Council so to enter. The Council cross-claimed for orders setting aside that declaration and declaring its entry to be lawful. Bryson J., in considering the circumstances where a declaratory order made on an ex parte application is open to re-consideration, said at 81: "That order was made on an ex parte application, in which the Defendant (now cross-claimant) was not given any opportunity to appear or to oppose the making of the declaration .... orders made in that way are open to re-consideration if a party affected by them wishes to obtain re-consideration and applies with reasonable promptness. This practise results from the application of the fundamental procedural rule audi alteram partem. A Defendant affected by an ex parte injunction or order is entitled to re-consideration of the question whether the order should have been made on the merits, even if there has been no irregularity in the process in which it was made".

17 In the case before us, the position is even more simple - although the first hearing had in fact completed ex parte, and in the second hearing the practitioner withdrew, in both instances the Tribunal had not delivered its judgment. And this Tribunal adopted the same general principles of justice when permitting the practitioner to argue three further applications (in December 1998, March and May 1999) when unarguably the hearing had finished, the evidence was in, the parties had addressed and the Tribunal was considering its determination.

18 In State of Queensland -v- J L Holdings Pty Limited, Dawson, Gaudron and McHugh JJ said: "Justice is the paramount consideration in determining an application such as the one in question (in this case an application to amend pleadings) ... such an application is not the occasion for the punishment of a party for its mistake or for its delay in making the application. Case management involving as it does the efficiency of the procedures of the Court, was not in this case a relevant consideration. But it should not have been allowed to prevail over the injustice of shutting the applicants out from raising an arguable defence, thus precluding the determination of an issue between the parties."

19 By way of completeness and in case it is suggested that this Tribunal, albeit a statutory body, is not the master of its own fate, we refer to Guss -v- Magistrate’s Court of Victoria and Catz (1997) 6 Magistrates' Cases (Victoria) 81 at 86 where Batt J. in the Supreme Court explored whether a Magistrate’s Court had control of its own proceedings. His Honour found himself bound by the decision of the Victorian Court of Appeal in M -v- M (1993) 1VR 391 at 395, "to the effect that all Courts, including Magistrates’ Courts and like Courts, have control of their own proceedings and may devise a practice for regulating those proceedings that is not inconsistent with their governing Act or what was called in an earlier Full Court decision "the decent administration of justice"."

20 The question always is whether the proposed action of a Court or Tribunal extends its jurisdiction in an impermissible way (Jackson -v- Sterling Industries Limited (1987) 162 CLR 612 at 619) or goes beyond regulation of procedure (see Carsons -v- Martin (1984) 5FCR 235). In that latter case the Full Court of the Federal Court of Australia said, at page 241: "In our opinion a Court exercising jurisdiction conferred by statute has powers expressly or by implication conferred by the legislation which governs it. This is a matter of statutory construction. We are of the opinion also that it has in addition such powers as are incidental and necessary to the exercise of the jurisdiction or the powers so conferred."

21 In all the circumstances, therefore, this Tribunal was of the very clear view that the practitioner in this case was entitled to be heard upon the complaints brought against him. As it turned out, no injustice at all was visited on either party to the proceedings because ultimately the Law Society preferred further charges against the practitioner in proceedings instituted in 1996 and later in 1998. It was convenient, therefore, to hear all of the complaints at the one time, and this we did.

22 It is now appropriate to deal with each of the complaints. Before so doing, however, it is important to recognise that during interlocutory proceedings the Tribunal ordered that the evidence that had been lead on the previous occasions would not be evidence relied upon by the Tribunal at the final hearing so that, in effect, the matter started afresh.

23 It is convenient to deal with the various complaints by firstly addressing the 1994 complaint, then the 1998 complaint and finally, primarily because it was the most serious of the complaints, the 1996 complaint.

Complaint No 36 of 1994

This complaint involved three separate matters.

Podder

24 The practitioner advertised, on a number of occasions, that he would carry out "Conveyancing on House, Home Unit or Residential Land Property Transfers. We charge a flat fee of $500.00". Dr. Podder alleged that he approached the practitioner to carry out a conveyance for the purchase of a business for $155,000.00 after seeing the advertisement. Dr Podder made a statutory declaration. His evidence was that he told the practitioner:

"I am interested in buying a business. I need a practitioner to do the conveyancing. The business is a supermarket at Toongabbie. The purchase price for the business and the stock will be about $300,000.00. I am using some of my cash savings. My wife has a home unit and I have a home unit. These two units will be mortgaged to the Bank. For that the Bank will be giving a loan of $240,000.00. To complete the whole thing, how much would you charge?"

And Dr Podder says that the practitioner replied:


"$500.00. No more, no less."

25 Suffice it to say that the practitioner, although he cannot recall the exact words that he spoke, to the best of his recollection he told Dr Podder that he would need to see the documentation, that he would "try to keep the fees within $500.00", that he could not specifically deny that he used the words "$500.00. No more and no less" but he does not recollect so doing, particularly so in the context of the total charge for completing the business purchase transaction.

26 The practitioner’s evidence indicated numerous attendances with regard to the purchase contract, mortgage documents, bills of exchange documentation in connection with proposed finance arrangements, business contract, a new Lease, stamp duty, proposals to incorporate, a Commonwealth Employment Service Subsidy, and so on.

27 On 29 September 1992 Dr Podder sent to his Bank a form of authority in the following words:

"I authorise the State Bank to draw money from my account for settlement of the purchase of Payless Supermarket at Toongabbie."

28 He could not recollect how he came to give that authority to the Bank or whether it was the Bank’s suggestion or the practitioner’s suggestion. However, on or shortly after settlement the practitioner obtained from the Bank payment of his professional charges and expenses in total $4,721.00. He forwarded a detailed letter to Dr Podder on 8 October 1992 setting out the adjustments of stock, how the purchase moneys were divided, the amount for stamp duty, and so on, a settlement statement and a memorandum of his professional fees. Dr Podder complains that the receipt of those documents was the first time that he realised that the practitioner had charged in excess of $500.00 "as I had understood to be the arrangement from my early conversation with him" and that the costs had been withdrawn direct from his Bank.

29 The practitioner denies that he knew anything about the existence of the written authority to the Bank but the matter progressed to settlement in the usual way, the Bank provided the funds on settlement (other than the moneys provided by Dr Podder from his own resources) and the fees were also paid from the Bank advance.

30 Clearly there was some sort of break-down in communication between the practitioner and Dr Podder.

31 The case against the practitioner depends upon the Tribunal accepting that the practitioner quoted the sum of $500.00 in respect of his professional charges. Dr Podder gave evidence at the ex parte hearing on 22 November, 1994. His evidence was not challenged in that he was not then the subject of cross-examination. The United States Supreme Court pointed out in Daubert -v- Merrell Dow Pharmaceuticals (113 SCt 2786 (1993)) that " ... vigorous cross-examination, presentation of contrary evidence and careful instruction on the burden of proof are the traditional and appropriate means of attacking shaky but admissible evidence."

32 The primary allegation against this practitioner, without further testing, appears to us to be improbable. The oral evidence given ex parte was not available at the final hearing, it being excluded by direction. Dr Podder was not available to give evidence at the full hearing and we are not satisfied to the requisite standard of proof against the practitioner that this ground is made out. It is fair to point out that we indicated, during the course of the hearing, that we would not require the practitioner to go into evidence on this count.

Lo

33 The first allegation against the practitioner that he acted for Ms Lo in relation to a real Estate purchase. It is not clear whether he in fact acted for Ms Lo or in reality acted for Ms Lo’s sister and brother-in-law who were in fact the purchasers of the home unit. However, all contact appears to have been between the practitioner and Ms Lo. It appears that Ms Lo, who is herself a senior legal secretary, observed the $500.00 flat fee conveyance advertisements of the practitioner to which we have made reference above. She then found a home unit at Randwick and told the practitioner that "We’d like to exchange quickly, before the auction." The practitioner said that he wished to order some searches and on 7 December 1992 Ms Lo dropped in some money for that purpose. Two days later she saw the practitioner, who had by that time received the Contract and a Strata Report. The practitioner drew certain matters to her attention including the fact that there was some dampness in the building. This observation was thrown up by the practitioner’s analysis of the Strata Inspection Report. The Report contained this observation:

"Managing agents submitted the Report filed by Richard Cortis Pty Limited in regards to dampness ... It was decided that this time the problems seemed to be under control and that all the proprietors will look after their own minor problems at this stage."

With respect, not something one would necessarily get too excited about. However, Ms Lo deposed that she told the practitioner that she was concerned about the dampness and the practitioner replied, "Don’t be worried about that. I have done many of these before and that’s normal for a building of that age" and that she should not waste her money and time in trying to find out more details. She said the practitioner handed to her a copy of the Strata Report but did not hand to her a copy of the actual Report of Richard Cortis Pty Limited dated 25 October 1989. The practitioner’s evidence was that he had not received that report as part of his enquiries.

34 Ms Lo then says that she obtained a copy of the Cortis Report direct from the strata searcher. She then spoke to Mr Cortis who is alleged to have said:

"I’ve only seen a few of the units, not all of them. However, I would assume that all the units have the same problem but in different degrees. The cost of repair for a unit such as yours would be about $6,000 to $8,000. It could be as high as $10,000 or $20,000 in some cases. ... (in relation to "minor repairs") ... in those cases, about $2,000. However, I wouldn’t know for sure."

35 Ms Lo said that she spoke to her architect who advised her that "The report does cause me some concern; if I were you, I would try and get out of the contract."

36 The gravamen of the Cortis report shows a degree of spalling and the not unreasonable recommendation was that the concrete spalling be repaired. Other recommendations were made which included repairing gutters and downpipes, storm-water drainage, and so on.

37 In our view it is significant that the Cortis report was dated 25 October 1989 and Ms Lo entered into the contract in December in 1992 in circumstances where the Strata Report showed that "the problems seemed to be under control and that all the proprietors will look after their own minor problems at this stage" (which was a resolution of the Body Corporate Council 27 November 1991).

38 Pausing here it is interesting to note that there were in fact two reports, a later report being dated 19 August 1991 which describes an inspection of three of the units and states: "because of the serious consequences of minor water penetration at balcony doors, we recommend that the remaining units in the building be inspected. Generally, in each unit it will be necessary to lift the carpet inside the balcony door and to sound and in some cases excavate and inspect the underlying structural concrete. Some concrete core sampling and chemical analysis should be undertaking to confirm the cause of the spalling and indicate the possible extent of chemical contamination". No reference to this report 19 August 1991 is made in the strata search.

39 Ms Lo wished to "get out of" the contract. She spoke to the practitioner on 14 December 1992 stating that she wanted to get out of the contract "but only if I can, if not I would rather go ahead". There was some subsequent discussions before and after Christmas and it is plain that the practitioner told Ms Lo that he had consulted Counsel. It is pleaded against the practitioner that he had retained counsel without authority.

40 Ms Lo gave oral evidence before us and was cross-examined. We must say at the outset that we were less than impressed with her evidence. For person who had been a legal secretary for 22 years, she was more than a trifle loose with her evidence. For example, she included as part of her material "a true copy of notes which I made in the course of my discussions with Mr Hughes". It was plain from the cross-examination that that statement simply was not true - it was not a contemporaneous record of events and in some cases was simply made up by her own recollection of what would have happened.

41 It is plain from the evidence that Ms Lo wanted an urgent exchange of contracts. She saw the practitioner on 9 December 1992, she signed the contract, and an appropriate S.66W Certificate was given, she specifically instructed the practitioner that she wanted a quick exchange of contracts before auction "as soon as possible" and the practitioner complied with her request by sending the contract off by way of exchange by courier that day. We are not satisfied that the practitioner failed to provide Ms Lo with a full copy of the Strata Inspection Report. We are satisfied that she obtained that copy direct from the strata searchers and we are satisfied that the first the practitioner knew about the content of the Cortis report was when he received it direct from Ms Lo. We are also satisfied that Ms Lo’s enquiries and further researches were of a social and non-professional manner, that none of the professionals had in fact seen the property and that the engineers that she says she discussed the matter with were friends of her mother and she met them just before church on the following Sunday. We must say that it is not a very satisfactory way of dealing with the perceived problem, particularly when Ms Lo says that she relied on their "advice" with a view to instructing the practitioner to rescind the contract.

42 In her letter of complaint to the Law Society 16 February 1993 Ms Lo complained that she was "stuck with a building that requires major repair work to all the units; my own unit costing approximately $6,000 to repair". It was plain from the cross-examination that there was absolutely no evidence at all in support of those propositions. Indeed, not only did she not obtain any quotation to support that statement, but neither she nor the persons on whose behalf she was "acting" lived in the unit and the property was later sold for almost $100,000.00 more than was originally purchased.

43 We are not satisfied that the practitioner retained Counsel without authority and we have formed the very clear view that Ms Lo had some sort of axe to grind, the precise nature of which was not clear to us but was clearly present and the whole dispute between she and the practitioner was really a storm in a teacup, or even a thimble. We suspect that most of the problems that arose were caused by the unseemly haste in rushing into an exchange of contracts without proper preliminary consideration, a problem often encountered by hasty purchasers, often to their own embarrassment and loss. However, that is a commercial decision that purchasers make, and Ms Lo was not by any means a novice in the buying and selling of properties, and it seems to us on a global examination of all of the material, that the advice that was tendered to Ms Lo by the practitioner was not unreasonable and was proper in the circumstances.

44 The only other matter alleged against the practitioner was that he failed to advise Ms Lo "properly" in relation to the interest provisions contained in the contract and that as a result she incurred a liability of $1,283.47 by way of interest penalty and that the practitioner delayed settlement.

45 The evidence on this aspect was a trifle sparse. Ms Lo originally said that the practitioner did not mention anything about interest in his explanation of the contract to her on 9 December. The evidence seems to show that the auction was going to take place on the following day. In her Statutory Declaration she says that she could not recall there being any discussion about the other provisions of the contract. She denied that the practitioner mentioned anything about interest and she said that the reason that she said that she could not recall any discussion about other provisions of the contract because she did not think that there were any other discussions. Indeed, when one looks at paragraph 9 of her Statutory Declaration 22 August 1994, which is some seven lines only in length, it is difficult to conceive that the whole of her conversation with the practitioner about the contract only occupied about six lines of conversation.

46 We are not satisfied to the requisite standard of proof that the Society has discharged its burden of proof in satisfying us that "the Solicitor failed to advise Ms Lo properly in relation to the interest provisions contained in the contract for sale". We are not prepared, on the evidence put before us, to express an opinion whether such failure, if proved, would in any event amount to unsatisfactory professional conduct or professional misconduct. Contracts for the sale and purchase of land contain numerous provisions, many pre-printed and many special conditions that are regularly used by practitioners. It would be difficult we think for this Tribunal to seek to impose upon members of the legal profession an obligation to explain each and every clause in a contract for the sale and purchase of land to their clients. An interest provision would apply if in fact there was a delay in settlement and in circumstances like this where there was such a rush to obtain an exchange of contracts prior to auction a legal practitioner might well be justified in assuming that a purchaser had made all reasonable arrangements so that there would be no delay in completing the purchase. However, that debate can await another occasion.

47 The final claim against the practitioner was that he delayed in settling the matter. We are satisfied that Ms Lo on behalf of the purchasers wanted to rescind the contract if she could, we are satisfied that she knew that counsel’s opinion was being obtained on this aspect, we are not satisfied that there was any overt action taken by the practitioner that delayed settlement contrary to any instructions that he had.

Juntunen

48 The relationship between the practitioner and Ms Juntunen also arose out of the same $500.00 fixed fee conveyance advertisement. But the complaint against the practitioner was nothing to do with that advertisement. It was claimed that the practitioner failed to return telephone calls from the client, failed to advise her with respect to matters of concern pertaining to the state of the sinking fund and apparent deficiencies in the body corporate accounts and failed to "adequately" advise her with respect to early repayment provisions of a mortgage to her lending Bank, failed to provide settlement figures to her such that she was obliged to obtain those figures directly from the vendor's solicitor, failed to attend settlement and threatened to disrupt the settlement by threatening to register a caveat on the title of the property being purchased, that he overcharged by charging $500.00 profit costs and $161.80 disbursements and that he thereby breached Regulation 20 and that the practitioner attempted to coerce Ms Juntunen into withdrawing her complaint to the Law Society.

49 Firstly, we have no difficulty in dismissing the charge that the practitioner overcharged. In our view it cannot be seriously contended that a flat fee advertising advertisement does not entitle the practitioner to make charges for disbursements. The disbursements in this case were $50.00 for a final search, $8.80 for courier fees and $125.00 for miscellaneous faxes, telephone, etc. No time was seriously spent at the hearing supporting or analysing these matters and we have reached the very clear conclusion that even if made out, the facts and issues are de minimus and we dismiss this charge. Consequently we also dismiss the charge under Regulation 20.

50 Ms Juntunen complained that the strata search of the unit that she was purchasing showed that the body corporate had "a history of on-going financial problems". The complaint seems to be that Mr Hughes did not explain the strata search to his client but the highest that her evidence went was that she tried to understand the contents of the strata search (which she picked up on a Friday) over the week-end, telephoned the practitioner on the Monday, asked him to explain the search and then she states, "he then started reading the strata search from the beginning to me over the telephone". It was then alleged that she said to the practitioner, "It sounds that you have not actually looked at the strata search" and the practitioner then hung up. She goes on to say that, "Had the report been explained to me before exchange, I would have had serious doubts about the wisdom of proceeding with the purchase".

51 We are unable to make a finding against this practitioner that he "failed to advise Ms Juntunen of the matters of concern set out in the strata report". There is no doubt the practitioner provided the client with a copy of the report, she does not say that she would not have proceeded with the purchase had she known of the problems prior to exchange and, again, nothing seems to really hang on all of this. There is no doubt that the initial appointment with the practitioner took place on 27 May 1992 and that contracts were exchanged 10 June 1992, the strata search took place on 9 June 1992 and it may well be that the better complaint against the practitioner might have been that he exchanged contracts prior to obtaining the client's instructions on the strata search. However, even that argument does not hold much water because the client has made no complaint in that regard and seems to hold back from the proposition that she would not have proceeded with the purchase had she known of the strata difficulties.

52 Again, there seems to have been a lack of communication between the practitioner and the client but it is curious to observe that although the initial conference and instructions took place 27 May 1992 and contracts were exchanged 10 June 1992 it was only after exchange that Ms Juntunen "tried to contact Mr Hughes by telephone to ask questions regarding the strata search" and one might not unreasonably ask why in the previous two weeks Ms Juntunen had not made any enquiries if she was, as she says, so concerned. It was also interesting to note that in her letter of complaint to the Law Society 14 July 1992 she stated that she told the practitioner that she and the vendor had "agreed for quick settlement" and that she and the practitioner "agreed for two weeks". However, contracts were only exchanged by that two week period. The other, and final observation we would make about all this is that although it was plain from the strata search that Ms Juntunen had actually received from the practitioner 12 June 1992, she does not appear to have made any further comment about it to the practitioner or, indeed, to anybody else during the course of the conveyancing transaction. Indeed, she made an appointment to see the practitioner on 16 June 1992 to sign the Bank mortgage documents.

53 Thereafter Ms Juntunen attempted to change solicitors. In her statutory declaration she alleged that she had been told by her friend "that the Law Society’s advice was that it would be best to proceed with Mr Hughes until completion (of the purchase) and lodge a complaint after settlement. I accepted that advice". This statement can be contrasted with her observation in her letter of complaint to the Society 14 July 1992 to the same effect and compared to her letter to the Society 23 November 1992 when she volunteered that to change solicitors it would have cost her the costs of Mr Hughes "plus all the other fees by another solicitor. Due to the fact that I could not afford this I had no other options but to continue dealing with Mr Hughes". She then went to see the practitioner on 19 June 1992 with respect to the mortgage and then somehow or other during the course of that conference the practitioner said that he could not understand "the early repayment provisions of the mortgage". He said he would contact the Bank and get back to her. She said that the practitioner did not call her back but that settlement was arranged for 2 July 1992 and that "there was no further communication from Mr Hughes, nor did I expect any, assuming that all the necessary arrangements were made".

54 It seems to us that there is absolutely nothing in the argument that the practitioner failed to adequately advise the client in respect to the early repayment provisions of the mortgage. It is plain from the evidence that the client did not expect to hear further from the practitioner and we have inferred that the mortgage documents were in fact signed without further explanation being required. Thereafter there were all sorts of difficulties in arranging settlement. The evidence is somewhat sparse (to say the least) but it would appear that the signed mortgage documents had somehow been lost, although Ms Juntunen admitted (T21) that she had no evidence in support of that conclusion. New documents were apparently executed at the Bank on 2 July 1992.

55 There was quite deal of hearsay evidence admitted about various conversations that allegedly took place between the practitioner and Ms Juntunen's friend. In the circumstance of this case this Tribunal is not prepared to make a finding against this practitioner based on hearsay evidence where the person to whom the statement was allegedly made was not called to give evidence. In addition, the state of the evidence against the practitioner is not entirely clear, particularly the evidence in chief. There was an argument pertaining to the practitioner's costs and although it would appear that the relationship between the practitioner and the client was less than satisfactory, on the evidence before us we are not prepared to make an adverse finding against the practitioner.

56 Apparently there were Court proceedings between the practitioner and the client in the Local Court, presumably relating to costs, the practitioner wrote to the client 17 December 1992 threatening defamation proceedings, suggesting that he had engaged "a senior barrister" and suggesting that the client pay certain moneys in relation to the conveyance and Court costs and "more importantly we require a written apology in respect of your behaviour and in particular your (friend) together with a letter to the Law Society withdrawing your complaint with an apology to the Society in respect to the amount of time and effort wasted". It is this letter that the Society complains amounted to some form of coercion addressed to the client persuading her to withdraw her complaint. We confess we are unable to draw that inference or conclusion from the letter and we dismiss that charge as well.

No. 6 of 1998

57 This was a complaint filed in this Tribunal 20 February 1998 in which the Law Society alleged that "the legal practitioner endeavoured to mislead" the Tribunal by representing to the Tribunal in evidence filed by him that a document entitled "Haval Finance Co: Loan Proposal for Terry Cullen" was a document made in or about December 1993 whereas in fact the document was created in or after December 1995.

58 During the course of interlocutory directions hearings orders were made by consent that certain computer hardware was to be produced by the practitioner to the Tribunal to enable it to be inspected by an expert appointed by the Law Society. It appeared that the Law Society entertained serious doubts on whether the particular document was in fact some sort of forgery and had been created by the practitioner on his computer at a date later than that he alleged, thereby creating a false document.

59 Evidence was put before the Tribunal by a well known forensic document examiner who examined the purported signatures on the document propounded by the practitioner but he could reach no conclusion, one of the problems being that the material before him was a photocopy and it is well known that it is extremely difficult to form a final conclusion on photocopy material, although the examiner's report showed quite a number of pictorial similarities in the signatures.

60 The primary evidence of the Law Society was from its computer expert, Mr Briffa. His evidence was of a highly technical nature and involved an examination of the particular computer. The first matter that Mr Briffa identified was that the voltage switch on the computer had been set to 115 volts. He said that "the switch controlling the input voltage is double recessed and requires a flat bladed screwdriver (or such like) and a very deliberate action to set". He said the effect of connecting the computer to a 240 volt supply when it had been set to 115 volts "would have caused the power supply to 'blow' and possibly, depending on the condition of the power supply, considerable damage to the computer itself". He re-set the voltage switch.

61 The issue that troubled the Law Society arose in this fashion: the Law Society tendered, as part of its case, a document titled "Haval Finance Co ..... Loan Proposal for Terry Cullen". Mr Briffa, in his analysis of the computer, carried an historical search through the hard disk and expressed the expert opinion that the document was created on 22 December 1995. This date is important because the practitioner contends that a Mr Lowe prepared the document and the practitioner settled the document and that Mr Cullen signed the document in late 1993. Mr Cullen, whose purported signature appears on the document, denies signing it. The Law Society contends that the practitioner, in 1995, made up the document and propounded it as a document made and signed in late 1993 and therefore lied to this Tribunal.

62 It must be part of the case for the Law Society in this respect that the signature "T. Cullen" on the document was a forged signature. Some evidence in this regard was placed before us by a handwriting forensic examiner but we have little doubt in concluding that evidence is inconclusive.

63 There are two documents styled "Loan Proposal": one is a longer document dealing with an alleged loan from Cullen to a Ms Swan and a Ms Bezzina for $25,000.00 and the other is a shorter document dealing with an alleged loan from Mr Cullen to Mr Blazevski and Ms Padovan, also in $25,000.00. It is plain from the evidence of the computer expert Mr Briffa that the shorter document was "created" on 22 December 1995 and that was the latest version that had been saved on the hard disk. Indeed, Mr Briffa was refreshingly honest. In answer to this question: "But we will never know whether that is the latest or the original?" he replied: "That is right, that is what my search is centred on and you just can't be any more conclusive than that". He went on to say that it was possible that the document had in fact been created prior to December 1995, he could not say when the longer document was created, perhaps because "the shorter document that I did find could have been a longer document or had different words in it over the course of its life". Indeed, he accepted that the shorter document "could .... have been copied from a diskette or could have been transferred in by modem" and "could have been an older document that came into that computer via a floppy disk or some other method".

64 Mr Briffa was recalled after Mr Cullen and the practitioner had given evidence. He gave evidence to the effect that the computer had "various programs running which would have rendered deleted files unrecoverable" and that "as one amended and re-amends a document .... different bits of the document end up on different segments of the hard disk". This is described as "defragmenting" and there is in fact a computer program called "Defrag" which "brings together in one segment all of the amendments to a document which are scattered over different sections (and) in effect .... tidies up the hard disk (so that the effect is) to make unrecoverable any files that were previously deleted". He accepted that one would need to have considerable experience with computers to know what the defragmentation program "is setting out to achieve, why you might use it and what options were available within it and what each of those options did". However, he did accept that a keen computer buff would understand the various procedures required and would probably know how to do it, particularly in this computer age. He accepted that there is no record of any date on which a computer file was deleted, that any opened temporary file would be over written by a new temporary file so "only the last document you typed will be in that temporary file, unless you instruct it (the computer) to use a different temporary file (so that) every time you open up a document the previous temporary file is replaced by the new temporary file". And he accepted that if data was collected in January but entered into the computer in March, the March date will be the date shown in the computer. So, if one collects data prior to December 1995 and you enter that data into the computer in December 1995 then that is the date that appears on the computer as the date the file was created.

65 One of the problems that was confronted was that the Defrag program was not available until about November 1996. The laptop computer that was analysed by Mr Briffa certainly pre-dated the introduction of that computer program so it was plain that somebody had deliberately installed the Defrag program into this computer. However, this was not an uncommon event. People often reinstall and upgrade computers and one should not draw any adverse conclusion from that installation.

66 To make a finding that the practitioner "endeavoured to mislead" this Tribunal is a fairly serious finding, to say the least. Although the pleading is inelegant in its phraseology, the plain inference is that the practitioner, in representing that the loan proposal document was made in or about December 1993, was in fact lying to this Tribunal. There were factors in the expert evidence of Mr Briffa which may encourage one to form a very strong suspicion that in fact the loan proposal document(s) was created in December 1995. However, findings made against legal practitioners in this Tribunal are not based on suspicion but are based on cogent and persuasive evidence to a high standard of proof, either directly or by necessary inference. This is particularly so when dealing with an allegation of this nature. We are not satisfied that the Law Society has discharged the burden of proof to the standard required to support the allegation. We mean no disrespect by this but we should also observe that we do not believe that the standard has been discharged even to the civil standard of proof at its most elementary level.

67 Consequently, we dismiss the Information filed 20 February 1998.

No 36 of 1996:

Cullen, Gower, Padovan and Related Matters

68 These were by far the more serious of the allegations against the practitioner, occupied more time and were more keenly and strenuously fought; and for obvious reasons. The allegations were serious. In relation to Cullen, it was alleged that the practitioner "wilfully failed to follow (Mr Cullen's) instructions, preferred the interests of (the practitioner's) family members to those of (Mr Cullen), wilfully breached Regulation 27; in relation to Estate Gower the practitioner "was guilty of gross overcharging, wilfully breached Section 61 (and) failed to account for the assets of the Estate"; in relation to Padovan that the practitioner "failed to account for (Ms Padovan"s) funds, wilfully breached Section 61, wilfully breached Section 62, wilfully breached Regulation 9 (trust account)(and) expended (Ms Padovan"s) funds without instructions to do so". In each case these were fully particularised and were the subject of extensive evidence.

Padovan

69 It is convenient to deal firstly with the matter of Padovan. Ms Padovan was a client of the practitioner. Her evidence in chief is that she is the former wife of Mr Boris Padovan who was adjudicated bankrupt on or about 23 September 1991. At the time of his bankruptcy Mr Padovan had a claim against New Zealand Insurance Company arising out of fire damage to a property which he owned at Wyong. After he was made bankrupt Mr Padovan said to Ms Padovan:

"The bankruptcy people want $16,000.00 from the New Zealand insurance claim but my practitioner has suggested that I should try to obtain $16,000.00 from you to pay to the trustee in bankruptcy. With $16,000.00 the claim on New Zealand Insurance will be yours".

70 To say the least, a quite extraordinary proposition. However, it seems that Ms Padovan accepted that proposition and agreed to borrow the $16,000.00 on the security of a home unit that she owned at Liverpool. She says that the practitioner produced to her a document and told her it was for the $16,000.00. She signed that document. In fact it was a mortgage securing $30,000.00 over the Liverpool property from a Mr John Dato.

71 Subsequently, after discussing it with Mr Padovan, the bankrupt, she agreed with his trustee in bankruptcy to purchase for herself the former matrimonial home at Bankstown for $125,000.00. The practitioner acted for her, completion of the purchase took place in about June 1993. It would seem that she also sold the Liverpool unit and from the sale proceeds of that unit $43,970.00 was paid to a Mr John Dato. She then says, curiously, "I have seen what purports to be a mortgage over my Liverpool property in favour of John Dato dated 19 June 1992.... I am now aware that, of the $30,000.00 obtained from Mr Dato, $16,000.00 was paid to the .....trustee in bankruptcy". She does not deny signing the mortgage over her Liverpool property, she does not deny receiving the $30,000.00 from Mr Dato but she says, curiously, that she did not instruct the practitioner to borrow the $30,000.00 on her behalf and that the only instructions that she gave was to borrow the $16,000.00 to buy the New Zealand insurance claim.

72 The mortgage to Mr Dato was unarguably for $30,000.00, it was unarguably lent to Ms Padovan, the rate of interest was 30% plus $2,000.00 application fee, total repayment $43,970.00.

73 It is difficult to conceive of a more curious set of transactions. However, that does not detract from the fact that the transactions had legal force and effect. Ms Padovan was subjected to fairly strenuous cross-examination. On a number of occasions she flatly refused to answer questions relating to a Mr Milani. She constantly said that she was not interested in the affairs of her former husband and yet she entered into this extraordinary arrangement to purchase for $16,000.00 and insurance claim in relation to the Wyong property.

74 It also appears that Mr Padovan had a claim against the Government Insurance Office in relation to a motor vehicle accident, that Ms Padovan had been told by him that it was worth $75,000.00 and that ultimately the judgment of His Honour Judge Newman was only in the sum of $14,000.00. She alleged that the practitioner told her that the GIO was making an offer of $5,000.00 for the motor vehicle claim and that New Zealand Insurance had made an offer of $25,000.00 for the Wyong house claim.

75 It was all a very poor deal anyway because she only received $8,000.00 for the New Zealand Insurance claim (after payment of $12,000.00 costs to another solicitor) even though she had paid $16,000.00 to the trustee in bankruptcy. It appears clear (T120) that Ms Padovan was told by Mr Padovan that he thought the Wyong claim was about $100,000.00, i.e. house and contents. It is not clear from the evidence but it may well be that Mr Padovan estimated the claim for the house at $100,000.00 and the claim for contents at $50,000.00 so that Ms Padovan was putting in $16,000.00 to get back $150,000.00. She alleged that she was promised that return on her investment by both the practitioner and Mr Padovan. As far as the practitioner is concerned we have no hesitation at all in rejecting that evidence. It flies in the face of common sense for the practitioner to have made some sort of promise to Ms Padovan. Throughout the whole of her evidence she seemed very keen to blame the practitioner for the mess that she got into with her former, and bankrupt, husband. And these arrangements were complicated by the fact that the "deal" with her former husband was that she would not only purchase the former matrimonial home for $125,000.00 but that she would also contribute a deposit to a house at Gwandalan so that her son could live with his father Mr Padovan at that address.

76 After considerable prompting Ms Padovan accepted that the $16,000.00 required to purchase the Wyong house insurance claim had to be borrowed on the security of her home unit, and that borrowing would be by way of mortgage. She denied that the mortgage was for $30,000.00, only $16,000.00. She denied that the facility could be increased. She denied that "initially the loan was for one week", she denied that she was told that there was an application fee of $2,000.00, she denied that she knew of the interest rate and she denied that she was told of the reasons why she needed the money. It is plain, however, that the $16,000.00 that she says was borrowed from Mr Dato was used to purchase the Wyong house insurance claim, that it was borrowed "for a very short period of time" because the insurance claim "will come soon".

77 Now it appears that at or about the time when Ms Padovan signed the mortgage over her Bankstown unit to Mr Dato she also signed, as "second mortgagee", a Bill of Sale dated 27 July 1992 wherein Ms Padovan borrowed $30,000.00 from Mr Dato, repayable "within seven days" and bearing interest "at the rate of $30.00 per centum per annum". The Bill of Sale (duly stamped) secured "the claim by (Mr Padovan) in the sum of $150,000.00 against New Zealand Insurance Corporation Limited brought by (Mr Padovan) against the said company in the Common Law Division of the Supreme Court ....", the first charge on that claim being $30,000.00 plus interest in favour of Mr Dato and "the balance of the funds by way of a second charge in favour of the spouse of the Mortgagor Nada Padovan as to a sum such that after the sale of the home unit property of the said Nada Padovan situated 8/10 Goulburn Street Liverpool and the purchase from (Mr Padovan) of the property situated 10 Market Street Bankstown no more than $20,000.00 shall be owed by mortgage to a Bank by the said Nada Padovan".

78 Ms Padovan strenuously denied having signed that Bill of Sale. When shown that document she said, "This is the first time I am seeing this. I haven’t seen this before nor have I heard anything of it before .... and I repeat that I have never ever seen this before or read this or known about this before". We reject that evidence. It is plain to us that Ms Padovan knew, notwithstanding her strenuous and constant protestations to the contrary, exactly what she was doing. She knew that she was borrowing $30,000.00 under the mortgage over her unit from Mr Dato, that money was also secured by a Bill of Sale from Mr Padovan over the Wyong house insurance claim, that she had structured an arrangement as is set out in the schedule to the Bill of Sale. When put under some pressure in the witness box, understandable pressure from the point of view of the practitioner, and when it was plain that she needed a deposit to purchase the Bankstown property, in answer to this question: "If you were buying the Bankstown house and the NZI loan, that loan that cost $16,000.00, why were you borrowing $16,000.00 on mortgage?" She answered: "I did not ask for $16,000.000. What kind of $16,000.00 are you talking about? This is the first time I am hearing about it". At T140 Ms Padovan seems to say that the deposit for the purchase of the Bankstown property was to come from the settlement of the Wyong insurance claim.

79 Ms Padovan admitted that she signed the mortgage to Mr Dato. She denied that she signed it at her own home, she said that she signed it in the practitioner’s office (even though it has clearly a pencilled cross where she is to sign), she could not recall whether anyone was present with her when she signed the document, she admits that she signed another mortgage to Mr Dato, this time in the presence of the practitioner, she denied that she borrowed money from the practitioner but later (T153) admitted that she had borrowed money from him.

80 In the practitioner’s Reply in relation to the $14,000.00 (ie the difference between $30,000.00 lent by Mr Dato and the $16,000.00 used to purchase the Wyong house insurance claim), the practitioner stated that it was appropriated towards outstanding costs and disbursements. In discussion at T164-165 the practitioner explained that by saying that the $14,000.00 was not appropriated towards outstanding costs owing to him by Ms Padovan but outstanding costs owing to him by Mr Padovan, appropriated upon (he said) the joint instructions of Mr and Mrs Padovan. It is unfortunate, that matter having been the subject of discussion between the practitioner and the Tribunal, that the practitioner did not further explore that aspect with Ms Padovan. The question of the payment/appropriation of the $14,000.00 was simply left up in the air, although the inference is tolerably clear that it was appropriated towards costs.

81 There is absolutely no doubt that there was some sort of a scheme between Ms Padovan and her bankrupt husband. What it was is not entirely clear and what it was intended to accomplish was not entirely clear. One may have considerable suspicions. Senior counsel for the Law Society admitted that certainly part of the disputed $14,000.00 "seems to have gone to pay costs attributable to Boris Padovan’s legal problems". He suggested, in submissions, that there was a "hopeless position of conflict of interest in which (the practitioner) had become mired" because he submitted that it would be improbable for Ms Padovan to have agreed to the $14,000.00 being paid in respect of her bankrupt husband’s legal problems.

82 However, in the course of discussion (T586-587) relating to this submitted "hopeless conflict of interest" it was suggested by the Tribunal that it may not necessarily have been a conflict of interest, it may have been a scheme that Ms Padovan and Boris dreamt up. It was then suggested: "(a)nd Mr Hughes was simply carrying out the scheme without any particular blame on anyone, just a scheme that they cooked up to deal with houses and things and Boris has benefitted". Senior counsel for the Law Society conceded that that was a view open to this Tribunal on the evidence.

83 It seems to us that the burden of proof is on the Law Society, there are two competing lines of evidence, there is evidence of a scheme hatched and put into effect between Ms Padovan and her bankrupt husband, that Ms Padovan now wants to blame her solicitor for its failure, and we are simply not satisfied on Ms Padovan’s evidence and the documentation tendered that the case against the practitioner in relation to the Padovan aspect is made out.

84 For the sake of completeness, one of the charges against the practitioner was that he did not keep proper accounting records in relation to the mortgage advance from Mr Dato. We are unable to make a positive finding against the practitioner in this aspect. The mortgage document itself appears to be in regular form, appears to have been signed by all parties, appears to have been stamped. The bill of sale similarly appears to have been signed by all parties, is in regular form and appears to have been stamped. There is no need for us to make a positive finding that the documentation, in particular the mortgage, was genuine but we are not satisfied that it wasn’t a genuine mortgage and we are satisfied that the principal sum of $30,000.00 was disbursed in accordance with the practitioner’s instructions. Consequently, this complaint must also fail.

85 The final primary matters alleged against the practitioner are the matters of Cullen and Estate Gower. It is convenient to deal with these matters in reverse order.

Estate Gower

86 Francis Cameron Gower died intestate on 29 November 1992. Letters of Administration were granted to Allan Gower, the deceased’s brother on 9 September 1993. It was alleged against the practitioner that he acted for the administrator and that he failed to give to the administrator or to any other person any accounting of his dealings with the funds of the deceased’s Estate. The practitioner denied that he acted for the administrator. It is also alleged against the practitioner that he withdrew from his trust account Estate moneys on account of costs and disbursements in the sum of $28,141.49, all without instructions and all without having rendered any bill permitting him so to do and which was in the circumstances a gross overcharge. In his Reply the practitioner agrees that he was the practitioner on the record for the Estate, that his instructions were received from the administrator through the administrator’s own Victorian solicitors Messrs Toop Harris & Metcalfe (so that he was, in effect, an agent), that he drafted a Deed of Settlement in accordance with certain arrangements reached between Mr Allan Gower (the administrator) and Mr Terry Cullen (his client) and that upon making the payments pursuant to that Deed his obligations to the administrator ceased, but he concedes that he should have provided an accounting to the administrator and that in relation to the amounts withdrawn from trust he concedes that no bills of costs were rendered but that he obtained authority to withdraw the various moneys itemised in the Information from Mr Cullen and that in any event he did the work that entitled him to receive the moneys.

87 The primary evidence was given by the administrator Mr Allan Gower in his statutory declaration 14 August 1996 and in a statutory declaration made by his practitioner Ms Margaret Himmelreich also made 14 August 1996. It appears that the administrator instructed his solicitor who in turn instructed Mr Hughes whom he knew to be the solicitor for Mr Terry Cullen, a partner of the deceased. Ms Himmelreich, an employed solicitor of Messrs Toop Harris & Metcalfe, stated that she had received instructions from the administrator and "that by arrangement with (Mr Hughes), the client (Mr Allan Gower) applied for Letters of Administration .... the documentation for and such application being lodged by (Mr Hughes)" in Sydney.

88 The first question is: did the practitioner act as an agent for the Victorian solicitor for the administrator or did he act as the direct solicitor for the administrator? There is no doubt that the Victorian solicitor received direct instructions from Mr Gower. There is no doubt that the Victorian solicitor rendered a bill of costs direct to Mr Gower "of and incidental to acting for the administrator". Unfortunately, Ms Himmelreich’s file does not disclose whether she gave direct instructions to the practitioner to act as her agent or whether she was simply passing on to the practitioner the instructions from the administrator. It may well be that in the scheme of this matter it all doesn’t really matter because what happened subsequently seemed to muddy the waters.

89 The practitioner also acted at all material times for Mr Terry Cullen. Mr Cullen is described as "the domestic friend and assistant with whom the deceased resided for fourteen years". It was plain from the evidence that Mr Cullen and the deceased resided in a de facto same-sex relationship and had a very close relationship that would have entitled Mr Cullen to make a claim upon the Estate. The practitioner acted for Mr Cullen and in correspondence with Ms Himmelreich it was accepted on behalf of the administrator that "approximately one-half of the deceased’s Estate was held in trust on behalf of (Mr Cullen and that the administrator was) willing to accept the sum of $30,000.00, plus any legal costs for which our client (the administrator) may be liable in the administration of the Estate including our costs" as his entitlement in the Estate. The offer was put (14 May 1993) that the administrator and Mr Cullen would join together in an application for administration and that "our client (the administrator Mr Allan Gower) instructs that he has never had any conflict with your client (Mr Terry Cullen, the client of Mr Hughes), and wishes to continue in a cordial relationship".

90 It seems to us, that, on balance it would be difficult not to conclude the practitioner was acting as the agent for the Victorian solicitors for Mr Allan Gower. It is plain from the correspondence that the practitioner clearly acted for Mr Terry Cullen on the settlement of his claim against the Estate, that he clearly prepared the Probate Division documentation and submitted that documentation to the Victorian solicitors for Mr Allan Gower and it is plain from the practitioner’s letter 7 June 1993 that he regarded Mr Gower as the client of the Victorian solicitor but that he would prepare the Probate Division documents and it seems to us he could only do so as agent. In the third paragraph of his letter 7 June 1993 the practitioner said:

"Before our client (Mr Cullen) can be appointed an administrator it would be necessary for an application to be made to the Supreme Court under the Family Provisions Act. To avoid this cost (payable by the Estate) we have made your client (Mr Allan Gower) sole administrator and trust your client will be agreeable".

And this is how the Probate Division application proceeded. Ultimately letters of administration were granted to Mr Allan Gower.

91 The evidence before this Tribunal relating to the relationship between Mr Cullen and the deceased Mr Francis Gower was extensive, was the subject of considerable debate, objections and argument. The practitioner himself wished to explore all of this in considerable and personal detail. But it seems to us that it all really doesn’t matter much because the details of the relationship between various people can only be relevant if, and only if, they impinge upon the conduct of the legal practitioner in relation to his dealings with those persons. There was a considerable amount of evidence placed before us by the practitioner dealing with various people with whom Mr Cullen and the deceased Mr Gower had various relationships. In particular, the practitioner spent considerable time in an endeavour to explain his relationship with a Mr Howard Lowe, at one time a real Estate entrepreneur, agent, financier and a business associate of the practitioner, a Mr Freeman, a Mr Rodda, and so on. We have little doubt that the relationships between these people were in existence but it seems to us, with some notable exceptions, the details are irrelevant to the conduct of the practitioner and what his conduct should have been in the particular circumstances.

92 For example, there was considerable agitation about whether the deceased Francis (Frank) Gower had made a will, whether the will was or was not in a suitcase, whether it had been burned by Mr Cullen, whether the suitcase itself held any documents that may or may not have been relevant, and so on. There was talk of litigation between Mr Cullen and the deceased Frank Gower. The practitioner’s submission was that it was relevant to look at the whole of the picture and the conduct of all of the parties and all of the people involved so that one could determine the motives of the players and be able to understand the role of the practitioner and why he did what he did in all of the circumstances having regard to the fact that the general relationship between many of the main players was not heterosexual.

93 It seems to us, however, that much of that material was irrelevant for the reason that it is the conduct of the practitioner that is before us, not the tangled relationships that the players may or may not have had. The particulars of conduct pleaded against the practitioner are quite precise and it is to those particulars that the practitioner is required to plead by admission or denial or explanation and in our view a complicated dissertation or analysis of personal relationships does not take the matter further.

94 That is not to say, however, that in the mind of the legal practitioner advancing his case they may have been relevant but we are of the respectful view that had the practitioner obtained competent legal advice much of the material sought to be placed before us would not have been led and the time spent on these proceedings would have been substantially reduced.

95 The plain fact of the matter is that as between the administrator (Mr Allan Gower) and Mr Terry Cullen (the claimant against the Estate), the matter was settled pursuant to a Deed in which the administrator as the person entitled under intestacy received $30,000.00 out of an Estate sworn at $120,138.15 with no liabilities and Mr Cullen would receive the balance of the Estate but would pay all the costs fees and disbursements of both Mr Gower and himself. Those costs and disbursements were in fact paid from the Estate moneys.

96 The Deed was signed by Mr Gower, his signature witnessed by his solicitor Ms Himmelreich and dated 30 September 1993. The Deed stated relevantly:

"Upon the administration the Estate of the deceased in accordance with the provisions of this Deed, (Mr Cullen and Mr Gower) hereby mutually covenant to release the other from all claims, demands and actions arising in whatsoever manner from the Estate of the deceased and from all claims arising in relation to the administration of the Estate of the deceased".

97 It is important to recognise that the only claimant referred to in the Affidavit of Assets and Liabilities was Mr Gower. The only other claimant, subsequently appearing, was Mr Cullen who claimed an interest as a person entitled under the Family Provision Act. There were no other claimants, all members of the family of the deceased other than Mr Gower having predeceased the deceased.

98 The practitioner says that in these circumstances he was not required to give to Mr Allan Gower or to any other person any accounting of his dealing with the funds of the deceased Estate. We have reached the very clear view that, having regard to the terms of the Deed, once the payment of $30,000.00 was made to Mr Allan Gower and Mr Cullen paid all Mr Gower’s costs fees and disbursements, then that was the end of the practitioner’s obligations to Mr Allan Gower. It may well be that he is the administrator of the Estate. And it may well be that neither he nor his Victorian solicitor Ms Himmelreich has ever received from the practitioner any accounting of the final distribution of the assets of the Estate. But, on Mr Gower’s own admissions (his statutory declaration 14 August 1996) he understood that Mr Cullen’s savings had been accumulated with the savings of his deceased brother and that "one-half of the Estate was in fact the savings of Mr Cullen" so he, Mr Gower, "agreed to accept the sum of $30,000.00 being one-half of the balance of my entitlement in the Estate". He received that money. His costs fees and disbursements have been paid. Why does he need to receive any accounting? We agree with the practitioner’s submissions to the effect that the accounting to which Mr Gower was entitled he received in the Deed and the subsequent payment made pursuant to the terms of that Deed. At that point of time the balance of the Estate (and it is important to make this observation) was in fact to be paid to Mr Cullen. Therefore, the balance of the Estate, wherever situate, and whether situate in the practitioner’s trust account or in Bank accounts or wherever), was in fact owned by and payable to Mr Cullen.

99 In our view the accounting was completed with the signing and execution of the Deed. Upon the moneys being paid then the balance of the Estate was owned by Mr Cullen and it is to Mr Cullen that the practitioner would have to account. Putting it another way, the practitioner had already accounted to Mr Gower pursuant to the terms of the Deed, Mr Gower had effectively transferred the balance of his entitlement to Mr Cullen, as beneficiary and administrator, and that was the end of his entitlement to know what Mr Cullen did with the balance of the Estate to which he, Mr Cullen, was absolutely entitled.

100 It was said that Mr Gower had an interest in receiving a final accounting because of his role as administrator and to protect the interests of Mr Cullen as effective residual beneficiary. In our view that argument is fallacious because Mr Cullen’s interest had already been protected by Mr Gower signing the Deed.

101 We therefore reject the charge that the practitioner failed to give to Mr Gower any accounting of his dealings with the funds of the Estate.

102 The next question is whether the practitioner needed to account to Mr Cullen. This question is tangled up with the various withdrawals that the practitioner made from his trust account on account of costs and disbursements. If one accepts that the residual balance of the Estate is owned by Mr Cullen pursuant to the terms of the Deed then it would seem plain that the practitioner’s conduct with respect to that balance is, firstly on account of Mr Cullen and, secondly imposes upon the practitioner an obligation to account to Mr Cullen.

103 Mr Cullen made a statutory declaration and various statements which formed part of his declaration. It appears clear from that evidence that he and the deceased Mr Frank Gower lived together for many years. Mr Cullen described the deceased as his "partner" and after Mr Gower passed away Mr Cullen felt depressed and was sitting in Fitzroy Gardens, Kings Cross on a bench when a neighbour, who turned out to be Mr Howard Lowe, started talking to him and introduced him to the practitioner. The practitioner was instructed to act in Mr Gower’s interest "in relation to any claim which (he) may have in relation to the Estate of Frank Gower and for advice regarding the investment of any funds received". There is no question, therefore, that the practitioner acted for Mr Cullen and there is no question that he acted for Mr Cullen in relation to the residual balance of the Estate that was Mr Cullen’s pursuant to the terms of the said Deed. Mr Cullen’s evidence in chief was that he recalls discussing costs with the practitioner in relation to the Gower Estate when he agreed to pay those costs from his share of the Estate. He said he was not told of the amount of those costs nor did he receive any bill. However, he agrees that he signed a document styled "Practitioner’s Fee Agreement" on 30 August 1993 but he says that he did not understand the document and that it was not explained to him by the practitioner.

104 The document itself is a peculiar document. It refers to the "transaction" to which it relates as the "Administration of the Estate of Francis Cameron Gower". It then sets out the practitioner’s "quotation" for his professional work in these terms:

"1. Professional fees in relation to the transaction, including all necessary work to complete the transaction in the normal course.

2. The remainder of the Estate after paying Allan Douglas Gower his entitlement under the Estate and Terry Cullen receiving $10,000.00 in cash and an investment home unit worth not less than Seventy Thousand Dollars ($70,000.00), with a mortgage facility of Twenty Thousand Dollars ($20,000.00) from a Bank or finance supplier and all disbursements, stamp duty or other expenses are paid, including the legal fees of Allan Douglas Gower which shall be paid from the Estate.

3. The practitioner reserves the right to charge additional fees for work outside the normal transaction".

On any view, a most peculiar document and one that could not by any stretch of imagination be regarded as a fee agreement pursuant to the provisions of the Legal Profession Act.

105 It is plain that the document itself fails the essential tests of particularity and ability to quantify. The first paragraph refers simply to "professional fees" but on what basis those fees are to be charged is not clear. It might be argued that as at 30 August 1993 the relevant scale in relation to applications for Probate/Letters of Administration applied, and Schedule Two of the Conveyancing Act would have applied to Estate administration. Even assuming, however, that it could be argued that professional fees so described were capable of calculation and therefore that paragraph of the fee agreement was valid, it would be difficult if not impossible to use the same reasoning for the second paragraph. It is plain from the second paragraph that the words "the remainder of the Estate" was not a fair calculation (bearing in mind the legal costs milieu that applied in August 1993) of what legal professional charges the practitioner would have been reasonably entitled to make for acting on the purchase of an investment home unit for $70,000.00 with a mortgage of $20,000.00 from a Bank or finance supplier, and taking into account the other (but fairly minor) payments. The Estate itself was sworn at $120,138.15. If one deducts $10,000.00 to be given to Mr Cullen in cash, $50,000.00 as part purchase price on the "investment home unit", $30,000.00 to be paid to Mr Allan Gower and his solicitor’s costs of $1,117.39, that leaves $29,020.00 (in round figures) remaining to pay "all disbursements, stamp duty or other expenses" in connection with (presumably) the purchase of the investment home unit. Stamp duty would be in the order of $247.00 and there would be some odd registration fees and the like - even being generous, that would leave about $28,000.00 to meet the legal professional charges of the practitioner.

106 On any view, and absent any memorandum of professional charges (and none was produced) one would not unreasonably think that $28,000.00 (plus) would not be reasonable professional charges for acting for Mr Cullen, and even if one deducts the professional charges in respect of the administration of the Estate (generously one might allow $4,000.00, although this might be too high) it still brings it down to $24,000.00 and one could not run up professional charges of $24,000.00 in acting on the purchase of a home unit with a $20,000.00 Bank or finance mortgage.

107 In drawing the above conclusions we have avoided reference to the definition used by the practitioner in the alleged Fee Agreement of the word "transaction" where he specifically describes it as the administration of the Estate of Francis Cameron Gower. If, on one view, the Agreement was in relation to the administration of the Estate then the paragraph numbered "2" would be irrelevant. However, it is plain that the Agreement was intended in its words to cover all of the activities of the practitioner in the administration of the Estate and in dealing with the balance of the Estate after paying out Mr Gower and his practitioner. That interpretation supports the view that we have expressed previously to the effect that, firstly the practitioner was acting for Mr Cullen, and secondly once he had accounted to Mr Gower through the Deed between Messrs Gower and Cullen then that discharged his obligation to account to Mr Gower, because all that he was doing was then dealing with the interest of Mr Cullen as beneficiary in the Estate, the Estate having been effectively distributed pursuant to the Deed.

108 Furthermore, if one takes into account the amount paid to Mr Gower ($30,000.00) and the amount paid to his solicitors ($1,117.39) the balance of the Estate payable to Mr Cullen as beneficiary was $89,020.76 ("the balance Estate funds") and from this money Mr Cullen was to receive $10,000.00 in cash and $50,000.00 was to be used to purchase "an investment home unit" .

109 There was considerable debate on whether it was indeed Mr Cullen’s signature that appears at the foot of the purported Fee Agreement under the heading "we agree to be bound by the above terms". In Mr Cullen’s statutory declaration 17 September 1996, paragraph 5, he annexes the Fee Agreement and says:

"My signature appears on it ....I was never informed by the solicitor that any document I signed was a costs agreement nor were the terms of any such document ever explained to me".

In the face of that sworn statement it is difficult to draw the conclusion that Mr Cullen did not sign that document. Whether or not he understood it is another thing, but it is plain to us that he did sign the document.

110 Mr Cullen stated that he "cannot read or write properly. I understand that I suffer from dyslexia, as do other relatives of mine. To the best of my knowledge I did not inform (the practitioner) that I could not read or write". There was evidence (by a medical certificate) that Mr Cullen "cannot read or write properly, i.e. is illiterate". Mr Cullen made a number of statements and a number of statutory declarations. He gave sworn evidence before this Tribunal. The practitioner, in his evidence, made it absolutely clear that he was not aware that Mr Cullen could not read or write or was in any way unable to understand what was happening. We accept that the practitioner was so unaware but in the totality of the proceedings before us it seems to us it really does not matter whether Mr Cullen was or was not illiterate, could or could not read or write and so on, simply because, as we have stated above, we are really concerned with the conduct of the practitioner.

111 It is pleaded against the practitioner that he withdrew from his trust account on account of his own professional charges and disbursements the sum of $28,141.49, on the following dates and in the following sums:

12.10.93 $15,000.00

15.10.93 $2,000.00

19.10.93 $1,500.00

20.10.93 $1,071.11

22.10.93 $1,000.00

27.10.93 $180.00

1.11.93 $4,000.00

13.10.93 $1,200.00

4.11.93 $190.38

4.11.93 $1,000.00

5.11.93 $1,000.00

112 The complaint is that these amounts were withdrawn without Mr Cullen’s instructions and without having rendered any prior bill permitting the practitioner to make the withdrawals. Mr Cullen says that he received two bills of costs from the practitioner. It is not clear from the evidence but we assume that those are the bills attached to the statutory declaration of Mr Warren Gillett 25 September 1996, one in the sum of $5,625.00 and the other in the sum of $4,821.00. It one accepts that those bills are proper bills of costs and in proper sums, they only total $10,446.00 and that leaves something in the order of $14,000.00 unaccounted for. We shall return to those bills later.

113 No evidence was placed before us in any admissible form whatsoever that would have remotely justified the withdrawal from the practitioner’s trust account of the amounts specified and on the dates specified. No evidence was put before us that would have permitted us to conclude, with any degree of certainty or with any degree of remote satisfaction, that the amounts withdrawn represented, even remotely, legal professional charges incurred by the practitioner upon the instructions of Mr Cullen. The practitioner’s evidence was to the effect that he had in fact done the work and could prepare an account in detailed form if he had to. We reject absolutely and unequivocally that evidence. The Information was filed in September 1996 and the practitioner had, in our view, more than sufficient time and opportunity to prepare his case with the particularity reasonably required in order to meet this complaint. He did not do so. In our view there was no impediment to this practitioner preparing the bill of costs in detailed form which would have justified his contention that he had carried out legal work which would have amounted to the sums that were withdrawn from his trust account and appropriated by him on or about the dates mentioned. Suffice it to say, for the avoidance of any further doubts, that subsequent to the closure of the case for both the Law Society and the practitioner, the practitioner brought three separate applications to this Tribunal and in not one of those did he seek to argue that he should have yet a further opportunity to prepare a detailed bill. In any event, if he wanted to support the trust withdrawals then that was a matter that he should have dealt with in detail in his Reply and in his evidence.

114 In his Reply the practitioner refers to the bills of costs (in total $10,446.00) but it is plain that those bills of costs, even if properly rendered and sent to Mr Cullen, did not constitute or form part of any of the amounts withdrawn from trust. The practitioner then concedes (with the exception of those two bills) that he did not render bills of costs but says that he did the work that entitled him to receive the money and that he had Mr Cullen’s instructions to withdraw the moneys in question having obtained appropriate authority in various conversations with Mr Cullen. The evidence of all of this is somewhat sparse and confused but we reject the proposition that Mr Cullen authorised at any time the withdrawal of the moneys in question and we find as a fact that the practitioner withdrew the moneys specified without instructions and without rendering any bill to Mr Cullen permitting the practitioner to withdraw the moneys from trust.

115 On the evidence it is plain to us that there has been a misappropriation. What is the quantification of that misappropriation is not clear because there is no doubt that the practitioner did in fact carry out legal work upon Mr Cullen’s instructions, but whether that legal work amounted to $24,000.00 or $26,000.00 or $2,000.00 is not clear on the evidence and whether the bills actually sent to Mr Cullen (in total $10,446.00) are bills which properly set out the legal work done by the practitioner upon instructions is not clear at all. However, it seems to us that once it is established that moneys were withdrawn from trust and paid to the practitioner and that bills of professional charges and expenses were not rendered by that practitioner in support of those withdrawals and in accordance with the provisions of the Legal Profession Act and the relevant Regulations thereunder, then the onus switches to the practitioner to satisfy the Tribunal that the moneys were properly withdrawn or if improperly withdrawn then (in mitigation) the withdrawals can be justified by reference to specific legal work that was done by the practitioner upon the instructions of the client on whose behalf the money is held. There is no doubt that onus was not discharged, and there is no doubt that no reasonable effort was made by the practitioner to discharge it.

116 The practitioner’s case was that he did a lot of work for Mr Cullen. He said that he inspected numerous properties, he said that he assessed the availability and expenses of alternative finance sources, he said that he arranged a home loan, completed documentation, provided advice on the proposed purchase of a Potts Point home unit, he said that he attended interstate to interview various witnesses in the particular socio-sexual milieu allegedly frequented by Mr Cullen and that he interviewed these numerous witnesses at great length but did not at that stage take any statements from them because of "the sensitivity" of the material that was sought to be obtained. All of this may well be true, but whether he did it upon the instructions of Mr Cullen and if he did do it what the proper costs would have been for those attendances was really a matter for the practitioner to discharge by appropriate admissible evidence with particularity. Generalised statements in answer to a complaint of this nature simply are not sufficient to discharge the onus.

117 The next but secondary claim against the practitioner is that, in the circumstances of the case, the amounts withdrawn on account of costs and disbursements represented a gross overcharge. We have endeavoured to demonstrate above that at the very best, and taking into account all of the activities represented in the alleged Fee Agreement, the practitioner would have to account for something like $24,000.00 (plus) at a minimum. In our view not the slightest attempt was made by this practitioner to account, to prepare any sort of admissible bill of costs or to attempt in any real and meaningful way to answer the complaint made against him. It is not relevant to refer to the alleged "sensitivity" of the issues that were raised (if they were raised) by Mr Cullen in his anticipated challenge to the Gower Estate. Any alleged sensitivity could have been easily addressed by this Tribunal making appropriate protective orders in relation to the evidence. Not the slightest attempt was made to bring forward any admissible evidence that would have justified in even the most remote way the professional costs that were appropriated from Mr Cullen’s trust account into the practitioner’s own account. The evidence in our view is overwhelming and there must be a finding that the amount so withdrawn represented a gross overcharge.

118 It was argued that the onus is on the Law Society to prove that there was in the circumstances a gross overcharge. In our view that onus is discharged by the Society proving that the trust withdrawals were made and proving that there were no bills of costs rendered in support of those withdrawals. The onus then switches to the practitioner to justify the professional charges and expenses that would make up each individual withdrawal as at the relevant date or dates of withdrawal. This practitioner failed in the discharge of that onus.

119 Consequently, in the matter of Estate Gower there must be a finding that the practitioner, without instructions and without having rendered any bill permitting him so to do, withdrew from his trust account moneys owned by Mr Terence Cullen between the dates 12.10.93 and 5.11.93, in the total sum of $28,141.49 and there must be a further finding that the practitioner, in relation to those amounts, caused himself to be paid on account of costs and disbursements moneys which represented a gross overcharge. In both cases these are findings of professional misconduct.

120 By way of completion of these aspects, the alleged Fee Agreement made provision for the purchase by Mr Cullen of a home unit and the raising of certain Bank funds in $20,000.00. How Mr Cullen was thought to be able to re-pay the $20,000.00 loan was not explained. However, whatever be the situation, the plain fact is that Mr Cullen did not proceed with the home unit purchase nor did he proceed with the $20,000.00 loan. The Fee Agreement was predicated upon those two events taking place. If one accepts the practitioner’s explanation that one of the conditions upon which he agreed to act for Mr Cullen was that from the balance Estate moneys Mr Cullen would in fact make the home unit purchase (because the late Frank Gower wished to take care of Mr Cullen and ensure his residential future) and that somehow the cost of all of that was factored into the Fee Agreement so that the practitioner would receive the balance available, the Agreement did not take into account the changed circumstances. When asked in cross-examination (T424):

"Did you then regard yourself, when Mr Cullen did not proceed with the home unit purchase, as able to keep for yourself the money which would have been paid for the stamp duty?"

The practitioner answered:

"That is a difficult question. If he buys the home unit you pay the stamp duty but if he doesn’t buy the home unit what happens to the money? Well, I don’t feel as though I am holding it in trust for myself. I don’t feel that I am a beneficiary but I don’t feel I hold it in trust for Mr Cullen either. I think at the end of the day it all goes back to Mr Gower".
That answer demonstrates the total hopelessness of the argument that the Fee Agreement was in fact a costs agreement upon which the practitioner could rely. On any view the balance Estate moneys was owned by Mr Cullen. It was the practitioner’s argument, an argument that we accept, that the settlement Deed between Mr Allan Gower and Mr Terence Cullen not only amounted to a final accounting from the point of view of Mr Gower as administrator, but also was clear evidence that the balance Estate moneys was owned by Mr Cullen. For the practitioner to say that he did not feel that he held it in trust for Mr Cullen but that he thought "at the end of the day it all goes back to Mr Gower" demonstrates to this Tribunal that the Fee Agreement was not in fact a costs agreement and the statement by the practitioner to that effect, although contrary to his early submission relating to the accounting to the administrator, demonstrates that he had little understanding of the duties that he owed to Mr Cullen and Mr Cullen’s absolute right to the balance Estate moneys.

Furthermore, the practitioner admitted that Mr Cullen was not a well educated person, had a gambling problem, had no assets of any significance and was employed as a sandwich hand - how could he possibly pay the Bank mortgage instalments anyway?

121 The practitioner’s evidence was that not only did he do considerable work for Mr Cullen upon instructions in relation to the possible proceedings with respect to Estate Gower but also did work for him in relation to the possible purchase of a interest in a restaurant business with a Mr Freeman. During the whole of his evidence he seemed to confuse his own role with that of Mr Lowe (a person about whom we shall deal with more fully later). He stated that he knew that he had an obligation to Mr Lowe, he knew he "had an ongoing obligation with respect of the purchase of the unit and the costs of that. (He) just found it difficult just putting the regime of legal costs on the purchase of the house, the financing of the unit - the unit ...not the house - and the purchase and financing of the business. (He) didn’t think the legal costs regime applied to it". (T247) The problem with the practitioner’s argument was that according to him the search for the home unit was really a matter between Mr Lowe and Mr Cullen, not the practitioner, and on any view no invoice was ever rendered by Mr Lowe to the practitioner for payment from the trust moneys of Cullen. The difficulty with the practitioner’s argument was that he was unable to differentiate between legal work and work of a non-legal nature which, on his own evidence he had never considered as part of his legal practice but "they were part of the new business that we were dealing with" (as to which see later in this judgment).

122 It is worth exploring the practitioner’s arguments further.

123 There was a considerable body of evidence placed before us pertaining to the whereabouts of an alleged will of the late Frank Gower. Considerable time was spent at the hearing in examining this question. The actions of the late Frank Gower in placing a will (alleged to be his) in a bank safe deposit envelope and the supposition or assumption that because, when opened after his death the safe deposit envelope contained no will, that at some point of time between the date of its deposit and the date of his death he had removed the will and/or created a fresh will, were explored in considerable detail.

Some of the evidence placed before us was direct evidence and some of it was pure supposition. There was even a suggestion that the will had been burnt.

Presumably all of this went towards the argument being advanced by the practitioner that because there was no will available for Probate then it was necessary for him to embark upon lengthy and detailed and expensive enquiries both in this State and in Victoria with a view to protecting the interests of Mr Cullen.

124 Mr Cullen was the subject of extensive and detailed cross-examination. It is difficult to form a clear view on the veracity or otherwise of his evidence. On occasions he was strong and on occasions he varied his evidence. He was quite clear in his view that he had not instructed the practitioner to make enquiries but in all the circumstances there is no requirement for this Tribunal to make any sort of finding in respect of the will or in respect of Mr Cullen’s conduct because the only issue before us is the matters pleaded against the practitioner, his response to those pleadings and his conduct in relation to the Estate of the late Frank Gower and his conduct in relation to the balance Estate moneys clearly the property of Mr Cullen. When one distills the issues in that fashion then most of the arguments adduced by the practitioner become fairly irrelevant because if he did have to make enquiries upon the instructions of Mr Cullen in respect of a proposed claim by Mr Cullen against the Estate, then the proper way was to confirm those instructions and to deal with the matter in an organised and traceable fashion. Unfortunately for the practitioner, and notwithstanding vigorous protestation by him, there are absolutely no diary notes, no corroborative evidence, no copies of airline or travel tickets, no correspondence, no time sheets, not even a file, that would support in any way the practitioner’s argument that the moneys that he appropriated in his trust account in the name of Mr Cullen were justified, even to the slightest degree.

125 In opening, the practitioner, when dealing with the accounting in Estate Gower to Mr Cullen, in answer to the charge that he failed to account to Mr Cullen for the balance of Estate moneys said (T323): "I think I would rely on the costs agreement ....to give a final accounting to Mr Cullen". By that the practitioner was referring to the practitioner’s Fee Agreement to which we may have made reference above and which is clearly not an answer to the charge of failing to account to Mr Cullen.

126 The practitioner further submitted that he was entitled to deduct professional costs from trust moneys if he had submitted an interim or outline bill to the client. He submitted that the Fee Agreement constituted an interim or outline bill. That submission is rejected. It clearly doesn’t. It bears no relationship to and does not purport to be an interim or outline bill and could not possibly be construed as being one.

127 With respect to the charge of gross overcharging the practitioner’s submission was that the Law Society’s obligation was to tell the Tribunal what the practitioner’s charges should have been. He submitted that because the Law Society did not ask him what work he had done for Mr Cullen then it had not particularised what he was supposed to do and charge and therefore there was no prima facie case. He submitted that he did a lot of work for Mr Cullen, not just legal work and it was not just legal work referred to in the deductions that he had made from trust. However, in the absence of any bills of cost, any diary sheets and so on, and having regard to the rejection of the submission that the Fee Agreement constituted an interim or outline bill, then the onus is clearly on the practitioner, not on the Law Society, simply because it is the practitioner who knows what work he did and it is he/she who needs to justify the trust withdrawals. It seems to us quite clear that any withdrawal of professional costs from trust moneys must be justified by the practitioner and if the practitioner is unable to justify those withdrawals then there must be a finding against that practitioner in the terms as sought. Indeed, it is distinctly arguable that there is a prima facie case of misappropriation and although that was not argued by the Law Society it seems to us to be clearly available on the evidence, although we make no specific finding on this.

128 The Law Society submitted that the practitioner has misconceived his obligations. It was said that he owed obligations to the administrator (Mr Allan Gower) and then he owed obligations to Mr Cullen (as beneficiary) and the proper course was to transfer funds to an Estate trust ledger account and then to transfer funds from that account into a separate account held for Mr Cullen. What happened, however, was that there was one single account styled "Francis Gower Estate" which records all moneys going in and out but there was no transfer to a separate Cullen trust ledger account. It was submitted that the practitioner held all of the funds on behalf of the administrator. The settlement Deed settled the obligations between Mr Gower in his capacity as administrator and in his capacity as the only person who could take on intestacy and Mr Cullen as the beneficiary pursuant to the settlement Deed; but it was submitted "that doesn’t alter the obligations of (the practitioner) to account for the money which he received in respect of the Estate .... as the administrator of the Estate" because the administrator had legal obligations to ensure that the Estate was properly administered "so that in respect of Estate accounting methods Mr Gower is the appropriate person to whom an accounting for Estate moneys should be given". Regulation 31 requires persons to account to those in respect of whom moneys are held by practitioners.

However, it is clear to us that although good trust account practice may well have required a separate Cullen trust ledger account the plain fact is that upon the settlement Deed the practitioner had in fact accounted to the administrator in his capacity as administrator and in his capacity as a beneficiary. This accounting was pursuant to the Deed and once that accounting had been provided the administrator had no further right whatsoever to be told or have any interest in the moneys that were unarguably from that point on owned by Mr Cullen. The only question is, therefore, whether the practitioner has accounted to Mr Cullen. In our view that question must be answered in the negative because the Fee Agreement is no answer (for the reason stated) and the withdrawals of moneys from trust are unjustified in that no evidence has been produced that would justify them.

129 There is a further problem with the Estate trust ledger. The receipts column totalled $122,878.40. The outgoings column totals about $200.00 less. In addition, there are two withdrawals of $4,000.00 each both on 1 November 1993. Both of those withdrawals were on account of costs withdrawn by the practitioner and paid to himself. In the pleadings the second withdrawal of $4,000.00 on 1 November 1993 was not pleaded as against the practitioner. The view was taken that perhaps the second entry was a duplication. However, the first entry is in fact out of chronological order. If there was only one withdrawal of $4,000.00 and one of the two entries is a duplication, then there should be a credit in this trust account in favour of Mr Cullen in $4,000.00. Alternatively, if there were in fact two withdrawals of $4,000.00 to the practitioner then in that case he in fact withdrew $8,000.00 on 1 November 1993 for which there has been no accounting and no bill of costs rendered.

The practitioner in evidence described this discrepancy as a "minor accounting or bookkeeping inconsistency" (T386). We do not see it that way. The plain fact is that the practitioner in fact closed his trust account - there are in fact no moneys in credit - and therefore the additional $4,000.00 must have been disposed of. It wasn’t, on any argument, paid to Mr Cullen. It wasn’t, on any argument, paid to any other third party. By necessary inference it must have been appropriated by the practitioner and it falls into the same category of the other withdrawals, with the same results.

130 Finally, and to dispose of the practitioner’s submissions that he was obliged to travel to Melbourne to interview witnesses in order to mount a successful claim by Mr Cullen under the Family Provision Act, it was plain that at the time of the alleged trips and interviews he was within an ace of concluding a settlement between Gower and Cullen. Secondly, his evidence was that he interviewed proposed witnesses in hotels and in non-legal surroundings and took no notes because the witnesses would not have agreed to providing statements on the "sensitive" issues to be led. The practitioner conceded that "all these trips to interview sensitive witnesses would be borne by me without any sort of recovery from the Estate". Even if this was a throw-away line it is plain that the trips and interviews would have been irrecoverable on a party/party basis, a fact not explained to Mr Cullen, and as no records of any description were kept by the practitioner (or, if kept, were not produced at the hearing) he was clearly not in a position of being able to justify any part of the trust withdrawals which may have been referable to the alleged travel and interviews.

Cullen

131 It has been established above that at all material times the practitioner acted for Mr Terence Cullen, one of the beneficiaries pursuant to the Deed entered into between Mr Allan Gower as administrator/sole beneficiary of the Estate of the late Frank Gower and Mr Terence Cullen himself. It has also been established that Mr Cullen was entitled to the balance Estate funds (as defined above) in $89,020.76. Pursuant to the terms of the said Fee Agreement the practitioner’s instructions were to provide to Mr Cullen $10,000.00 in cash (he did) and to purchase for Mr Cullen "an investment home unit worth not less than $70,000.00 with a mortgage facility of $20,000.00 from a Bank or finance supplier".

132 Instead of carrying out those activities what happened was Mr Cullen through the practitioner advanced $25,000.00 (part of the balance Estate funds) to Ms Padovan (to whom reference has been made previously in this judgment) in October 1993 and in December 1993 a further $25,000.00 to Ms Anne Bezzina and/or Ms Patricia Swan, the mother and the sister of the practitioner. The practitioner concedes both of those transactions and that the moneys came from the balance Estate funds.

133 Mr Cullen’s evidence was that the loans were in fact made, that he received various interest installments, in particular $843.75 per quarter in relation to the Padovan loan (the Epitome of Mortgage (prepared by the practitioner) shows it to be a loan to a Mr Blazevski and Ms Padovan, the mortgagee being Mr Cullen, the property secured being properties at Bankstown and Lake Macquarie with quarterly payments and repayable within twelve months on 12 October 1994). Mr Cullen says, as we understood it, that no mortgage in fact had been signed, although an Epitome had been created, and the loan was "secured" by a caveat prepared and lodged by the practitioner on the title of the Lake Macquarie (the Gwandalan) property, being registered I721921, the proprietor being Ms Padovan (although the Epitome of Mortgage shows she and Mr Blazevski as being the mortgagors) and the caveator being Mr Colin Hughes, the practitioner himself, who claims in that caveat "to be entitled to the Estate or interest" pursuant to an "unregistered second mortgage granted by the registered proprietor" the parties to that mortgage being (curiously) "Colin Hughes, solicitor and Nada Padovan".

134 There are a number of additional curious aspects of this registered caveat. Firstly, it is only registered with respect to one property, not the two properties referred to in the Epitome. Secondly, there does not appear to be in fact any unregistered second mortgage. Thirdly, the practitioner himself appears to be the caveator. Fourthly, the statutory declaration made in support of the Estate or interest claimed was in fact declared by a Mr Howard Lowe who describes himself as the "authorised agent of the caveator", the caveator being Mr Hughes himself and, even more strangely, Mr Lowe’s signature is witnessed by Mr Hughes, the practitioner, the caveator!

135 In addition the practitioner submitted that Cullen lent the money to Haval (at Lowe’s instigation) and Haval on-lent it to Padovan. If that claim is to be accepted the statutory declaration is false.

136 With regard to the loan of $25,000.00 to Ms Bezzina and Ms Swan Mr Cullen says that the loan was supposed to be repaid on 1 December 1994. It would appear that neither this loan nor the Padovan have in fact been repaid to Mr Cullen.

137 Mr Cullen alleged that the practitioner told him that both loans would be "secured by a first mortgage", a not unreasonable statement to make and a not unreasonable presumption bearing in mind that $50,000.00 represented a more than substantial portion of the balance Estate moneys. Mr Cullen, not an educated man and a sandwich hand by occupation, found himself in receipt of relatively not insubstantial moneys and it would be not unreasonable for the practitioner to have ensured that any loans made by him would be properly secured. Mr Cullen says that the practitioner advised him to "invest in mortgages as they give the best interest" and told him "in first mortgages you get your interest funds every three months. I know people who want to borrow". Mr Cullen asked him, "Will I get my money back?" and the practitioner replied; "Yes". Mr Cullen said; "Do I need to sign any papers?" and the practitioner replied, "No". Mr Cullen’s evidence was that the practitioner arranged for interest on the two loans to be paid direct into Mr Cullen’s Bank account and there were some problems in relation to the interest payments being made on time.

138 It is at this point of time that it is worth now referring to Mr Howard Lowe. The relationship between the practitioner and Mr Lowe was never very clear to us. At one time or another he was a clerk employed by the practitioner, a real Estate entrepreneur or agent, a business partner of the practitioner and/or a director of an entity known as "Haval Finance Co". It appears from the evidence of Mr Cullen that he came to the practitioner through the good offices of Mr Lowe whom he met while sitting on a bench in a Kings Cross park. Mr Lowe apparently lived across the road from Mr Cullen. Mr Lowe appeared to be an employee of the practitioner and appeared to operate out of the practitioner’s office. What precisely was Mr Lowe’s role in the practitioner’s legal business or any other business was not clear. He seemed to operate some sort of finance company or mortgage broking company. The evidence of the practitioner was that after the Gower settlement he did not want purchasing a home unit for Mr Cullen as a potential professional liability matter of his law practice so he instructed Mr Lowe to locate a home unit for Mr Cullen. Why Mr Lowe had any expertise in this field is not clear but somehow Mr Lowe would locate the unit, would invoice the practitioner direct, the practitioner would attend to the payment of the invoices (presumably from Mr Cullen’s money held in trust) and presumably the purchase money, and also the stamp duty and conveyancing fees, Mr Lowe would obtain the $20,000.00 loan and invoice the practitioner for the brokerage.

139 The practitioner’s evidence in this regard was strangely inconsistent with the two bills of costs rendered to Mr Cullen to which we have made reference above, one in $5,625.00 and the other in $4,821.00. Both of those bills were stated to be in respect of proposed purchases of a home unit, one in particular relating to a home unit in Potts Point, and both made extensive references to "your instructions to locate a satisfactory residential home unit which included 29 inspections and all incidental steps including travel expenses ...." and, in the second case, "your instructions to locate a satisfactory residential home unit which included 26 inspections and negotiation of the purchase price to which you gave your approval and all incidental steps including travel expenses ....". These bill seemed to indicate on their face that it was the practitioner himself who carried out the 29 and 26 inspections respectively, who incurred travel expenses and who in fact carried out the negotiation for the purchase price of the Potts Point property. Clearly those bills make no reference to any activity of Mr Lowe and one would not unreasonably think that if it was Mr Lowe who was carrying out all these extraordinary activities and making some sort of a charge for them and sending the relevant invoices to the practitioner, then those charges and invoices would have been listed as a disbursement/expense. However, clearly the inspections and so on are listed as profit costs so it cannot be argued that the practitioner’s statement that he "did not want buying a home unit as a potential professional liability matter of (his) law practice" has any validity at all.

140 The practitioner accepted that both those accounts were sent out in March 1995 (on a date subsequent to the appointment of a receiver and manager of his practice in January 1995). He submitted that the phraseology used (stating that the accounts were being "resubmitted" when in fact no previous accounts had been rendered) was incorrect but they were not claims for professional fees due and owing but a note to Mr Cullen that the practitioner had in fact paid fees on Mr Cullen’s account, sent because (it was alleged) Mr Cullen was spreading scurrilous untrue rumours in certain hotel bars about the practitioner. He further submitted that he knew that he could not sue on these "resubmitted" accounts because all of Cullen’s obligations to him had been satisfied by the alleged "Fee Agreement". It is plain that submission and explanation is illogical and cannot be accepted. It demonstrates that the practitioner, in March 1995 had no appreciation of his professional/ethical obligations to Mr Cullen and did not understand at all, after all his years in practice, the professionally correct behaviour required of him in the legal profession.

141 The practitioner’s evidence was to the effect that there was an arrangement between he and Mr Cullen to the effect that Mr Cullen’s deceased former partner Frank Gower "would want to look after you and buy you (a) home unit for your security" and that as a result Mr Cullen had "an obligation to now buy the unit". The practitioner’s evidence was that Mr Lowe provided an invoice for his work in locating the unit in $4,650.00 and $975.00 for the financing transaction and those moneys were in fact paid to Mr Lowe. (When pressed on this point (T392) the practitioner admitted that "there was never any formal invoice ....I kept notes of how much I paid him" (from what account we may ask) "and that was about it".) That was intended to refer to the first bill of costs sent to Mr Cullen in $5,265.00, being $4,650.00 in relation to the 29 inspections and $975.00 for "arranging a home loan and assessing the availability and expenses and costs of alternative finance sources ...." and so on. No invoice in support of the practitioner’s evidence was produced. The only material appears to be a bill of costs in those sums stated to be "our costs in respect of your purchase ...." and it is difficult not to reach the conclusion, in the absence of a Lowe invoice, that those were profit costs and not disbursements. A similar observation applies to the second bill for $4,821.00. The practitioner’s evidence was that Mr Cullen gave him a second instruction to purchase a home unit, that the practitioner informed (and instructed) Mr Lowe who again searched for a home unit for Mr Cullen and invoiced the practitioner $3,476.00 and $950.00 "for the financing of this second service". But again no invoice from Mr Lowe was produced and the bill of costs in relation to the Potts Point proposed purchase was titled "To our costs in respect of your proposed purchase of ...." and does not show any disbursements.

142 The practitioner’s evidence was that during 1992 he proposed to close his law practice and that both Mr Lowe and himself would become principals of the firm Haval and that the firm would become "engaged primarily in financial intermediation" and that some clients of the law practice "were proposed to become clients of Haval". The practitioner swore that Mr Lowe was a close friend of his mother, a trusted business adviser and a director of his mother’s family company Anpat Nominees Pty Limited, that his mother nursed Mr Lowe in the last weeks of his life up to the day he died on 11 March 1996. The practitioner also stated that "at about this time" (we assume 1993) he bought into the business of Haval Finance Company "becoming an owner with Lowe through another company Hughes and Associates Legal Services Pty Limited of which Lowe and I were directors and shareholders (and the) change in ownership of Haval occurred on 22 November 1993".

143 Mr Lowe, who features often in the Cullen matter, is unfortunately not with us. Indeed, very little material was put before us signed by Mr Lowe. It is curious that there is so little material from Mr Lowe or signed by him having regard to the close relationship that the practitioner asserts they had.

144 A great deal of evidence and effort was expended in examining the Haval Finance Co peculiarities. The practitioner’s evidence was that Mr Lowe was employed by him part-time as a clerk. The practitioner tendered a copy of the Certificate of Registration of Haval Finance Co. (Note: the business name as registered was "Havel Finance Co" but throughout most of the documentation is described as "Haval Finance Co" but nothing appears to hang upon this). It appears from that document (tendered as part of the practitioner’s case) that the business name was registered 22 November 1993 and that the proprietor was Hughes and Associates Legal Services Pty Limited. So it is not quite right for the practitioner to say that in 1992/1993 he bought into the business of Haval Finance Co unless the business was being conducted prior to the date of its registration. In addition it is important to note that the shareholders and directors of Hughes and Associates Legal Services Pty Limited were Mr Howard Lowe and the practitioner. They were also the directors of Anpat Nominees Pty Limited, a finance company registered 28 July 1992. The secretary of that company was the practitioner.

145 It is necessary again to hark back for a moment to the Fee Agreement propounded by the practitioner against Mr Cullen to make this observation: there is nothing in that Agreement that would indicate that the practitioner had Mr Cullen’s authority to make payments to Mr Lowe or to Haval Finance Co.

146 It is difficult to resist the conclusion that the practitioner and Mr Lowe got together some sort of a scheme to deprive Mr Cullen of the benefits of the balance Estate moneys. There is no doubt that in all the circumstances the balance Estate moneys was not very large and to try and purchase a home unit for $70,000.00 was quite a tall order. One might not unreasonably have concluded that, acting in the best interests of Mr Cullen, a practitioner would need to be very, very careful on how he spent, upon instructions, that money because on any view there was not much money to spend. On the practitioner’s evidence, somehow or other Mr Lowe became involved and sent in (oral?) invoices in total $10,051.00 which, if accepted, would have made a more than substantial hole in the moneys available for Mr Cullen. Even if those invoices had been rendered as the practitioner asserts that would only have left available to Mr Cullen something in the order of ($78,969.76) and bearing in mind that he was only a sandwich hand by occupation it diminished his available equity by $10,051.00 and made it even more difficult for Mr Cullen to raise the $20,000.00 envisaged in the Fee Agreement.

147 And in any event what was Mr Lowe doing running around looking at dozens of units for Mr Cullen and allegedly charging $10,051.00 for his "services", when it would not have cost Mr Cullen anything to have employed a real Estate agent to keep a lookout for a $70,000.00 unit, and at no charge! And as was pointed out in argument (T624), with every visit allegedly made by Mr Lowe Mr Cullen’s very limited finances were "slowly bleeding to death".

148 The next transaction is the $25,000.00 loan to Ms Bezzina and/or Ms Swan, the mother and sister of the practitioner. Again, this was part of the balance Estate moneys owned by Mr Cullen. The practitioner’s evidence was that Mr Lowe told him that he had suggested to Ms Bezzina that she develop a vacant block of land owned by Anpat Nominees Pty Limited (how she was to do this was not entirely clear because Anpat was in fact owned by Mr Lowe and the practitioner) or purchase city units and she or Anpat would borrow through Haval Finance Co. The practitioner said there was a problem with the land development having regard to certain electricity easements. He said that Lowe told him that he had arranged for Mr Cullen to make the loan through Haval. The purpose of that arrangement is not clear to us. What on earth would be the point of arranging for Mr Cullen (whose moneys were fairly precious to him) to lend moneys through Haval when he could lend the moneys direct? The practitioner’s case was that Mr Cullen knew that the law practice was closing. He sought to put in evidence some reasons for that, although in our view the reasoning is not clear, having regard to the evidence that the law practice was allegedly netting $100,000.00 per annum, that buying and selling property added half as much again each year (presumably to the practitioner) and that his "tax position is looking dreadful", that Mr Lowe "spent most of his time organising loans", that his mother knew the law practice was closing and that the practitioner was going to buy into Haval.

149 There was some corroborative evidence in support of the argument that Mr Cullen, prior to the Estate Gower settlement, told the practitioner that, in order to stop him gambling away the Estate money, as a condition of the practitioner acting for him that he, Cullen, must buy a home unit with the money. The practitioner’s evidence was supported by the unchallenged evidence of Mr Paul Freeman(who was not called although required by the Law Society if his evidence was to be let in) in his statutory declaration 7 January 1997 and the practitioner thought that it was in the best interests of Mr Cullen.

150 The property the subject of the electricity difficulties was apparently situated at Blackheath. There was evidence before this Tribunal that Ms Bezzina was the sister (not the mother, as pleaded) of the practitioner and was the daughter of Ms Swan, obviously the mother of the practitioner. Clearly the particulars alleging the reverse are incorrect. The evidence showed that Ms Bezzina had no knowledge of being a co-borrower with Ms Swan of $25,000.00, that she did not receive $25,000.00 or any part of that sum in relation to any borrowing from Mr Cullen, that she did not give any security on any loan to Mr Cullen, that she had no financial interest in the Blackheath property, that she had not made any payments in relation to the loan and had not signed any documents. More importantly, that she had no knowledge at all of a document titled "Epitome of Mortgage" which the evidence shows to have been clearly prepared by the practitioner. This document is dated 3 December 1993, shows the mortgagors as being Ms Swan and Ms Bezzina, the mortgagee being Mr Cullen, there being a registered first mortgage over property at Blackheath for the purpose of "house construction finance" for $25,000.00 repayable in one year on 1 December 1994 with quarterly interest payments of $1,500.00. (Pausing momentarily at this point, not only was there never any mortgage at the date of the epitome, but the property was not even then owned by Swan and Bezzina. Indeed exhibit "N" shows that it was not until 14 February 1994 that the property was transferred, and then only to Ms Swan.)

151 There is no doubt that the Epitome of Mortgage was prepared by and sent by the practitioner to Mr Cullen and received by Mr Cullen. The practitioner argued that the Epitome was evidence, not of a mortgage but of a loan and that it was not prepared by him as a practitioner but as a record of a transaction when he was acting as a director of Haval Finance Co. We unhesitatingly reject all of those arguments. It is plain to us that the document was intended to provide evidence to Mr Cullen that there was in fact a registered first mortgage over property at Blackheath for $25,000.00 of his money. It is an extraordinary proposition to say otherwise. The creation of this document by the practitioner and the sending of it by him to Mr Cullen is clear corroborative evidence, in our view, that the practitioner advised Mr Cullen that of the balance Estate funds the $50,000.00 would be "on first mortgage security". We unhesitatingly reject any proposition to the contrary.

152 But the plain fact is that this $25,000.00 never went to Ms Swan and/or Ms Bezzina. What happened to it? It seems that it went to Anpat Nominees Pty Limited, a company in which the shareholders were Ms Swan and Ms Bezzina, the mother and sister of the practitioner, and a company in which the practitioner and Mr Lowe were the directors and made all the decisions relating to the affairs of this company.

153 The practitioner’s evidence was that $23,000.00 was paid to Anpat in order to put down two deposits on two units in Goulburn Street Sydney, that those purchases never went ahead because "there was a dispute with the home unit vendor and eventually the company just walked away from the assets", the $23,000.00 has never been repaid and Anpat Nominees has ceased to exist, it having been deregistered.

154 As to the balance of $2,000.00 this money was lent to, so it is said, Ms Bezzina under some form of unsecured loan. It also has never been repaid.

155 The books of Anpat were never produced. The practitioner argued that he did not believe that the security issue relating to the $25,000.00 was ever an issue in these proceedings but the plain fact is that it was quite specifically particularised in the Information filed 25 September 1996 as a complaint against the practitioner with respect to, not only the $25,000.00 just discussed but also the other amount of $25,000.00 which was allegedly lent to Ms Padovan.

156 It is crystal clear to this Tribunal that this practitioner used $25,000.00 of Mr Cullen’s funds (part of the balance Estate moneys) for his own purposes in an unsecured way and knowing at all times that Mr Cullen had otherwise no assets, was not a well educated person, had a gambling problem (T425) and, other than the balance Estate moneys, had absolutely nothing.

157 It may have been different if the practitioner had tendered some detailed written advice to Mr Cullen warning him that the proposed loan to Anpat and/or to Ms Bezzina was unsecured and therefore at substantial risk, but there is absolutely no evidence of any proper advice of any nature having been given by the practitioner to Mr Cullen. The practitioner relies on signed documents but in all the circumstances in our view he is unable to so rely because the circumstances are such as to throw more than considerable doubt upon whether those documents were in fact signed by Mr Cullen and, having regard to Mr Cullen’s circumstances known to the practitioner, there is no doubt that proper fearless forthright advice should have been tendered by the practitioner to Mr Cullen, such advice being confirmed in writing, in or to the effect that the proposed loans were extremely unwise, not advised and ought to have been rejected. The plain fact is, however, that the Anpat loan was clearly a loan to an entity under the control of the practitioner for which there was no security, in clear breach of Mr Cullen’s instructions that the loan be "on first mortgage security" (and we make this finding) and, in any event, in clear breach of the practitioner’s undoubted obligations to the client (Mr Cullen).

158 The pleadings allege that the $25,000.00 actually lent to Anpat was in fact lent to Ms Swan and Ms Bezzina. Ms Bezzina has denied that she received $25,000.00 or any part of that sum (including the $2,000.00) and whether or not the loan was made to those persons or to Anpat seems to us, in the circumstances of this case (all matters having been fully ventilated) not to be an issue. The plain fact is that whatever view is taken of the $25,000.00 loan, (whether it be $25,000.00 or $23,000.00 plus $2,000.00) there is no doubt that Ms Bezzina and Ms Swan were "associates" of the practitioner within the meaning of Legal Profession Act Section 60, that fact was not disclosed to Mr Cullen, no independent advice was given to Mr Cullen neither was it recommended that he obtain such independent advice (Legal Profession Regulation 27) and the practitioner permitted the transaction to proceed knowing that no certificate of independent advice had been provided.

159 Finally, on this question, although the pleadings allege the $25,000.00 being lent to Ms Swan and Ms Bezzina and although in the practitioner’s Reply he does not deny that lending, his evidence showed quite clearly that it was never in fact lent to them at all but to Anpat. It is more than extraordinary, the information being peculiarly within the knowledge of the practitioner, that his Reply makes no reference to Anpat at all. On the contrary, the practitioner relied upon an agreement signed by Mr Cullen, allegedly prepared by Mr Lowe "and settled by the solicitor" and at the time of the loan the practitioner "believed he was acting for Mr Lowe in his capacity as a finance broker trading (as) Haval Finance Co". We totally reject that statement.

160 It is now worth pausing to look at the entity "Haval Finance Co". Haval was formally registered on 22 November 1993. In one of his statutory declarations the practitioner indicated that he became a part owner of that entity on that date. He admitted in oral evidence that that statement was not an accurate statement in respect of the equitable ownership in the business. When asked: "When did you in fact become a part owner of Haval Finance" he replied: "It was a matter that developed over a period of time between two friends, one who had a business and one who started to work in it and started to do that sort of work". With respect, that is a quite hopeless response to the question and it seems that the evidence is that it was the practitioner himself who became to regard himself as a part owner of the business, without any sort of formality, within a few months prior to the date of registration of the business. It is plain from his evidence (T485) when he drafted the Swan/Bezzina loan proposal form (or, on his evidence, settled it) he regarded himself as "an equitable owner in a partnership arrangement where the principal at that time was Howard Lowe". He described it as "a very loose arrangement .... a loose partnership arrangement between Howard and myself" and he saw himself as being entitled to a share of the profits of the business and as a co-owner.

161 The practitioner made a strong submission that this Tribunal was not entitled, as a matter of jurisdiction, to examine the Haval Finance activities and, in particular, the loans to Swan, Bezzina and/or Anpat Nominees and Padovan because, it was said, the loans were from Haval Finance Co in which the practitioner was not participating as a legal practitioner, and because it was Mr Cullen who had lent his money through Mr Lowe to Haval and it was Haval which made the loans (not Cullen) and the practitioner was, if at all, acting for Haval and not Cullen. For the reasons set out below we reject that jurisdictional submission.

162 It is also significant to note that Haval Finance Co conducted an office at the same premises as the legal practice operated by the practitioner in that they had a common entrance door and a common entrance foyer, that Mr Lowe was employed part-time as clerk by the practitioner until at least the end of 1993, that he attended to various matters concerned with the legal practice (dealing, for example with Mr Blazevski, Ms Lo and Mr Alan Gower’s Victorian solicitor). The practitioner said that people would know that they were dealing with Mr Lowe because he, the practitioner, was not conducting a mortgage practice. Presumably, in preparing various items of documentation, the practitioner obtained instructions from somebody because it was he who prepared (or at the very least settled) documentation relating to the Cullen advance to Padovan and the Cullen advance to Swan/Bezzina or Anpat Nominees, it was he who prepared the caveat and it was he who lodged the caveat.

163 It seems to us that the practitioner and Mr Lowe cobbled together a scheme intended to deprive Mr Cullen of the balance Estate moneys by interposing the entity Haval Finance Co so that the practitioner would be able to somehow avoid his professional obligations and liability by not tendering appropriate advice to Mr Cullen, pleading that he was "in fact acting for Mr Lowe". However, if all he was doing was acting for Mr Lowe "in his capacity as a finance broker" then in that capacity Mr Lowe himself was not lending any money at all. It was Mr Cullen who was lending the money and the practitioner knew full well that it was Mr Cullen’s money derived from the Estate. In any event, the practitioner was a director of Anpat (having been appointed 28 July 1992), was the company secretary and was at all material times a legal practitioner and had acted for Mr Cullen. In our view he was at all relevant times also acting for Mr Cullen. We have formed the very clear view that Mr Cullen was not aware of the proposal of the practitioner to close his law firm and that "some clients of the law firm were proposed to become clients of Haval". We reject the proposition that somehow or other Mr Lowe "arranged the loan with Cullen through Haval" and that the loan was a "Haval matter as Cullen knows the law practice is closing". In any event, Haval Finance Co was owned by Hughes and Associates Legal Services Pty Limited, a company of which the shareholders and directors were Mr Lowe and the practitioner.

164 The practitioner relied upon a document styled "Haval Finance Co - Loan Proposal for Terry Cullen" as a document which supported the loan to Anpat. That was a quite hopeless argument - this document was in fact a loan proposal in relation to Ms Swan and Ms Bezzina and was generally in the same terms (relevantly) as the Epitome of Mortgage over the Blackheath property. However, on page 2 of this extraordinary document (allegedly signed by Mr Cullen) there is a long paragraph of some 46 lines purporting to deal with the position if Ms Swan and Ms Bezzina do "not proceed with the house construction proposal". This almost uninterrupted paragraph is extremely difficult to understand. Firstly, before one reaches this paragraph, the opening paragraph of this document deals with a recommendation by Howard Lowe "for part of the proceeds of the Estate of Francis Gower subject to the approval of Terry Cullen". It is plain from this opening paragraph that the responsibility for the loan rested on Mr Cullen. This document was tendered as part of the practitioner’s case and it is plain from its terms that the practitioner knew that it was Mr Cullen’s money and that it was Mr Cullen’s decision and responsibility.

165 The document is even more peculiar: it specifies the lender as being "Terry Cullen or such corporation or other body or person nominated to act for the lender by Haval Finance Co". This Tribunal does not understand that description. It is meaningless.

166 The form of security is stated to be "a first mortgage" (which really does put the lie to the practitioner’s protestations that the funds were not to be lent on first mortgage) and the security is described as "a first mortgage if the loan is for housing construction which shall be non-recourse financing (other than the assets required with this finance facility) or a mortgage of shares if the loan is used for the purchase of existing residential property except that in neither case shall any personal liability be incurred by any of the said borrowers". Again, this Tribunal does not understand that phraseology. The security property is similarly described but also refers to a "mortgage of shares" and then there is a peculiar paragraph titled "Election" which reads "The borrower (described as Ms Swan and Ms Bezzina or any corporation of which the said are shareholders) may elect either of the above loan proposals and may change the election to the alternative proposal at any time within six months of the draw-down of the facility without the consent of the Lessor and may role over the facility to the alternate proposal or any other proposal after the said period with the consent of the lender". What on earth does that mean?

167 Then comes the lengthy 46 line almost uninterrupted paragraph. This is described as "Notes" and it is plain as a pikestaff that the practitioner himself, from the very words of this lengthy paragraph, was an active participant in the entire transaction. It refers to the election "to proceed with the purchase of existing residential property" and in that regard it was "proposed that the corporate borrower in which the shareholders are such shall proceed to repay to Colin Hughes any loan the corporate borrower owes Colin Hughes in respect of property owned by the corporate borrower and which shall secure the loan". No plainer words could be constructed to show that the money was ultimately intended to flow through to the practitioner and, at the very least, he had a very real financial interest in the loan transaction. The document went on to acknowledge that the practitioner was a "director of the corporate body" and the corporate body itself (Anpat Nominees Pty Limited) is not referred to until one gets about half way down this convoluted paragraph. The document then purports to note that the practitioner "is related to the shareholders", that the loan facility is arranged through "Haval Finance Co" whose principal is Mr Lowe "and which company shall be joined by Colin Hughes as a principal at a future date". The lender then purports to acknowledge that Mr Lowe introduced him to "Haval Finance Co" and that Mr Lowe "shall be entitled to remuneration for arranging the loan which shall be paid by the borrower". Mr Lowe is described as "a principal of Haval Finance Co, and a director of the proposed corporate borrower Anpat Nominees Pty Limited and an adviser to the shareholders". Even more extraordinarily the document goes on to provide that "the legal documentation for Haval Finance Co shall be arranged by that company for the borrower but not the lender". Then the document states that the lender acknowledges that the practitioner had previously acted for him in relation to Estate Gower and that action "was the last legal matter (the practitioner) would handle for the lender and that he (the lender) was similarly advised by Howard Lowe", that the lender was aware that Hughes and Associates proposes to close down and that the "security documentation shall contain such conditions and provisions as may reasonably be required by Haval Finance Co and the lender appoints Haval Finance Co or its nominee as its agent for all purposes of the security documentation and the enforcement of the security". No wonder. There was no real security offered to Mr Cullen at all - all the cards were held by Mr Lowe and the practitioner. A more extraordinary document one could not imagine.

168 On all of the evidence available to this Tribunal we are unable to accept the proposition that Mr Lowe and the practitioner were, for the purposes of this $25,000.00 transaction, separate and distinct entities. It is plain to us that there was some sort of a scheme hatched up by the practitioner and Mr Lowe to deprive Mr Cullen of most of the balance Estate moneys. There are other problems for the practitioner too: there was said to be in existence a "share security agreement". No such document was produced to the Tribunal although the documentation would unarguably have only have been in the possession of the practitioner.

169 On the evidence adduced by the Law Society and on the evidence of the practitioner in cross-examination we are absolutely satisfied that in relation to the $25,000.00 lent either to Ms Swan and/or Ms Bezzina or to Anpat Nominees and Ms Bezzina, the practitioner acted for Mr Cullen, held his funds in his trust account on his behalf, wilfully failed to follow his instructions to lend those moneys on first mortgage security, preferred the interests of his family members (alternatively, himself) to those of Mr Cullen and wilfully breached Regulation 27. In addition, on the facts we are satisfied (although this was not pleaded) that the practitioner has misappropriated the sum of $25,000.00 because on whatever version one accepts the plain fact is that the practitioner has failed to account for the $25,000.00, providing two mutually inconsistent explanations for the payment unarguably made by him from his trust account and on the question of the practitioner’s credit in relation to this $25,000.00 we can simply say that we do not believe him. The onus on a practitioner is clear: where a payment is made from trust then the practitioner must provide proper evidence that the payment out was properly made. On any view the practitioner has failed to discharge that onus.

170 Finally, in his trust ledger the practitioner has entered up the $25,000.00 as being paid to Anpat Nominees Pty Limited. That statement in itself is in direct contradiction to his Reply (where he says that the moneys were paid to Ms Bezzina and Ms Swan) and is in direct contradiction to his sworn evidence (where he says that $23,000.00 was paid to Anpat and $2,000.00 to Ms Bezzina, although he attempts to explain this by saying that it was Anpat who lent the $2,000.00 to Bezzina in some sort of unsecured way).

171 The last major complaint made against the practitioner is also in relation to a further sum of $25,000.00. It is pleaded that in October 1993 the practitioner advanced $25,000.00 of Mr Cullen’s funds (part of the balance Estate moneys) to Ms Nada Padovan. Firstly, it is interesting to note that both in respect of this complaint and in respect of the complaint relating to the other $25,000.00 the practitioner has conceded that it was he who had advanced both sums of money. This concession was made at the opening of the practitioner’s case (T328 at line 10). Presumably the practitioner knew what he was doing when he made that concession, although that concession was contrary to his Reply where he pleaded that he did not believe he was acting for Mr Cullen on those transactions.

172 Now, in relation to the loan to Padovan the practitioner’s trust account ledger shows that on 13 October 1993 a loan of $20,000.00 was made to Ms Padovan. As part of his case the practitioner tendered a further document titled "Haval Finance Co - Loan Proposal for Terry Cullen". This document purported to be a recommendation again by Mr Lowe, referred to the moneys as being part of the proceeds of the Estate Gower, put the onus and liability upon Mr Cullen and then stated the borrowers to be "Brank Blazevski and Nada Padovan" (Mr Blazevski apparently being the boyfriend of Ms Padovan), the security being two properties and containing provision that the security documentation would be that required by Haval Finance Co who would also be responsible for the enforcement of the security.

173 The practitioner conceded that there was "no documentation to record the relationship between Cullen, Lowe and/or Haval Finance Co" and himself. When asked by Mr Mahon about the apparent discrepancy between his trust ledger (showing a loan of $20,000.00) and the documents purporting to be a loan proposal (showing $25,000.00) the practitioner admitted, firstly that the $25,000.00 loan was still outstanding from Ms Padovan, secondly that he could not really account for the $5,000.00 difference other than it "could have been costs, but there should be an explanation for that. I don’t know what it is" (but from looking at the trust ledger) "I can’t work out the full accounting" (quite a devastating admission) and the practitioner never really attempted to explain the obvious discrepancy.

174 On this point only, the Tribunal is divided. The minority (Mr Mahon) is of the view by re-construction that Ms Padovan received in her hands $20,000.00, counsel was paid $950.00, $4,000.00 was appropriated by the practitioner for costs and $50.00 is unaccounted for. The majority on this point (the Chairman and Mr Staff) is of the view that the evidence is not sufficiently clear to draw that conclusion and that, other than it is plain that the $25,000.00 was Mr Cullen’s money and Ms Padovan acknowledged receipt of it in the documentation, $950.00 was paid to counsel and the trust ledger shows $20,000.00 being paid to Ms Padovan, but precisely where the balance ($4,050.00) ultimately rested can only be a matter of conjecture and the practitioner has failed to properly account for it.

175 In order to "secure" this loan the practitioner firstly prepared Epitome of Mortgage (where there was never any mortgage document at all), secondly lodged a Caveat over one only of the properties the subject of the alleged security in which he describes himself as the caveator, gave his firm as the lodging party, specified that he, the practitioner, claimed "to be entitled to the Estate or interest" specified in the caveat being an unregistered second mortgage dated 14 October 1993 in which the parties were said to be the practitioner (who describes himself as a practitioner) and Ms Padovan, sought to prohibit the recording in the Register of any dealing and then, even more curiously, the Statutory Declaration in support of the caveat was that of Mr Lowe who signed it as "authorised agent of (the) caveator" and had his signature witnessed by the caveator himself the practitioner!

176 The practitioner’s explanation for this is that "it was a matter of expediency for me to prepare the Epitome of Mortgage in this way leaving it to myself to execute all other documents forming the security for the loan and which are annexures to the loan agreement". If that is the case then it is unarguable that he must have been acting for Mr Cullen - how else could the documentation have been prepared and executed by the practitioner on behalf of Mr Cullen? In any event, there are no "annexures to the loan agreement" as tendered by the practitioner.

177 There is no doubt that Ms Padovan received the money and there is no doubt that it has not been repaid. Again, however, the practitioner has endeavoured to separate the activities of Mr Lowe, the activities of Haval and his own activities. For example at p.445 he said "I believed the funds were organised by Lowe as a broker with Haval being involved. The funds went out of my trust account, they were paid to the person that Mr Cullen directed they be paid to". Although this statement was made with regard to the Anpat moneys it could equally have been made with respect to the Padovan moneys.

It is plain that the practitioner was trying to run with the hare and hunt with the hounds. The following exchange is educative:

Chairman: "Were you acting for Mr Cullen in some things and not acting for Mr Cullen in other things?"
A: "I was in a difficult position."

Q: "Are you saying that you were acting for Mr Cullen in some matters but not in other matters?"

A: "That is correct."

Q: "Even though you are running a trust account with Mr Cullen’s money out of which you have made payments on his behalf in relation to $25,000.00?"

A: "On his instructions."

Q: "He must have been your client, surely, how else could he give you instructions if he wasn’t your client?"

A: "After I had finished his litigation, on what basis was I holding his funds if I was no longer his solicitor? The litigation was the last matter I was to run for him."

Q: "Why didn’t you pay the funds back to him?"

A: "I was of the belief that he wanted them invested and he wanted them invested in our new organisation, in our new company in Haval Finance and the finance company was acting in some situations as a principal, borrowing and lending and in some situations as a broker."

Mr Wales: Q: "And all through this, that is through 1993 and 1994, you were running a solicitor’s practice?"

A: "It was very much wound down at that stage..."

Chairman: Q:"You are not seriously telling the Tribunal that at the time this loan was made out of your trust account on behalf of Mr Cullen you were not practising as a solicitor, are you really seriously telling us that?"

A: "Well."

Q: "If you weren’t on what basis were you holding money in trust?"

A: "Since 1992 we planned to close the practice."

Q: "I am not talking about that. I am talking about when the loan was made."

A: "It was in a transitional stage. I completed the last matter that I was dealing with for Cullen and I believed that we were just about to completely get out of law practice, but it was difficult because some of the clients of the law practice were going across to the finance company, so they had to be told, look, we no longer do your mortgage legal work but we do your brokering work. It was not an easy situation".

Q: "I find it very simple, Mr Hughes, with great respect?"

A: "Okay."

Q: "You had a trust account in the name of Hughes and Associates, not in the name of Haval and Co or whatever it was called, Haval Finance Company. It seems to me, prima facie, you were practising as a solicitor at the relevant times when you were conducting that trust account?"

A: "Hughes and Associates was an unregistered business name. I don’t know what the mandatory association between the unregistered business name that used to be the name of the firm of solicitors necessarily have to do with the capacity in which the account is being conducted after the legal firm has ceased and a new form of business has taken over the accounts, in effect, especially when it was done on the client’s instructions."

Q: "That’s your case, is it?"

A: "If Mr Cullen had got the document and said, well, do something else, or gave me some conflicting instructions to what was on the document, I would have, of course, followed my instructions, but Cullen took the document and I assumed that he knew everything. Lowe was an accountant. Lowe spent a year with him. Lowe talked to him all the time. The only time I really talked to him was when I had the record of interview for 2 hours. The whole situation was a bit - a lot of it was bought about by the fact that the fellow had said - looked at the documentation, agreed to it and signed it. So where do I stand?"

Mr Wales: ".... you would understand that if you ceased to practice as a solicitor and there are funds in a trust account you get instructions from the client on what they want to do with those funds in that trust account."

A: "That is correct."

Q: "Now, as at the date when the $25,000.00 was paid out of your trust account to Anpat Nominees, that was 2 December 1993, you were then running a solicitor’s account?"

A: "I was in the transitional phase between businesses."

With respect, that is the most hopeless explanation in relation to the conduct of a solicitor’s trust account. More importantly, however, it is plain that the practitioner was acting for Mr Cullen by the preparation of the Swan/Bezzina Epitome of Mortgage, it was he who signed his trust account cheque in favour of Anpat Nominees, it was he who sent Mr Cullen a copy of the Swan/Bezzina Epitome, it was he who has the Anpat records (T451), the $25,000.00 allegedly paid to Anpat is the same as the $25,000.00 in the Epitome to Swan and Bezzina (T452). It is also clear that at the time of the Anpat loan neither Anpat or Swan or Bezzina had any need for the money. The Practitioner’s explanation was that the loan was "done pursuant to the agreement", ie the agreement "drawn up or worked out between myself, Howard Lowe and Mr Cullen", but that is a quite hopeless argument in the absence of a need by Anpat, Swan or Bezzina for the money. If there was no "need", then why borrow and pay interest? This only serves to underline the conclusion that it was a scheme to milk Mr Cullen of the $25,000.00.

178 During the course of his evidence the practitioner consistently called in aid of his case the documentation, challenged the statement by Ms Bezzina that she had not received the $25,000.00 or any part of that sum, alleged that she was incorrect in that statement, admitted that he had not put on any evidence at all indicating that Ms Bezzina was so incorrect, alleged that he would have attempted to extract from Mr Gillett (a Law Society Trust Account Inspector who investigated this particular aspect) evidence that the statement was incorrect (how this was to be accomplished was not explained), stated that "my cross-examination of Mr Gillett was cut very short. There were a few things that I wanted to ask Mr Gillett and one of them was certainly this agreement" (T459). But when pressed by the Chairman: "I ask you are you suggesting that you were stopped by me or the Tribunal or by Mr Wales or someone else from asking Mr Gillett when he was in the witness box relevant questions pertaining to the cheque butt and the document that appears at page 308" the practitioner answered: "No, I am not suggesting that". It is plain to us that the practitioner’s arguments with respect to Ms Swan and Ms Bezzina are quite hopeless. Neither person was called and there was no practical reason why they could not have been called and no practical reason why Ms Bezzina’s statement, admitted into evidence by consent, could not have been properly challenged in the usual way by calling Ms Bezzina and cross-examining her. Even more extraordinary statement by the practitioner (T462) was to the effect that he was in fact holding the share script that was supposed to have been security. Why was he holding it? Surely the person who holds the security is the lender. And why didn’t he tender it at the hearing?

179 It is plain to us that the Law Society has clearly succeeded in its complaint in respect of the loan to Ms Padovan that the practitioner wilfully failed to follow the instructions of Mr Cullen, his client, to lend the money on first mortgage security.

180 It is plain, therefore, that in relation to the matters of Cullen and in relation to the accounting to Mr Cullen in respect of Estate Gower and in the withdrawal of moneys from his trust account on account of costs and disbursements without instructions and without having rendered any bill permitting him so to do and in failing to discharge the undoubted onus in relation to those alleged professional charges and expenses and having regard to the demonstrable facts the withdrawals form trust account constituted a gross over-charge, the practitioner is guilty of professional misconduct.

181 It is also plain that the trust account ledger maintained by the practitioner for Mr Cullen was kept quite incompetently in that it failed to disclose at all times the true position in relation to money received by the practitioner on behalf of Mr Cullen, neither was it kept in a manner that enabled the accounts to be conveniently and properly audited and neither (elementarily) did it balance. Clearly (although this is not pleaded but was fairly before the Tribunal and fairly ventilated during the course of the hearing) there has been a substantial breach of Legal Profession Act Section 62 in those regards. In addition, there is a clear payment of $843.75 made 9 November 1993, said to be a payment to "Terry Cullen", in fact paid to him but in reality it was intended to satisfy Mr Cullen that the quarterly payment of $843.75 due in relation to the Padovan loan was in fact paid by Padovan in circumstances where it had not - on the contrary, it was paid from Mr Cullen to Mr Cullen!

182 Finally, and perhaps to rub salt into the wound, the practitioner admitted that in 1994 (probably in the latter part of that year) he told Mr Cullen that if he admitted burning the Frank Gower Will "he would not get his money back", that he would have to sue Haval and himself for the rest, that the practitioner would "stop all payments" and when he was sued by Cullen the practitioner would issue a third party notice on Allen Gower. The practitioner said he was not tendering to Mr Cullen legal advice in the latter part of 1994 but the conversation with Mr Cullen was "rather emotional" and the practitioner regarded Mr Cullen as being "in breach of his agreement with me"; "I could have possibly sued him myself" and the practitioner seemed to invent some sort of possible litigation between himself, Cullen and Mr Alan Gower, something about setting aside the Deed of Settlement, something about re-registering Anpat Nominees Pty. Limited and something about suing Dr Podder as well. It all sounded a little like Alice in Wonderland to us.

183 One final observation should be made about the practitioner’s argument that he was not acting for Mr Cullen in the latter part of 1993. There is no doubt that at least from 12 October up to and including 5 November 1993 he was acting as Mr Cullen’s solicitor and in that role he withdrew the moneys from his trust account on account of legal professional charges and expenses. It is difficult, if not impossible, to accept that in October 1993 when the Cullen loan to Padovan was made somehow at that point of time the practitioner was not acting as Cullen’s solicitor and if one accepts (as does this Tribunal) that in relation to the Padovan loan (13 October 1993) he was Cullen’s solicitor then it is almost impossible and stretches the bounds of credulity to say that in relation to the other sum of $25,000.00 part balance of the Estate moneys subsequently lent to Swan, Bezzina and/or Anpat Nominees the practitioner was not acting as Cullen’s solicitor.

184 The practitioner cannot have his cake and eat it too - he cannot remove moneys unarguably owned by Cullen from his trust account and pay himself on account of costs and at the same time say that he is not acting as a solicitor.

185 Furthermore, it was the practitioner who got the Estate Gower moneys into his trust account, it was he who disbursed them from his trust account, it was he who described himself as a solicitor in the Padovan security documents and the lodging party as "Hughes and Associates", his legal firm.

Other matters raised at the hearing:

186 There were a number of other matters raised at the hearing that were not seriously contested (if at all). There were quite a number of technical breaches of the trust account regulations and the trust requirements under the Legal Profession Act. To all intents and purposes the practitioner conceded those breaches but denied they were wilful. In our view that was an impossible denial having regard to the practitioner’s admission that he had an inability to understand the trust account regulations notwithstanding attempts to do so and assistance offered by the Law Society’s inspectors. The practitioner is a gentleman of many years standing (he was admitted 10 February 1978), conducted a mortgage and litigation practice that required the operation of a trust account and it is really not an excuse at all to say that he did not fully understand the regulations because that was part of his qualifications to actually practice law. He also pleaded reliance upon an external accountant "who failed to discharge his duty to the solicitor" (and we reject that as a Defence) and he pleaded a misunderstanding of directions given to him by the Trust Account Inspectors.

187 Trust account inspections took place originally in September 1990 and numerous breaches were identified by the inspector. It is fair to say that the practitioner was given a more than fair warning by the Chief Trust Account Inspector back 1990 but, that notwithstanding, in May 1991 the practitioner had not mended his ways and a further trust account report showed further numerous breaches, some of which dated back to the 1990 report and had not been rectified. A further inspection took place in October 1991 and in December 1991 the practitioner (curiously) told the Society that he had "decided to close down the trust account". However, it was plain that this was not to be the case (why the practitioner said so in the first place is not clear) and further inspections were carried out in October and December 1992 and further breaches were noted including such elementary breaches as no Bank reconciliations or Trial Balances prepared for nine months. In addition amounts had been deposited and no receipts issued and the inspector noted "no improvement had been made in the preparation of the trust records since my last visit".

188 In February 1993 the Law Society Chief Trust Account Inspector wrote that the trust account records "were in a state which demanded (the practitioner’s) immediate attention to ensure that they were bought up to date and balanced as a matter of urgency" and the practitioner’s attention was drawn to Section 62. Subsequent correspondence followed, without any response at all form the practitioner, and on 21 June 1993 a trust inspection was carried out without notice. The state of the practitioner’s practice can be summarised by this conversation between the practitioner and the inspector:

Practitioner:"The books haven’t been written up since the last time you were here".

Inspector: "Where are the books?"

Practitioner:"I think they’re on the seat where you left them last time".

Inspector: "I want to make this clear. You have not made any entries in the books since the last inspection?"

Practitioner:"No".

In addition no 1993 Accountant’s Report had been obtained.

The evidence shows that the trust account of the practitioner was not very large. In February 1993 there were only 9 transactions, during the whole of March 1993 13 transactions and the maximum credit amount from February through to the end of March 1993 was only $36,028.00. Not exactly an insuperable task to bring the accounts up to scratch.

189 By July 1993 the practitioner had failed to renew his Practising Certificate. He told the trust inspector: "I am currently disposing of my legal work and do immigration and mortgage brokering although some matters are of a legal nature, let’s see what I can do. I could dispose of the money in the trust account to the two persons in question and dispose of the legal file." No trust account records had been written up, there were 45 cheque butts that had not been written up from January to June 1993 and the cash book had not been written up and neither had the trust ledger. Other defects were obvious.

190 It was plain, however, that the practitioner was still practising as a solicitor. In evidence he admitted that he continued so to practise until the latter part of 1994. He was warned in July 1993 that in the opinion of the Society "there are sufficient grounds to refuse the renewal of your Practising Certificate". He was requested to rectify the breaches of the Legal Profession Act and the trust regulations. On 13 July the Society informed him that it was contemplating appointing a Receiver or Manager and that its concern was "the integrity of the trust account". An inspection was arranged for 15 July 1993. However, on that day further breaches were noted including "the trust cash book has not been balanced since March 1992" (!), bank reconciliations had not been prepared, ledgers were incomplete and the Trial Balance has not been balanced since May 1992" (!). The practitioner had failed, again, to produce an Accountant’s Report.

191 It is plain from that summary that the practitioner could not be regarded as anything other than incompetent in the way in which he conducted his trust account and wilful in his failure to regularise it. If any supporting evidence is required then one need only to refer to the trust account for Mr Cullen and the way in which that was recorded and managed.

192 On the facts produced by the Society we find proved the charges that the practitioner has wilfully breached Sections 61(1)(b) and 62(1) of the Legal Profession Act, has wilfully breached the provisions of the Legal Profession (Trust Account and Controlled Money) Regulations, that he delayed (and we find that he wilfully delayed) from March 1992 until July 1993 in rectifying some of those breaches and that his trust account records thereafter remained unsatisfactory and that he repeatedly failed to provide the Chief Trust Account Inspector a proper response to issues raised on trust account inspections.

193 The final trust charge against him was that he misled the Society to having written up his trust account records. The practitioner’s response to that charge is that he admits that he told the Society’s officers that his trust books were written up, he alleges that he subsequently told them "it does not balance because the cash book is not completed". However, he told Mr Sofiak, trust inspector, on 21 June 1993 that he "would have the books written up" and that "he could have them written up and delivered .... in a couple of days". Mr Sofiak would be away for a couple of weeks, an appointment was made 5 July 1993 and it is plain from the unchallenged evidence that the books were not written up and that his trust account records were in a hopeless state. It is difficult to reach any other conclusion other than the misleading charge as brought against him is made out and we find accordingly.

Conclusions:

194 The practitioner has been found guilty of professional misconduct in relation to the charges bought against him in connection with the Estate of Cullen (as to all three charges), the Estate of Gower (in relation to the failure to account to Mr Cullen, the withdrawal of funds from trust to office without instructions and without rendering any bill or bills and the withdrawals being a gross over-charge in all the circumstances and the Tribunal has found in the case of Cullen that the $25,000.00 allegedly advanced to Ms Bezzina and/or Ms Swan and/or Anpat Nominees is capable of amounting to a misappropriation of those trust funds and, although not pleaded as such, the material in support of that conclusion was all fairly before the parties and the Tribunal, was fully ventilated and in those circumstances a finding is made accordingly.

195 There are also findings against the practitioner with respect to the trust account charges and the Tribunal has reached the very clear conclusion, even if we are wrong about the finding of misappropriation, the practitioner embarked upon a scheme to utilize the funds of Mr Cullen for the purposes of the practitioner in circumstances where he was not so entitled. Although we are of the very clear view that $25,000.00 was misappropriated, at the very least those funds were paid over to a corporation in which the practitioner was a director and secretary for the purposes of the corporation, not for the benefit of Mr Cullen, in circumstances where the practitioner was acting for Mr Cullen as his practitioner at the relevant time and that at all material times and in circumstances where the practitioner, perhaps in concert with Mr Lowe, embarked upon a scheme to deprive Mr Cullen of most of the balance of Estate moneys and to lead him into thinking that the moneys would be advanced on first mortgage when at all times they were totally unsecured and where on one occasion Mr Cullen’s money was used to pay Mr Cullen a quarterly mortgage instalment, and having regard to all of those circumstances the practitioner’s conduct was nothing short of disgraceful and dishonourable.

196 In our view there can be only one result of those findings in all the circumstances, that being that the practitioner’s name must be removed from the Roll of legal practitioners in this State.

197 Perhaps we should make this observation also: whatever way one looks at the conduct of the practitioner he seems never to have understood the obligations that he undoubtedly owed to each of his respective clients, obligations of fairness, obligations of fearless advice in their interests, obligations of proper disclosure and obligations not to become involved in undoubted conflicts of interest. There were massive conflicts all the way through the dealings of this practitioner. At one stage he acts for Mr Padovan, on another he acts for Ms Padovan who pays $16,000.00 for some sort of insurance claim and ends up with only $8,000.00. In the case of Mr Cullen, he ends up receiving something like $10,000.00 in a transaction were the practitioner received about $28,000.00 and his family company received about $25,000.00. As Mr Wales so eloquently pointed out in his final summation: "it is rare to think of a case which has come before the Tribunal in which the one person has acted for so many inconsistent interest and worn so many hats at the same time". It may well be, on a more charitable view, that the practitioner "simply got tangled up with all these people, all of whom were very unreliable, and he allowed his emotions to get the better of him... failing to focus on his duties as a solicitor" (T558) but even if that view be adopted as the more charitable view of the practitioner’s motivation again to use the words of Mr Wales: "it demonstrates such a complete ignorance of a partitioner’s obligations towards his clients, it demonstrates, for that reason alone, unfitness to practice". With respect, we agree.

Subsequent Applications:

198 After the evidence had closed and final submissions made there was one application made by the Law Society and three applications made by the practitioner. It is convenient to deal with those now:

1. Law Society application 18 December 1998.

199 This application was filed by the Society 20 August 1998 and it pertains to the matter of Cullen, No 36 of 1996 filed 25 September 1996. It will be remembered that in this matter there were three grounds of complaint arising out of activities of the practitioner in October and December 1993. The first ground was that he wilfully failed to follow Mr Cullen’s instructions to invest part of the balance Estate moneys in first mortgage security. That was part of Mr Cullen’s original complaint to the Law Society and we understand there are no legal jurisdictional difficulties with respect to that aspect of the complaint. The problem arises, as we understand it, with the next two complaints to the effect that the practitioner preferred the interests of his family members (his mother and sister and/or Anpat Nominees) to those of Mr Cullen, his client and that the practitioner wilfully breached Regulation 27 which prohibits a solicitor from borrowing money, or permitting an associate of the solicitor to borrow money, from a client of the solicitor unless certain procedures and prerequisites are followed. It was conceded that the mother and sister of the practitioner were associates for purposes of the Regulation and it is also plain that the Regulation was not complied with.

200 The legal jurisdictional question arises because the second and third complaints are complaints preferred by the Law Society arising out of its investigation/appreciation of Mr Cullen’s complaint to it. This is understandable because a member of the public is not necessarily familiar with the rules and ethical restrictions on members of the legal profession.

201 It has always been (as far as we are aware) the position of this Tribunal that it can, so to speak, deal with matters "on the run" that arise in the course of a hearing provided that no party is prejudiced and all matters are properly ventilated. In this regard reference can be made to Cofini (1997) 1 LPDR 1 at 3 where that Tribunal said:

"It is not uncommon, in the course of hearings before this Tribunal, for additional matters to arise that may amount to professional misconduct or unsatisfactory professional conduct, when those matters have not been pleaded. Although it is adequately clear that allegations of professional misconduct and unsatisfactory professional conduct must be pleaded and particularised, it would not be appropriate for this Tribunal to close its eyes to conduct which fell within the statutory or common law definitions where that conduct is, not only squarely before the Tribunal but also where the conduct is squarely before the practitioner and dealt with in considerable detail, without ambush, before the Tribunal".

Similar observations were made in Saville (1997) 1 LPDR 21 at 27. In the course of argument in the matter now the subject of this judgment this observation was made by the Chairman:

"If it transpires during the course of a hearing that a solicitor misappropriated a sum of money, well (we) wouldn’t stop the whole hearing and go away and file a separate complaint, provided that it was fairly dealt with during the course of the hearing".
202 In the recent matter of Barwick (now the subject of a grant of special leave to appeal to the High Court of Australia (No S105 of 1998) the Court of Appeal said:

"The allegations of misconduct which based the Information cannot extend beyond those the subject of the complaint. However, the Tribunal may vary an Information, pursuant to Section 167A on the application of counsel ..... so as to admit allegations or to include additional allegations if the Tribunal is satisfied that it is reasonable to do so having regard to whether varying the Information will affect the fairness of the proceedings".

What the Court of Appeal seemed to be saying is that the power of amendment is not limited to matters which arise "on the run" but also, upon the application of the Law Society or the Bar Association, the Information may be varied (amended) to include additional allegations including allegations of conduct during the investigations or the hearing before the Tribunal. What happened in Barwick is that an application was made to that constituted Tribunal to stay, as an abuse of process, part of an Amended Information by the Law Society 24 July 1997 the filing of which had been pursuant to leave granted by the Tribunal under Section 167A. There were two grounds advanced by the practitioner in support of that stay application:

(a) there was no investigation by the Law Society as required by Section 148

(b) that Section 138(1) (which provides that "a complaint may only be made within three years after the conduct is alleged to have occurred") applied so as to bar such of the amended Information as referred to conduct of Mr Barwick prior to 17 July 1994, being a date three years prior to the Council resolutions to amend the Information.
The Society submitted that Section 138(1) did not apply as the application to file the amended Information was made pursuant to Section 167A, and that section was a complete answer to the submission. That constituted Tribunal initially ruled that Section 138(1) applied but on the following day, upon an application by the Law Society to set aside that ruling, the Tribunal acceded thereto and the previous ruling was set aside and the stay application dismissed. The reasoning was the interrelationship between Sections 134 and 138. Section 134(1) provides that "any person may make a complaint to the Commissioner (of Legal Services) about the conduct of a legal practitioner". Section 135(1) provides that "a Council may initiate a complaint against any legal practitioner under this Part". And Section 138(1) gives similar power to the Commissioner. The Barwick Tribunal sought solace in the different wording used in Section 134(1) that "any person may make a complaint " and the words in Section 135(1) and 136(1) to the effect that the Council or the Commissioner, as the case may be, "may initiate a complaint " . The view of the Barwick Tribunal was that in view of this interrelation the provisions of Section 167A applied and the amended Information could be dealt with.

203 Mr Barwick appealed to the Court of Appeal. That Court delivered judgment (CA 40781/97) on 28 July 1998. It upheld the decision of the Tribunal to the effect that the proper construction of the Legal Profession Act is that the time limitation in Section 138 does not apply to complaints initiated by a Council or by the Commissioner and therefore Section 167A applies in those circumstances. In other words, the time limitation is placed upon members of the public making complaints, not the relevant professional Councils and the Commissioner of Legal Services in carrying out their public roles.

204 The Court of Appeal further held that an Information is defective if it was laid before the relevant professional Council had investigated the complaint pursuant to Section 148(1) and completed that investigation within the meaning of Section 155(1) and should, unless the claimant practitioner waives the defect, be struck out.

205 In the Court of Appeal the primary judgment was that of Sheller JA and the relevant portions pertaining to investigation commence at page 20. The Court found that until the investigation was completed the Council cannot institute proceedings in the Tribunal. This is because the proceedings can only be instituted if the Council (or the Commissioner) "is satisfied there is a reasonable likelihood that the legal practitioner will be found guilty by the Tribunal of professional misconduct, and the complaint dismissed if it is satisfied that there is no such likelihood" (page 21). Section 155 gives the legal practitioner "important protection after the investigation has been completed .... but this protection would be undermined to a significant degree if, before the investigation were completed, proceedings were instituted in the Tribunal with respect to the complaint". The legal practitioner "is entitled to have an investigation and have it completed before proceedings are instituted in the Tribunal, but that investigation can be begun and can be completed before any complaint is initiated" (page 24). Importantly, however, Sheller JA said this (at 27):

"I do not think this Court on this application should investigate whether or not the Information was laid before the investigation of the complaint was complete or whether or not the allegations of conduct on which the Information was based extended beyond the allegations of conduct in the complaint or added pursuant to a variation under Section 167A".

By this the Court seemed to leave open whether it should investigate whether or not an investigation of the complaint was complete prior to the Information being filed.

206 As we have observed above, Mr Barwick has applied to the High Court and leave to appeal has been granted. However, in relation to the matter now before us we do not have any particular difficulty in dealing with the application by the Law Society. In our respectful view, if leave is required then it is granted. However, in our view, leave is not required simply because the complaint by Mr Cullen, albeit in lay form, contains the seeds of the other complaints formulated by the Law Society which arise out of its appreciation of the lay complaint put into a legal format. It would be no different from a person complaining to the police about an incident and the police turning that lay complaint into a series of legal charges. We refer later to the argument based on the necessity for prior investigation and report.

2. Application by the Practitioner 18 December 1998.

207 This application was filed by the practitioner 10 December 1998 and was heard at the same time as the Law Society’s application referred to above. The practitioner sought orders that all the complaints against him be struck out with indemnity costs in his favour upon the ground that the Law Society had failed to comply with the mandatory provisions of the Legal Profession Act. These "mandatory provisions" were not particularised in the formal application itself but were fleshed out by the practitioner in oral submissions. In support of his application the practitioner issued a subpoena addressed to the Law Society to produce the documents evidencing its investigation and upon which the Society relied to file the three Informations now before us. The Society declined. In argument the practitioner conceded that it was only the matters of Cullen and Padovan that could fall within his strike-out application. The summons to produce (commonly called a subpoena) sought a copy of the record of the investigation and a copy of the record and reasons for decision. The practitioner submitted that the provisions requiring the Council to investigate (Division 5) and the keeping of a record of the decision with respect to a complaint, together with the reasons of the decision (Section 156) are mandatory provisions of the Act, should have been complied with by the Law Society before it started the proceedings and a practitioner is entitled to look at the full background to investigate whether in fact there has been proper compliance with those mandatory provisions. It was said that if a practitioner could not have access to those documents then not only has the law not been complied with but the Tribunal would not be able to be reasonably satisfied that the prerequisites had in fact been carried out. And, if there had not been compliance, then "there would be very serious consequences in respect of the whole legality of the Information".

208 Putting it a slightly different way, the practitioner submitted that not only was he entitled to see the primary evidence that indicated compliance with Sections 148(1), 155(1) and 156, but the Society must, upon challenge, satisfy the Tribunal that it has in fact complied with those Sections and if the Tribunal can’t be so satisfied then the Society (or the Commissioner) cannot bring proceedings in this Tribunal against the practitioner. In other words, where there is a challenge the Society has to prove that its Council has complied with those Sections. The submission was made that there was a prerequisite of fairness and that absent production to the Tribunal of the records of the investigation and the record of the decision and the reasons for the decision, then the Information itself is not properly based.

209 It seems to us that there is an essential difficulty about that. The difficulty can be formulated in this fashion: What happens if the Society produces its records and it is found that they are defective? Is it a prerequisite for the commencement and maintenance of proceedings in this Tribunal that there should be a nit picking analysis of the Society’s records of the investigation with a view to finding faults in that investigation or faults in the record or faults in the report, then analysing those faults and then determining whether or not those faults are sufficiently serious to warrant the Information being struck or partially struck out depending upon the analysis of the faults?

210 It seems to us the argument of the practitioner to the effect that the procedures set out in Division 5 are substantive is not a valid argument. In our view those requirements are procedural only. They are directed to the Councils and the Commissioner and were never intended to form the basis of some sort of pre-discovery with a view to analysing whether those authorities had in fact investigated the complaint, had completed their investigation, prepared a report and kept a copy of the report. The retention of the report by the Commissioner is a matter of record simply because nothing flows from the failure of the Commissioner to keep a record and reasons under Section 156. With regard to the activities of the relevant professional Council its activities may be reviewed under Section 158 ff, Division 6, but that is as far as it goes. And although the Court of Appeal has held that an Information is defective if it was laid before the conduct of the investigation was completed within the meaning of Section 155(1) and should, unless the practitioner waives the defect, be struck out, that in itself in our respectful view does not place a requirement upon this Tribunal to carry out some sort of either cursory or very detailed preliminary investigation on whether in fact there has been an investigation prior to the laying of the complaint. Even if there had been an investigation, what sort of investigation is required under the Act? Does the decision of the Court of Appeal require an analysis of the investigation and what happens if the Tribunal, after that analysis, determines that the investigation was not sufficient?

211 The practitioner submitted that the Society could not simply take a complaint, wrap it in the guise of a statutory declaration and simply file that. He submitted that the Society had an obligation to, in the matter of Lo for example, make enquiries from the engineer who produced the reports, check the body corporate records or do something to verify the state of the building before running with the Lo complaint and in the case of Juntunen an enquiry should have been made to find out about the alleged lost documents, and so on. It was further suggested that the Society had an obligation to call Ms Bezzina and require her to be present for cross-examination (although there was not the slightest evidence that the practitioner had asked her to be present for cross-examination), that the Society failed to answer the practitioner’s request for particulars so that "in that situation it was impossible to work out what Mr Cullen had told the Law Society I had or had not done in respect of the bill" and the "Law Society had a statutory duty to investigate the question of what was done for Mr Cullen (and) it did nothing". And, furthermore, so the argument went, in relation to the third filed Information about the computer, the Society should have investigated that matter, made an assessment of what the computer expert’s evidence was to be, talked to Mr Cullen and if that had been done properly then the third filed Information would not have been filed at all.

212 More importantly, the practitioner urged upon us that the Society should at the very least have interviewed Mr Lowe who, it was said, was the person who was dealing with Mr Cullen in the same way as he was the person who was dealing with the financial matters for the Padovans. It was said from the bar table that Mr Lowe was, in effect, the (sole) shareholder in Anpat Nominees, that he didn’t issue the shares to Ms Swan and Ms Bezzina, that he kept them himself and that it was he through Anpat who granted an option to Mr Cullen on one of the home units apparently the subject of some aborted purchase.

213 There is no need to deal with all of those arguments other than to say that the request for particulars was in fact dealt with on an interlocutory basis and, as we understand it, the Society provided by way of particulars the information that was available to it. Secondly, we accept the submission from Mr Wales that the third filed Information relating to the computer was filed at such a late stage primarily because of the failure of the practitioner to comply with numerous interlocutory orders to produce the computer at a much earlier date. Thirdly, there was no obligation on the Society to call Ms Bezzina - she had made a statement which was admitted into evidence without objection and she was not called for cross-examination.

214 In summary, it seems to us that the statutory obligation to investigate, to keep a report and the reasons for the decision, are statutory obligations imposed upon the relevant professional Council and upon the Commissioner, they are procedural obligations, not substantive, and there must be a presumption that the statutory organs charged with the complaints administration provisions of the Legal Profession Act will carry out their statutory obligations in accordance with the provisions of that Act in the absence of any evidence to the contrary. We do not take the decision of the Court of Appeal in Barwick to impose upon this Tribunal the most extraordinarily onerous obligation to examine, upon the request of a practitioner the subject of proceedings, the question of whether there has been compliance with the Act and if there has been an attempt at compliance whether that attempt is satisfactory in all the circumstances sufficient to properly found a filed Information.

3. Practitioner’s Application filed 2 February 1999.

215 In this application the practitioner sought orders that the Information filed 25 September 1996 (with respect to Cullen and Gower) should be struck out and sought a further order that the Information filed 20 February 1998 be also struck out and sought other orders which we shall deal with below.

216 The first aspect of this application was that in relation to the matter of Cullen and the charge that the practitioner failed to follow his instructions, the practitioner relied on the admission by Mr Cullen that he did not tell the practitioner that he was dyslexic or illiterate. The practitioner sought to quote certain authorities on the actions of people who were dyslexic and stated "it is now known that (Mr Cullen’s) consent (presumably referring to the alleged Fee Agreement and perhaps also referring to the alleged signatures on loan proposals each for $25,000.00) was a result of his medical condition and may not have been actual consent" because Mr Cullen did not tell the practitioner that he was illiterate and was deceitful and concealed his condition from the practitioner. Quite frankly, that is not a ground for striking out the Information or even part of the Information. On the contrary, it is simply a matter for argument on whether one should look at Mr Cullen in one light or the other. But as we have stated above, it is not Mr Cullen we are looking at, rather it is the conduct of the practitioner that is at issue and it is his conduct that needs to be looked at because it is his conduct that is brought before us and said to amount to professional misconduct. We have dealt with that in detail above.

217 The second ground of this application sought to strike out that portion of the 25 September 1996 Information charging that the practitioner preferred the interests of his family members to those of his client. It was said that the Society confused the word "allot" and the word "issue" as used in company law and "formed the view" that the practitioner’s family members were company members of the corporate borrower (Anpat Nominees) from Mr Cullen. It was also stated (quite wrongly and indeed indicates some sort of a mindset in the practitioner), that Mr Cullen admitted burning the late Frank Gower’s Will. That view is clearly rejected because there was not the slightest persuasive admissible evidence (even if the issue was thought to be relevant to the proceedings in this Tribunal) that would go towards supporting that submission. This Tribunal deals in admissible evidence, not suspicion or conjecture. It was then again submitted that Mr Lowe remained the sole shareholder in Anpat, took a lien on the funds of Mr Cullen for his (Mr Lowe’s) unpaid fees as financial adviser and accountant for Mr Cullen and also put his funds into a home unit for Mr Cullen for which Mr Cullen had agreed to complete the purchase at the expiration of twelve months. Again, we are of the respectful view that there is not the slightest admissible evidence that would support that submission. It was submitted, again, that the Law Society had failed to interview Mr Lowe before it had commenced proceedings and, presumably, if it had interviewed him the allegations would not have been made. We have dealt with that above and that aspect is also dismissed.

218 The third portion of the Application related to the charge of gross overcharging. It was said that an itemised bill was not filed because Mr Cullen accepted a lump sum bill and signified his consent by signing the Fee Agreement. Therefore, the lump sum bill was approved by Mr Cullen. We have dealt with this above in some detail and we reject this submission. A further allegation was made, an allegation to which we make no reference in this published judgment simply because it is offensive, defamatory and an abuse of the procedures of this Tribunal. Suffice it to say that there is a reference to an alleged sensitive allegation and we make no further comment about it.

219 The practitioner then suggested that he would prepare an itemised bill in taxable form dealing with the obtaining of the Letters of Administration, the preparation for contested Family Provision litigation, the obtaining of a home unit and the finance therefor and the obtaining for Mr Cullen a share in a gay licensed premises in Kings Cross "with immense profit potential" and "with an asset value four times (the) purchase price". It was then said, again, that because the Society had failed to comply with Section 148(1) "there is no requirement to file an account and the matter is subject to statute bar limitation".

220 We reject all of those submissions. We reject them partly for the reasons specified above in the body of our judgment and partly for the reason that the allegations are outside of the evidence and submissions were made and concluded on that evidence. It is not a question of a "statute bar limitation", rather it is a question of the practitioner’s conduct and the discharge of his undoubted duties to his client and the satisfaction of the onus of proof which undoubtedly resided in the practitioner having regard to, not only the state of the alleged Fee Agreement (which we have held to not be a proper fee agreement anyway) but also to the extraordinary withdrawals from Mr Cullen’s trust moneys in the practitioner’s trust account for the benefit of the practitioner without any bills being rendered, in peculiar amounts on specified days and prima facie without any authority from the client, without any bill having been rendered and without any justification in an evidentiary sense put before us by the practitioner.

221 On this point the practitioner sought to put into evidence (as annexure "C" to his affidavit 2 February 1999) which he described as "an itemised account" and he stated that "a bill in taxable form is now being prepared for the Supreme Court". Even if this document was allowed into evidence at that late stage it is clearly not "an itemised account". For example an amount of $5,000.00 was claimed for Estate administration "not less than (at scale plus disbursements of approximately $2,000.00) (file to be produced)". And, as a further example, there are long paragraphs pertaining to the alleged restaurant/bar purchase, the proposed Estate Gower litigation and the proposed restaurant/bar purchase by Cullen, all wrapped up in the final phrase: "Fees, say $20,000.00 as per agreement of client but say $10,000.00". It is beside the point to observe that none of this was led at the hearing although the practitioner had more than adequate opportunity to so do and to produce to the Tribunal his alleged file, notes, correspondence, and so on.

222 Fourthly, the practitioner sought an order to strike out the Information 20 February 1998 (the allegations relating to misleading the Tribunal about the computer) on the basis that "the Law Society admits its forensic evidence is inconclusive" and that Mr Cullen "in evidence agrees with the solicitor against the allegation of the Law Society". In neither case are those grounds (if that is the proper appellation) sufficient to strike out the Information. They are peculiarly matters of evidence and this Tribunal has dealt with that evidence above and held in favour of the practitioner.

223 The practitioner also sought to strike out an order allegedly made 18 December 1998 and he sought an order prohibiting the publication of the matters the subject of these proceedings. Firstly, no order in relation to publication was made 18 December 1998. Secondly, there is no reason advanced to us whereby this Tribunal should prohibit the publication of this matter. We decline to make any such order.

224 Finally, the practitioner sought to strike out the whole of the hearing conducted up to the 2 February 1999 on the various bases raised by him because, it was said, the hearing was "effected" by them. This is clearly a nonsense and that application is also dismissed. Similarly the application for indemnity costs is dismissed, such order being sought on the basis that the Society is in breach of Section 148B(1).

225 The practitioner submitted, in effect, that the whole of the proceedings before this Tribunal "have been a nullity, they are nugatory, they are void". In support of this application the practitioner filed an affidavit which sought to put before the Tribunal material that was either already in evidence or sought to vary or put a different hue on the evidence. For example, paragraph 4 alleged that the promoters and the subscribers to the two ordinary fully paid shares issued in Anpat were Mr Lowe and himself, who were also the first directors of the company, although it was plain from the material put before the Tribunal by company search that the shareholders were Ms Swan and Ms Bezzina. The practitioner sought also to say that "the intended purpose of the company was to act as a trustee of a family discretionary trust for the family members. As a consequence of this intended purpose the subscriber’s share of myself was sold and transferred to Lowe". The plain fact of the matter, however, is that the material that was new (in that it had not been raised at the hearing) and was material which could have reasonably been made available at the time of the hearing. It was material that was peculiarly within the knowledge of the practitioner and he clearly, as an experienced practitioner representing himself, made the decision not to lead that material but to conduct his case relying on the evidence then put before the Tribunal.

226 As we understand the law where there has been a change in factual material or the Court or tribunal has been deliberately or inadvertently misled then in those circumstances there is an obligation to go back to the Court or tribunal, tell the Court or tribunal that the factual matrix upon which the Court or tribunal was asked to adjudicate has in fact changed for one reason or another and then bring forward the proper facts for determination. If authority is required for this proposition then one needs only to look at Vernon v Bosley (No 2) (1997) AER 614, a decision of the English Court of Appeal 13.12.96 which in those circumstances imposed an obligation on the legal practitioners and the parties, as a continuing duty until judgment was given, not to mislead the Court or other litigants in the case in circumstances where the appellant knew that the evidence given at the hearing did not represent the true position and there was a risk that judgment would be given on a basis that was no longer true, there was a danger that the Court would thereby be misled and it was the duty of counsel to advise his client that disclosure should be made and if the client refused then it was not as a rule for counsel to make the disclosure himself but he could no longer continue to act. The law, however, does not, unless in the most peculiar rare circumstances, permit a case to be re-opened on evidence that was available to the parties and the parties elected not to put that material before the Court.

227 The evidence in this matter took nine days of hearing with a very, very long gestation period and it could not be said in the wildest imagination that the practitioner did not have more than adequate opportunity, and was not given more than adequate opportunity, to put every conceivable piece of evidence (that was admissible) and every conceivable argument to this Tribunal. For a discussion on this point see the decision of this Tribunal in the matter of Symonds (1995) 2 LPDR 10 at 17 where that Tribunal formed the view that it is a prerequisite for a grant of leave to adduce further evidence that the evidence must be of sufficient cogency or force to meet the requirement of the interests of justice, and that Tribunal agreed with the observations of Santow J in Wentworth v Wentworth that the discretion to allow additional evidence would only be exercised in the most exceptional circumstances and only if the public interests in the finality of litigation was overridden in all the circumstances. The fundamental principle was whether the interests of justice are best served by allowing or rejecting the application to re-open. In our view, and applying those principles, the application by the practitioner to file additional factual material and rely upon in agitating his arguments must be rejected.

228 Finally, by way of completion on the Section 148(1), 155(1) and 156 arguments advanced again, the practitioner relied upon Project Blue Sky Inc. v Australian Broadcasting Authority (1998) 153 ALR 490 where the High Court examined whether the Authority was in breach of Section 160 of the Broadcasting Services Act 1992 in failing to have regard to a certain international Agreement and Protocol in formulating an Australian content standard. The High Court said that the primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals. The fact that Section 160 regulates the exercise of functions already conferred on the respondent Authority rather than imposes essential preliminaries on the exercise of its functions strongly indicates that it was not a purpose of the Act that a breach of Section 160 was intended to invalidate any act done in breach of that Section. The traditional test for determining whether the exercise of a statutory power was valid by determining whether the legislative provision in question was mandatory or directory should not be used as it may focus attention on the wrong factors. Instead, a better test for determining the validity of the exercise of a statutory power is to ask whether it was a purpose of the legislation that an act done in breach of the provision should be invalid. At page 518 (97) the majority of the Court said, "Courts have always accepted that it is unlikely that it was a purpose of the legislation that an act done in breach of a statutory provision should be invalid if public inconvenience would be a result of the invalidity of the act. Having regard to the obligations imposed on the (Authority) by Section 160, the likelihood of that body breaching its obligations under Section 160 is far from fanciful, and, if acts done in breach of Section 160 are invalid, it is likely to result in much inconvenience to those members of the public who acted in reliance on the conduct of the (Authority)". And further down that page, at paragraph 95, "Because that is so, the best interpretation of Section 160 is that, while it imposes a legal duty on the (Authority), an act done in breach of its provisions is not invalid".

229 With respect, we rather think that is the proper interpretation to place on the various sections of the Legal Profession Act that require investigations, reports and records. And no doubt this will all be clarified when the matter of Barwick is ultimately determined by the High Court on appeal but at the present that is our respectful opinion.

230 The practitioner further submitted that the Deed of Settlement between Mr Allan Gower and Mr Cullen had never in fact been exchanged (because there was no evidence that Mr Cullen had signed the Deed) so there was "no binding legal position" between them. Of course, if there was no agreement, then how could the practitioner have made the payments out of his trust account unless pursuant to some sort of agreement, whether or not the actual Deed had been signed by both parties? The practitioner admitted (T 25 5 March 1999) that he had the instructions of both Mr Cullen and Mr Gower. This must, therefore, be evidence of an agreement but, with respect, the primary submission seems to us to be quite irrelevant and confuses any anticipated application by Mr Cullen for compensation with the primary role of this Tribunal to deal with matters of professional misconduct. Compensation applications may result in different principles applying but none of that has anything to do with professional conduct.

4. Practitioner’s Application filed 7 April 1999.

231 This Application was heard on 10 May 1999. It is probably the most bizarre Application of all the Applications made post hearing.

232 In its terms the Application was in two parts.

233 The first part alleged that the Law Society "withheld and deliberately concealed evidence being a complaint to the Office of the Legal Services Commissioner by the solicitors for Allan Gower during the period that the information had a direct and crucial bearing on the matter of Cullen and the Estate of Gower and thereby misled the Tribunal and thereby allowed the Tribunal to fall into error". As part of that Application the practitioner annexed the document styled "Submissions" and as part of that document he annexed a letter to him from the Law Society 9 December 1998, a letter from the Victorian solicitors for Mr Allan Gower to the Legal Services Commissioner 26 February 1998, a copy of the statutory declaration of Mr Gower 14 August 1996 and a portion of the transcript. Other writings and articles were also annexed.

234 The Application in this respect was totally without foundation. The practitioner alleged that he did not recall the Gower declaration being before the Tribunal, "I didn’t know about it, with respect". It was plain, however, that it was in fact exhibit "B" before the Tribunal on 3 June 1997 and formed part of exhibit "Q" at the hearing on the merits. In addition, the practitioner cross-examined Mr Gower at the hearing 3 June 1997 and he also cross-examined Mr Gower at the hearing on the merits.

235 The practitioner alleged that perhaps (and this is putting it generously) he overlooked paragraph 4 of that declaration. So it was plain, glaringly plain, that the declaration had not been concealed from him nor concealed from the Tribunal.

236 The best argument that the practitioner could advance was that the actual letter of complaint to the Legal Services Commissioner was withheld from this Tribunal. But, so what? The practitioner agitated that there was "no explanation, no adequate explanation, as to why this document has sat around the Law Society’s office. It was handled expeditiously by the office of the Legal Services Commissioner and that it sat around the Law Society’s office for nine months without an adequate explanation, to me, smacked of some concealment. That’s as far as I could put that aspect". That is a quite hopeless argument because a letter of complaint without supporting sworn material would, absent consent, be not admissible as to the facts contained therein and in any event it contains nothing more than was already in evidence at the hearing.

237 The second part of this Application was to the effect that because a subpoena had been issued out of the Supreme Court in the matter of "Marsden v Channel 7" (sic) for the Tribunal’s files, because Mr Marsden was a former Law Society President and two members of this constituted Tribunal are solicitors and members of the Law Society, those two solicitor members should disqualify themselves. The practitioner did not allege any actual bias but the appearance of bias. We unhesitatingly reject that submission. It seems to us absolutely irrelevant that a subpoena was issued in Mr Marsden’s matter or anybody else’s matter. There was nothing advanced by the practitioner which would have supported his submission and that part of his Application is dismissed.

238 Finally, the document styled "Submissions" contained further additional submissions outside of the formal Application, submissions pertaining to allegations of concealed evidence, various allegations of homosexual relationships and paedophilia, allegations of trusts and frauds and the practitioner agitated his arguments with regard to the Law Society having a statutory duty to investigate, alleged that Mr Lowe was the trustee of the practitioner’s family trust, alleged the Tribunal had already made a decision on a number of matters prior to its decision being handed down, that Mr Allan Gower was "packed off to Melbourne very quickly so he could not say too much", and so on. Almost all of these allegations, including allegations of paedophilia and "an association of paedophiles" were not before the Tribunal as proven facts, were not led by the practitioner at the hearing on the merits and in any event seemed to be totally irrelevant and in any event were plainly offensive and scandalous. The Tribunal made a suppression order under Section 171B. The Tribunal proposes to renew that suppression order as part of the final orders in this matter.

239 The most charitable view that one may have about the three post-hearing Applications of the practitioner is that he has become so enmeshed in the alleged socio-sexual milieu in which various of his clients apparently operated that he has become blinded to his obvious professional duties to them and to this Tribunal.

240 In short, all three post-hearing Applications made by the practitioner are dismissed. Allegations made against persons by way of submission when not raised and tested in evidence are to be deplored, are scandalous and, when repeated so often (as in this case) indicate to us a further ground for concluding that this practitioner is unfit to practise.

COSTS

241 There have been various applications and cross-applications for costs during the course of all three matters. In the practitioner’s favour there is no doubt that he has succeeded in relation to the whole of Matter No 36 of 1994 and the whole of Matter No 6 of 1998 and to one portion of Matter No 36 of 1996. Normally that would not entitle the Law Society to an order for costs in relation to those issues unless the practitioner’s conduct that gave rise to the matters was such that the bringing of proceedings in this Tribunal was justified. In other words, it does not necessarily follow that because a practitioner succeeds or the Law Society fails in the discharge of its undoubted onus, an order for costs ought not to be made in favour of the Law Society in respect of those matters.

242 However, as we observed at the very beginning of this judgment, had the practitioner obtained proper legal representation we have absolutely no doubt that these proceedings would have been substantially shortened, there would have been vastly less preliminary skirmishes, there would not have been two preliminary ex-parte hearings and there certainly would not have been three post-hearing Applications.

243 Consequently, we have formed the very clear view that the practitioner should pay the costs of the Law Society of the whole of the proceedings but excluding those costs referrable to those portions of the hearing on the merits in March and June 1998 referrable to the matters of Podder, Lo, Juntunen, Padovan and the matters pertaining to the computer complaint in No 6 of 1998.

244 Finally, all applications made by the practitioner for costs are dismissed. None of them satisfy the criteria set out in Symonds (1995 LPDR 10 at 12ff) and the practitioner did not argue that they did.

Last Updated: 07/09/1999