Law Society of New South Wales v Hurley

[1999] NSWADT 140

CITATION:	Law Society of New South Wales -v- Hurley [1999] NSWADT 140
DIVISION:	Legal Services
APPLICANT:	Council of Law Society of New South Wales
RESPONDENT:	Brett William Hurley
FILE NUMBER:	9834
HEARING DATES:	11/09/1999
SUBMISSIONS CLOSED:	11/09/1999
DATE OF DECISION:	23 December 1999
BEFORE:	R Turner Presiding Judicial Member H Reed - Judicial Member P O'Grady - Member
PRIMARY LEGISLATION:	Legal Profession Act 1987
APPLICATION:	Conduct calculated to mislead Court; Dishonest/unfair dealing with third parties in course of legal practice; Professional misconduct - solicitor ; Wrongful application of trust/controlled money or other valuable property -
MATTER FOR DECISION:	Principal matter
REPRESENTATION:	Applicant: l Pierotti, solicitor, instructed by R J Collins Respondent: P Capelin QC, instructed by Harrington Maguire & O'Brien, solicitors
ORDERS:	1. The solicitor be publicly reprimanded. 2. The solicitor be fined $2,000. 3. The solicitor pay the costs of the Council of the Law Society as agreed at $5,725. 4. The solicitor undertakes to the Tribunal that for a period of two years from the date of the Tribunal's determination and orders or 1 January 2000 he will agree to his Practising Certificate being endorsed by the Law Society of New South Wales with a condition that his right to practise is subject to his practising in the employ of or in partnership with a Solicitor or Solicitors holding an unrestricted Practising Certificate. 5. If there is any delay in the solicitor being able to arrange the aforesaid he can approach the Tribunal for assistance.

1 These proceedings are before the Tribunal following the filing of an Information by the Law Society on 23 September 1998. The claims against the solicitor are that he was guilty of professional misconduct and unsatisfactory professional conduct. The particulars supplied with the information are:

(i) In October 1993 he, without authority, in the Kent matters signed the name of Howard Simons to two trust account cheques, which cheques were ultimately presented to the bank and met by debit to the account styled “Remington & Co Trust Account trading as Simons Howard Norman”.

(ii) In the matter of Builders Bargain Centre v Polley, being proceedings for small debt recovery in the Small Claims Division of the Local Court the Solicitor prepared a statement to be used in the proceedings. Having asked a staff member to sign the name of an employee of the client Builders’ Bargain Centre, and being refused, the Solicitor then signed the statement using the employee’s name which falsely signed statement was tendered in the proceedings.

(iii) By the insertion of a false date in a contract and producing that contract for stamping in a conveyancing matter for client Apostolidis, the Solicitor attempted to evade payment of additional stamp duty by way of a fine and committed a fraud on the Office of State Revenue.

(iv) As in Apostolidis conveyance and again in Rudd and again in Davies the Solicitor inserted a false date in a contract to avoid payment of additional stamp duty by way of a fine and committed fraud on the Office of State Revenue.

2 The Solicitor is aged 33 years and was admitted to practice on 29 June 1990. He is a single man and resides with his parents. He gave evidence of being a chronic asthma sufferer since he was 3 years of age with bronchitis. In the Higher School Certificate he achieved a mark of 453. In 1989 he graduated at the University of New South Wales with a combined Bachelor of Commerce and Bachelor of Laws Degree. From October 1989 to February 1990 he was employed as a junior clerk in a medium sized firm of solicitors, following upon which he completed the College of Law course.

3 After admission he began employment in August 1990 with Remington & Co a small firm of solicitors with a principal, and, at that stage, one employed solicitor. It was a small but very busy practice with the principal spending most of his time out of the office and the employed solicitor, Mr Hurley, working long hours of 9 am to 7pm and 9am to 9 pm or 10 pm on Mondays to Fridays and a full day, on an average, every second Sunday. The practitioner was involved in legal work including personal injury, debt collection, commercial litigation, conveyancing mortgage work, wills, probate and assisting the principal in the conduct of his work.

4 In October 1994 the practitioner was appointed as a salaried partner so that in addition to his salary he was entitled to a share of the profits from the matters under his control.

5 About this time another solicitor was employed. The firm then consisted of the principal, a salaried partner and one employed solicitor. The principal made a complaint to the Law Society on or about 1 September 1998 relative to the practitioner’s conduct in signing cheques as well as falsely signing the document which was used in the debt recovery procedure. The solicitor was dismissed by the principal following his complaint to the Law Society. The practitioner had been with the firm from August 1990 until September 1995.

GROUND 1

6 The usual practice of the firm was not to use the Trust Account in conveyancing matters. Proceeds of sale on behalf of vendors and the balance of purchase price on behalf of purchasers were directed to the payment to either the vendor client or the purchaser client.

7 Problems arose in this matter as two sisters jointly owned a unit. One sister sold her share to the other. This sale was completed on 25 October 1993 and a Bank Cheque received. It was intended that on the same day the vendor sister would complete a purchase of another unit, the balance of her purchase price coming from an advance from Westpac Bank. The principal solicitor was away from the office on leave until 1 November 1993.

8 The practitioner decided that the only way out was to bank the bank cheque and to draw against it with the cheques for settlement. This was achieved by the practitioner signing the two cheques in front of the bookkeeper who, acting on the instructions from the practitioner, had drawn two cheques. The sale and purchase were settled.

9 The practitioner informed his principal of his actions as soon as the principal returned to the office on 1 November 1993.

10 Instead of postponing settlement until proper arrangements could be made, the practitioner’s behaviour was one of professional misconduct. It was the Law Society representative’s view that, as the bank cheque had not been cleared, the drawing from Trust was from other clients’ funds. This is so despite the fact that the proceeds of the cheques were properly applied.

GROUND 2

11 In a small debt recovery action the solicitor needed a former employee of the client company to sign an unsworn statement. On the morning of the hearing, 14 July 1995, he asked a female member of the staff to sign the document using the employee’s name. She refused. The solicitor falsely signed the document using the employee’s name and mislead the Court by using the document in the action. Judgement with costs were made in favour of the client.

12 The female staff member reported the matter to the principal of the practice that day and a full disclosure was made by the solicitor to his senior partner. Discussions in the office lead to an agreement following upon which the solicitor sought counselling from a person appointed by the Law Society on 17 July 1995. The practitioner at his own expense had the judgment set aside and he paid the client’s expenses

13 The solicitor’s asthma and bronchitis had been more severe and he also had stomach complaints. In January 1994 he had chicken pox. He took a week’s holiday in Queensland. On return 1 September 1995 he was informed by his Senior Partner that he had made a report to the Law Society. In their conversation at the principal’s home the solicitor informed him of his altering the dates of contracts of sale which constitute: grounds 3, 4 and 5 of the information.

GROUNDS 3, 4 AND 5

14 In these 3 conveyances Apostolidis, Rudd and Davis the practitioner inserted a false date in the contracts to avoid fines and committed a fraud on the Office of State Revenue.

15 The Tribunal noted that there was no misappropriation. No client was out of pocket. The practitioner paid the fines and other expenses. One conveyance was a first home purchase and no additional stamp duty or fine was payable because stamp duty was already being deferred in terms of the scheme. Fines imposed in total were $2,500. In the small debt case the client was paid $1,125.

SUMMARY

16 The practitioner has 14 friends who have sworn affidavits as to his good character. One such affidavit is by a friend of 20 years who is also a family friend. They live in the same area, attended the same school and University, are both solicitors and see one another regularly. He describes the Respondent as a very honest, hardworking, reliable, well balanced and good natured person and a very competent and thorough solicitor, working long hours with a modest lifestyle. Mr K A Quinn, Retired Magistrate deposes that “I will have no difficulty in accepting your appearance before me in the future”. Mr Quinn was the Magistrate in the small debt matter and is fully aware of these proceedings.

17 The Respondent has made a full disclosure to each of the deponents to the 14 affidavits being four barristers, one retired Magistrate and eleven solicitors. They all depose in similar terms as to the Respondent’s character and honesty.

18 We were supplied with reports of six cases involving similar findings of professional misconduct. Five summarised findings of stamp duties avoidance cases. Luff’s case being specially drawn to our attending peers, a copy of the legislation re stamp duty avoidance.

19 In considering the facts before us we have a young solicitor, single, living with his parents. He suffers from asthma and bronchitis, works long hours and had apparent stress when the five transgressions took place. They were apparently completely out of character. He has an unrestricted practising certificate. The two Kent cheque cases occurred in October 1993. He reported them in full disclosure to his Senior Partner. The small debt case occurred in July 1995. Again a full disclosure to his partner when the female staff employee reports his actions.

20 The three stamp duty avoidance cases were also fully disclosed in 1995. He gave evidence and was cross examined. He expressed his shame and regrets his serious misconduct. He made an open admission to his wrongful behaviour. He fully cooperated with the private and confidential counselling practitioner on 17 July 1995 and the Trust Account Inspector on 13 October 1995. He made apologies to clients and staff and Senior Partner.

21 He demonstrated humiliation, shame and sorrow and a firm expression that he would not depart from his responsibilities as a solicitor in the future if he was allowed to continue in practice. Mr Caplin QC for the practitioner quoted the judgment of the late Mr Justice McClement in November 1974 which Mr Dean of Queens Counsel (as he then was) appeared for the Respondent. His Honour in part said:

“I consider it inconceivable that the respondent would re-offend... the matters were not for personal gain... the respondent’s contriteness, shock and despair of the matters raised in the information were overtly apparent the acts were of inexcusable stupidity, not likely to be repeated.”

22 The respondent has personally paid or will pay:

(i) Law Society costs $5725

(ii) His own costs

(iii) Debt recovery client costs $1125

(iv) Stamp duty fines $2,540

$9,390

23 His own legal costs would be in excess of those of the Law Society so that he has in fact fined himself some $15,000 or more because of his inexcusable stupidity.

24 Evidence was given from the Bar Table that the Respondent took home about $500 a week. The two cheque cases were in October 1993. The small debt case in July 1995 and the Stamp Duty avoidance cases in 1994/1995.

25 Since being dismissed by his then Senior Partner on 3 September 1995 the Respondent has had a full practising certificate and has had no problems of a conduct nature. His practice by himself and at times others has been under stress from the inevitability of the present proceedings. He has a good record for that period.

26 Because of his good behaviour and the expenses he has paid we make formal orders as follows:

(i) The solicitor be publicly reprimanded.

(ii) The solicitor be fined $2,000.

(iii) The solicitor pay the costs of the Counsel of The Law Society as agreed at $5,725.

(iv) The solicitor undertakes to the Tribunal that for a period of two years from the date of the Tribunal’s determination and orders or 1 January 2000 he will agree to his Practising Certificate being endorsed by the Law Society of New South Wales with a condition that his right to practise is subject to his practising in the employ of or in partnership with a Solicitor or Solicitors holding an unrestricted Practising Certificate.

(v) If there is any delay in the Solicitor being able to arrange the aforesaid he can approach the Tribunal for assistance.

Last Updated: 01/05/2000