Law Society of New South Wales v Ritchie
[2004] NSWADT 165
•08/11/2004
CITATION: Law Society of New South Wales v Ritchie [2004] NSWADT 165 revised - 25/08/2004 DIVISION: Legal Services Division PARTIES: APPLICANT
Council of the Law Society of New South Wales
RESPONDENT
Ian Andrew RitchieFILE NUMBER: 032014 HEARING DATES: 2/12/2003, 3/2/2004 SUBMISSIONS CLOSED: 02/03/2004 DATE OF DECISION:
08/11/2004BEFORE: Barnes M - Judicial Member; Greenwood J - Judicial Member; Hoareau D - Non Judicial Member APPLICATION: Professional Misconduct - breach of s. 61 of the Legal Profession Act - Professional Misconduct - breach of s. 62 of the Legal Profession Act - Professional Misconduct - misappropriate trust moneys/moneys - Professional Misconduct - overcharge MATTER FOR DECISION: Principal matter LEGISLATION CITED: Legal Profession Act 1987 CASES CITED: Hodgekiss (1962) 62SR(NSW) 340
Mayes and Legal Practitioners Act [1974] 1NSWLR19REPRESENTATION: APPLICANT
P Boyd, solicitor
RESPONDENT
No appearanceORDERS: 1. Ian Andrew Ritchie’s name be removed from the Roll of Legal Practitioners; 2. Ian Andrew Ritchie pay the costs of the Informant of and incidental to these proceedings, as qualified in the Reasons for Decision
REASONS FOR DECISION
1 The matter was initiated by an Information filed on 15 September 2003 raising a wide range of serious allegations and orders were sought that the Legal Practitioner’s name be removed from the Roll of Solicitors together with an order for costs.
2 This matter was listed for hearing on 2 December 2003 and at that time there was no appearance by or on behalf of Ian Andrew Ritchie (hereafter referred to as the Legal Practitioner). The Council of the Law Society of New South Wales was represented by Mr. Boyd (hereafter The Law Society).
3 Nor had a Reply been filed on behalf of the Legal Practitioner.
4 An issue arose as to whether the Legal Practitioner had received and alternatively been served with an Affidavit of Jean Sayer sworn 15 August 2003 and the annexures thereto.
5 This Tribunal considered this a significant issue as the annexures to the Affidavit were the reports prepared by Jean Sayer who was appointed an Investigator of the Legal Practitioner’s affairs pursuant to Section 55 of the Legal Profession Act on 23 March 2000. The Law Society’s evidence available on 2 December 2003 raised concerns for the Tribunal in relation to issues of natural justice in terms of the legal practitioner being on notice of the allegations he had to meet during the investigative stage of the Law Society process, prior to the Information being filed and issues in relation to service of the originating process before the Tribunal.
6 The Society in seeking to persuade the Tribunal that the matter could proceed on 2 December 2003 had relied on correspondence from Mid Mountains Legal Practice of 25 September 2003 which provided:
7 The Society had further correspondence with that practice of 30 September 2003 in which it confirmed the Tribunal was not a consent jurisdiction and made available certain information.
“We refer to the Information served on Mr. Ritchie and advise we are instructed by Mr. Ritchie to consent to the orders sought.
Mr. Ritchie is not working and still receiving counselling for the problems which have previously been fully disclosed to the Society and in which these proceedings have their origin. There are no further submissions which can be usefully made beyond those which Mr. Ritchie and this firm have put before the Society. Clearly the Society is still of the view that Mr. Ritchie’s actions were deliberate and although he continues to deny this allegation, he is no longer of a mind to pursue the matter; every time further correspondence is received from the Society, he suffers a reverse in health and it is pointless to further exacerbate his already significant problems by engaging in litigation.
Mr. Ritchie has no desire or interest to ever again practise law and while he would obviously have preferred that he be allowed to retire from the profession, he accepts as inevitable the Society’s decision not to permit him this exit.
Our client is not able to incur costs relating to these proceedings and requests that they be finalised in the shortest and simplest way.
It would appear that orders by consent are the simplest way of disposing of this matter and should be pleased if you would forward same to us for execution on his behalf.
Yours faithfully,
MID MOUNTAINS LEGAL PRACTICE”
8 Further the letter noted:
9 Mid Coast Legal Practice by letter of 14 October 2003 to the Law Society stated:
“For the record as there was a number of letters to you were not responded to, it was necessary for the Society to engage a process server to locate and serve personally your client.”
10 By letter of 20 November 2003 the Law Society affirmed the hearing date and made it clear in summary that it will be seeking to rely upon the material in the Particulars and Affidavits served as a basis for adverse findings being made against the Legal Practitioner.
“We confirm that we are instructed to make no representation on Mr. Ritchie’s behalf, he does not intend appearing at any Hearings of this matter nor has he requested us to appear on his behalf.
We note that we are unable to consent to orders, but absence of appearance or submissions should permit the matter to be dealt with expeditiously and we request that you use your best endeavours to bring the matter to an early conclusion.”
11 The Tribunal determined it was necessary to adjourn the proceedings and interim directions were given in relation to effecting service of that documentation. The Tribunal noting it was not a consent jurisdiction and given the seriousness of the orders sought, was not prepared to at that time waive in part, the service obligations of the Law Society.
12 The matter was listed for further hearing on 3 February 2004. Again there was no appearance by the legal practitioner and the Tribunal is satisfied the legal practitioner was aware of the time and date of the hearing.
13 At that time the Law Society satisfied the Tribunal that the Solicitor was well aware of the reports of Jean Sayer and any issue as to the adequacy of service of the initiating process had been addressed.
14 The Tribunal considered it was important to address this procedural issue and having done, so save for certain limited comments that will be made in relation to costs, turns to consider the merits of the proceedings.
15 The Legal Practitioner was admitted on 21 December 1977 and practised until 23 March 2000 at which time his Practising Certificate was cancelled. There was no suggestion that the Solicitor has sought to practice thereafter.
16 The Information nominates four grounds of Professional misconduct:
17 Section 61 of the Legal Profession Act 1987 provides:
a) The Legal Practitioner wilfully breached Section 61 of the Legal Profession Act 1987 ;
b) The Legal Practitioner wilfully breached Section 62 of the Legal Profession Act 1987;
c) The Legal Practitioner misappropriated trust funds;
d) The Legal Practitioner grossly overcharged.
18 The factual circumstances relating to the grounds of professional misconduct and the particulars thereof, in many circumstances overlap and the Tribunal does not seek to unduly repeat or duplicate the particulars of the allegations relevant to make out any alleged act of professional misconduct.
61 Money received by solicitor on behalf of another
(1) A solicitor who, in the course of practising as a solicitor in this State, receives money on behalf of another person:
(a) must pay the money, within the time prescribed by the regulations, into a general trust account in New South Wales at an approved financial institution and must hold the money in accordance with the regulations relating to trust money, or
(b) if the person on whose behalf the money is received directs that it be paid or delivered to a third party free of the solicitor control, must ensure that the money is paid or delivered:
(c) if the person on whose behalf the money is received directs that it be paid otherwise than into a general trust account or to a third party, must pay the money as directed and (if the money is to be held under the direct or indirect control of the solicitor) must hold the money in accordance with the regulations relating to controlled money.
(i) before the end of the next working day or, if that is not practicable, as soon as practicable after the next working day, or
(ii) no later than the day allowed by the solicitor’s authority or instructions (if that day is later than the day allowed under subparagraph (i)), or
(2) In any of those three cases, the solicitor must hold the money exclusively for, and must disburse the money in accordance with the directions of, the person on whose behalf it is held.
(3) This section:
(a) does not prevent a solicitor from depositing money with the Law Society in compliance with section 64, but this section continues to apply to any money so deposited that is repaid to the solicitor, and
(b) does not prevent a solicitor from withdrawing or receiving, from trust money or controlled money:
so long as the procedure prescribed by the regulations is followed, and
(i) reimbursement for disbursements paid by the solicitor, or
(ii) money for disbursements to be paid by the solicitor, or
(iii) money due, or to accrue due, to the solicitor for costs,
(c) does not affect any enforceable lien or claim that a solicitor has to any money, and
(d) does not prevent a solicitor from exercising a general retaining lien for unpaid costs and disbursements in respect of money in a trust account or a controlled money account (other than money received subject to an express direction by the client with respect to the purposes for which the money is to be applied), and
(e) does not prevent a solicitor from holding, or disposing of, a cheque or other negotiable instrument payable to a third party if the solicitor does so on behalf of a client and in accordance with directions given by the client, and
(f) does not affect an authority that a solicitor has and that, apart from this section, is irrevocable.
(4) A lien referred to in subsection (3) (d):
(a) may not be exercised for an amount in excess of the sum of the costs and disbursements unpaid, and
(b) may not be exercised unless the solicitor has delivered a bill of costs and disbursements to the client on whose behalf the money is held.
(5) Money received by a solicitor on behalf of another person:
(a) is not available for payment to a creditor of the solicitor, and
(b) is not liable to be taken in execution of any judgment, order or other process of any court or tribunal at the instance of a creditor of the solicitor,
unless the creditor is the person on whose behalf the money is held by the solicitor.
(6) If a Crown Solicitor’s Trust Account is established as prescribed by the regulations, this section applies to money received by the Crown Solicitor from a person for whom, or a body for which, the Crown Solicitor acts.
(7) If a trust account kept by a solicitor is, as authorised by or under the regulations, operated on by a person other than the solicitor, section 53 of the Trustee Act 1925 does not apply to the person in relation to the operation on the trust account.
(8) It is professional misconduct for a solicitor to wilfully contravene subsection (1) or (2).
(9) In this section:
"approved financial institution" means a bank, building society or credit union that has an agreement with the trustees of the Public Purpose Fund relating to the payment of interest on general trust accounts (as referred to in section 69E).
"controlled money" means money required to be dealt with in accordance with subsection (1) (c) that, while under the direct or indirect control of the solicitor by whom or on whose behalf it is received, is for the time being held otherwise than in a general trust account at an approved financial institution.
"trust money" means money required to be dealt with in accordance with subsection (1) (a).
(10) A reference in subsection (1) to a third party does not include a reference to an associate of a solicitor.
19 The Tribunal in considering the allegations remains mindful of:
20 Particulars of the allegations that Legal Practitioner wilfully breached Section 61 of the Legal Profession Act, involved a wide range of matters, being:
a) The application of the Laws of Evidence to these proceedings generally.
b) The onus of proof being upon the Law Society
c) The standard of proof required to make out a range of very serious allegations against the legal practitioner
a) The matter of Souraya and Mohamed Kahled el Ali (Kahled el Ali matter)
21 The Tribunal finds this matter related to the legal practitioner acting on the purchase of a property at Katoomba financed with a mortgage advance from the Commonwealth Bank.
22 The Tribunal finds on 6 August 1999 Mr. el Ali gave the legal practitioner $6,000.00 in cash and in exchange the legal practitioner gave Mr. el Ali a cheque drawn from his Trust Account in the sum of $6,000.00. The cash amount was never credited to the legal practitioner’s Trust Account held in the name of the clients. Once the Trust cheque for $6,000.00 was presented the Trust Account Ledger was overdrawn to the extent of $6,000.00.
23 This is a patent breach of Section 61 and the Legal Practitioner is guilty of professional misconduct.
b) The matter of Carl Nicholas Harris (Harris matter)
24 The Tribunal finds this matter involved Elizabeth Harris acting under a Power of Attorney from her husband Carl Harris, in relation to the sale of the husband’s dental practice and in relation to matters pertaining to the Dental Health Board.
25 In this matter the Tribunal finds the legal practitioner prepared a memorandum of costs of 27 September 1999 in the sum of $800.00, the original of which was kept on the file and claimed costs for acting to date. The memorandum was never delivered to the client. On 30 September 1999 the legal practitioner without his client’s knowledge or authority debited from the Trust Account the sum of $800.00. This was a clear breach of s.61.
26 Further the Tribunal finds that on 29 December 1999 a Trust cheque was drawn in favour of Raine & Horne for $3,500.00. There was no authority by or on behalf of Mrs Harris to effect such a payment. The ultimate entry in the Trust cash book described the amount as a debt. This is a clear breach of Section 61 (2). The Legal Practitioner in each case is guilty of professional misconduct.
c) The matter of William Joseph Offord and Jenny Mary Dawes (Dawes matter)
27 The Tribunal finds this matter involved these clients instructing the legal practitioner to act on the sale of a Katoomba property and the purchase of a property at Hartley financed by a mortgage advance from St. George Bank.
28 In respect of this purchase of property at Hartley the Tribunal finds on 5 July 1999 the legal practitioner drew a cheque on the client’s Trust account in the sum of $4,388.00 for costs and estimated Stamp Duty as follows:
29 The cheque was deposited to the legal practitioner’s General account on 5 July 1999. The estimated Stamp Duty should have been deposited into Trust and remain in Trust. Failure to do so constitutes a breach of s.61. The Legal Practitioner is guilty of professional misconduct.
Costs for acting on the sale and purchase
Discharge of Mortgage and Mortgage to St. George Bank $2,000.00
Estimate of Stamp Duty $2,388.00
Total $4,388.00
30 Further the legal practitioner permitted his Trust Account to be overdrawn by creating a debit balance in the sum of $10.00 in that on 7 July 1999 the Trust ledger account had a balance of $207.19 and on 1 November 1999 the legal practitioner drew a Trust cheque Number 401725 payable to the clients in the sum of $217.19, thus creating the debit balance of $10.00. Again a breach of s.61 and the Legal Practitioner is guilty of professional misconduct.
d) The Estate of the Late Harold Clement Williams (Estate of Williams)
31 The Tribunal finds this matter involved Fay Williams as the client who was the daughter of Harold and Doris Williams, noting that Doris Williams died on 23 May 1996 and Harold Williams died on 30 June 1996. Instructions were received to secure a Grant of Probate in relation to the Estate of the father, Harold Clement Williams.
32 The Tribunal further finds the legal practitioner created two Trust accounts. In relation to FP Williams re: Estate of DM Williams – Account No. 9675 on 11 September 1996 the ledger account had a credit balance of $8,880.76, that day the legal practitioner made an interim distribution to the client of $10,000.00 creating a Trust debit of $1,119.24. This conduct was a breach of s.61 and professional misconduct.
33 On 28 February 1997 the ledger account of PF Williams re: Estate of HC Williams – Account No. 96/97 had a credit balance of $70,245.52 and on 5 March 1997 the legal practitioner drew two cheques in favour of the client, one for $100,000.00 and another for $80,000.00 resulting in a debit balance of $29,754.48 and $109,754.48 respectively. Further on 6 March the Solicitor made a withdrawal of $2,000.00 for “part costs” and deposited these funds to his General account which further accentuated the debit balance to $111,754.48. That debit was eliminated on 13 March 1997. The conduct of allowing two debit balances in Trust was a breach of s.61 and professional misconduct.
34 Further on 6 April 1997 the Trust ledger had a credit balance of $147,940.99 and the legal practitioner made distributions totalling $190,000.00 creating a debit balance of $42,059.01. Further on 23 April 1997 the legal practitioner made a further distribution to the client of $3,946.79 thereby increasing the debit to $46,005.80. The Trust account was in debit for substantial amounts and for substantial periods of time. This is a serious breach of s.61 and constitutes professional misconduct.
35 Whilst the facts bear out the legal practitioner took some remedial steps to place the Trust Account back in credit those steps do not in any significant way ameliorate the extent of the legal practitioner’s errors and breach of his statutory obligations.
e) The matter of Deidre Jayne Hockley (Hockley matter)
36 The Tribunal finds this matter involved the legal practitioner acting on the client’s behalf in the purchase of property at Wentworth Falls.
37 The Tribunal finds on 28 April 1999 the sum of $10,500.00 was received from the client being the deposit initially payable on exchange. This sum was deposited to the credit of the legal practitioner’s Trust Account and held in the name of the client. Amounts were withdrawn from the Trust Account and paid:
38 Following the drawing of the final cheque the account was in debit to the extent of $500.00. The placing of the Trust account in debit was a breach of s.61 and constitutes professional misconduct.
a) 29 April 1999 Raine & Horne – deposit on purchase $9,000.00
b) 30 April 1999 Ian Ritchie & Co - costs $1,000.00
c) 30 April 1999 Ian Ritchie - costs $1,000.00
39 The transfer of costs occurred without authority and further on 21 July 1999 the Solicitor drew a further Trust cheque for costs in the sum of $1,500.00. This transfer without authority was a breach of s.61 and constitutes professional misconduct.
40 Stamp Duty was payable on the Contract in the sum of $2,165.00 however such payment was not made to the Office of State Revenue until 25 August 1999. The payment of that money resulted in a debit balance in the Trust Account of $596.18. That debit increased to $710.18 when a cheque was drawn on 18 August for registration fees payable to the Land Titles Office. The Trust account was clearly overdrawn and s.61 breached.
f) The matter of Paul and Sophie Hawreluk (Hawreluk matter)
41 The Tribunal finds the matter involved the legal practitioner acting on the client’s behalf in the purchase of property at Katoomba.
42 The Tribunal finds that by letter of 24 November 1998 the legal practitioner disclosed that his costs for acting would be $1,381.50. From funds held in the client’s Trust account the legal practitioner paid the selling agent $4,500.00 on 21 December 1998 and drew the balance on that same day for his costs.
43 There was no authority to take costs at that time and indeed contracts were not exchanged until 23 December 1998. This was a breach of s.61 and the Legal Practitioner is guilty of professional misconduct.
44 After settlement which occurred on 16 February 1999 there remained a balance in Trust of $50.00 and without authority by letter of 16 May 1999 the legal practitioner prepared a memo of costs claiming an additional $50.00 and acknowledging payment thereof. There is no evidence of this bill of costs having been delivered to the clients. This is a clear breach of s.61 and constitutes professional misconduct by the Legal Practitioner.
g) The Estate of Arnold Hayles Drayton (Estate of Drayton)
45 The Tribunal finds Mr. C. Drayton and Ms. M. Campbell as clients instructing the legal practitioner to secure a Grant of Probate of the Will of the deceased, Arnold Drayton.
46 The Tribunal finds a breach of s.61 in that there was a transfer of costs without any authority when on 14 October 1999 the legal practitioner withdrew $400.00 from the client’s Trust account for costs. The Legal Practitioner is guilty of professional misconduct. No memorandum of costs for the figure of $400.00 was prepared.
h) The matter of John Thomas Harris and Viola Elizabeth Harris (Harris matter)
47 This matter involved the clients instructing the legal practitioner to act on the purchase of property at Katoomba noting the clients obtained a Westpac deposit guarantee in lieu of paying a 10% deposit of $9,500.00
48 The Tribunal finds that s.61 has been breached by the legal practitioner in that whilst contracts were exchanged on 25 February 1999 the legal practitioner drew a cheque for his costs in the sum of $1,000.00 from the client’s Trust account on 26 February 1999. The Legal Practitioner is guilty of professional misconduct.
49 Further the legal practitioner by his conduct created a Trust debit balance in the sum of $100.00 as on 9 March 1999 the balance held in the Trust account was $1,719.00 and on that date the legal practitioner drew a cheque in favour of the Office of State Revenue for Stamp Duty in the sum of $1,819.00. This too is a breach of s.61 and constitutes professional misconduct by the Legal Practitioner. This debit upon review was created by the legal practitioner in fact drawing $100.00 in excess of the amount due to him for costs. Further the legal practitioner did not issue a memorandum of costs to the client nor did he prepare a Trust statement for monies received and disbursed.
i) The matter of A. Tunstead (Tunstead matter)
50 The Tribunal finds this matter involved A. Tunstead instructing the legal practitioner to act on the purchase of property at Wentworth Falls.
51 The Tribunal finds that the legal practitioner by his conduct permitted the Trust account to be in debit and the legal practitioner received the client’s personal cheque for $4,671.50 for Stamp Duty on 2 June 1999 which was deposited to the credit of the legal practitioner’s Trust account.
52 However without waiting a prudent period for the cheque to clear on the same day the legal practitioner drew a Trust cheque for that sum payable to the Office of State Revenue which was presented on 8 June 1999. The client’s personal cheque was dishonoured on 3 June and it was not until 16 June 1999 a replacement cheque for $4,671.50 was received from the client and deposited for the credit of the client’s Trust account. The Trust account was in debit to the extent of $4,371.50 for a matter of days and this is a breach of s.61 and professional misconduct by the Legal Practitioner.
j) The Estate of the Late Reinis Zusters (Zusters matter)
53 The Tribunal finds this matter involved Vanita Zusters instructing the legal practitioner to obtain a Grant of Probate in relation to the Will of her late husband Reinis Zusters.
54 The Tribunal finds there was a transfer of costs from Trust to the General account without authority and in particular there was a transfer of costs from the client’s Trust account by cheque payable to Ian Ritchie & Co on 23 February 2000 for $1,500.00. A further cheque was drawn in the same matter on 23 March 2000 for $1,000.00. Whilst ultimately a bill was prepared on 23 February 2000 for $2,500.00 inclusive of disbursements that were not specified and the bill was not delivered to the client.
55 There was a clear breach of s.61 in transferring money without authority and the Legal Practitioner is guilty of professional misconduct.
k) The Estate of the Late Edna Joy Devenish (Estate of Devenish)
56 In this matter Mrs. Y. Lloyd was named as Executrix of the Will of Edna Devenish and the legal practitioner assumed the conduct of the matter from another solicitor in relation to the Estate, noting an interpretation of the Will had been sought from Counsel by the prior Solicitor.
57 The Tribunal finds Probate was granted on 29 January 1998.
58 An estate account was held with the St. George Bank and the legal practitioner became a signatory of that account when he took over the matter. On 4 May 1998 the legal practitioner withdrew from the St. George Bank account the sum of $18,500.00 which he deposited into the Trust account to the credit of the Trust account of the Estate allocated number 98/54.
59 The Tribunal is satisfied that without authority on or after 4 May 1998 the legal practitioner paid costs to himself from the account being:
60 The legal practitioner issued a memorandum of costs on 4 May in the sum of $1,500.00 and issued a further bill on 19 May in the sum of $1,000.00.
4 May 1998 $1,500.00
21 May 1998 $1,000.00
29 May 1998 $7,500.00
61 The taking of the costs was done without authority to do so. This is a clear breach of s.61. The Legal Practitioner is guilty of professional misconduct.
l) The Estate of Costica Grigorita (Estate of Grigorita)
62 In this matter Glen Nash as Executor named in the Will of the deceased Costica Grigorita instructed the legal practitioner to act in relation to the Estate. Probate was granted on 4 December 1990. Certain difficulties arose in relation to the Estate’s claim under an insurance policy following the destruction by fire in early 1990 of business premises and contents, in which the deceased had an interest.
63 In the course of the matter on 24 February 1997 the legal practitioner wrote to his client in substance requesting a sum of $7,000.00 be made available at this stage with the intention of it being distributed between the legal practitioner and Mr. Warren a Barrister.
64 On 7 April 1997 the sum of $6,992.00 was received from Teodor Prelipcean, a beneficiary under the Estate and credited to the Trust account.
65 Without authority the legal practitioner withdrew costs of:
66 This being a total of $6,992.00 and no part of this money was paid to Mr. Warren of Counsel or held in the Trust account on behalf of Mr. Warren’s fees. This was a clear breach of s.61 and the Legal Practitioner is guilty of professional misconduct.
17 April 1997 $5,135.00
28 May 1997 $1,887.00
67 Further the legal practitioner’s conduct in dealing with the sum of $65,000.00 identified in the context of misappropriation subsequently in this decision also involved a clear breach of s.61 and again the Legal Practitioner is guilty of professional misconduct.
m) The matter of Gregory James Quinton and Sonja Mari Graham (Quinton and Graham matter)
68 The Tribunal finds Gregory Quinton and Sonja Graham instructed the legal practitioner in the sale of a property in Peckman’s Road, Katoomba and the purchase of a property at 103 Fitzgerald Street, Katoomba.
69 On 30 March 1999 the deposit on the sale of $15,500.00 was received by the legal practitioner and deposited to the credit of the legal practitioner’s Trust account held in the clients names related to sale. Such deposit was held by the legal practitioner as stakeholder.
70 The legal practitioner utilised those monies at least in part for his own benefit and in particular as at 30 September 1999 took the sum of $1,000.00 for costs and as at 15 April 1999 took the sum of $1,224.00 for costs and Stamp Duty.
71 There was no authority at any stage to release the deposit.
72 On 23 August 1999 the Stamp Duty was paid by a cheque drawn on the General account in the sum of $524.00.
73 There has been a clear breach of s.61 and the Legal Practitioner is guilty of professional misconduct.
n) The Estate of the Late Margaret Page (Estate of Page)
74 The Tribunal finds Margaret Page died on 27 May 1998 and Ms. D. Herron was named Executrix. Ms. Herron instructed the legal practitioner in relation to obtaining a Grant of Probate of the Will of the deceased, realising the assets of the Estate and distributing Estate Funds.
75 The Tribunal finds Probate was granted on 23 November 1998 and that the legal practitioner on 14 December 1998 drew from the Trust Account the sum of $5,000.00 for costs.
76 There was no authority to do so and by letter of 18 January 1999 the legal practitioner wrote to the client enclosing a memorandum of costs and disbursements dated 14 December 1998.
77 There has been a clear transfer without authority and a breach of s.61. The Legal Practitioner is guilty of professional misconduct.
o) The matter of Alexander Keith Porter and Lola Gwendolyn Porter (Porter matter)
78 The Tribunal finds in this matter, Alexander and Lola Porter instructed the legal practitioner in relation to the sale of a property at Wentworth Falls.
79 The Tribunal finds there was an overdrawing of the Trust account in that on 20 January 2000 a cheque in the sum of $1,500.00 was deposited to the credit of the legal practitioner’s Trust account held in the name of his clients. On the same day a Trust cheque in the sum of $1,500.00 was drawn by the legal practitioner and deposited into his General account leaving a nil balance in Trust.
80 On 28 January the legal practitioner drew a further cheque of $1,500.00 from the Trust account in duplication of the previous amount. This created a debit balance of $1,500.00 which remained as at the date of the appointment of the receiver. Again a clear breach of s.61 and on one construction no more than sloppy bookkeeping however certainly the Tribunal is satisfied by reference to this matter individually and the other findings made dealing with s.61 that the legal practitioner’s conduct was wilful within the meaning of s.61 and constitutes professional misconduct by the Legal Practitioner.
p) The matter of Glen John Wray and Virginia Ann Wray (Wray matter)
81 The Tribunal finds in this matter Glen and Virginia Wray instructed the legal practitioner in relation to the proposed sale of a business to Sheard.
82 The Tribunal finds Mr. Sheard’s solicitors forwarded a cheque for the deposit referrable to the purchase of the business in the amount of $1,600.00 to the legal practitioner. The monies were not deposited into the legal practitioner’s Trust account. By letter of 28 October 1998 Mr. Sheard’s solicitors wrote to the legal practitioner requesting a refund of the $1,600.00, as the purchase was not proceeding.
83 The legal practitioner on 28 October drew a Trust cheque in the sum of $1,600.00 payable to J. Sheard. As at that date there were no funds in the client’s Trust account as a result the Trust account was placed in debit.
84 On 9 November a bank cheque was deposited to the client’s Trust account in the sum of $1,600.00 which eliminated debit.
85 Again there has been a clear breach of s.61 in permitting the Trust account to be overdrawn and the Legal Practitioner is guilty of professional misconduct.
q) The matter of Anthony Joseph Turnbull and Elaine Carol Turnbull (Turnbull matter)
86 The Tribunal finds in this matter Anthony and Elaine Turnbull instructed the legal practitioner in relation to the purchase of property at Medlow Bath, with finance to be obtained by mortgage from St. George Bank.
87 The Tribunal finds that on 24 March 1999 the legal practitioner rendered a bill to his clients totalling $2,000.00 and on 30 March 1999 a cheque was drawn on the client’s Trust account in the sum of $2,000.00. On that day the cheque was banked to the credit of the legal practitioner’s General account.
88 There were no monies in the client’s Trust account to meet the cheque in the sum of $2,000.00 and the account was accordingly in debit to this extent.
89 Again this is a flagrant breach of s.61 and the Legal Practitioner is guilty of professional misconduct.
90 The debit was eliminated on 22 April when the legal practitioner drew a cheque on his General account for the sum of $2,000.00 deposited to the credit of the client’s Trust account.
r) The matter of Marjorie Meakins (Meakins matter)
91 The Tribunal finds in this matter Marjorie Meakins instructed the legal practitioner in relation to the purchase of a property in Hume Avenue, Wentworth Falls.
92 The Tribunal finds contracts were exchanged on 27 November and as at 1 December the deposit payable in the sum of $17,500.00 was deposited to the credit of the legal practitioner’s Trust account held in the name of the client. The legal practitioner was holding the deposit as stakeholder.
93 On 1 December the legal practitioner drew from the deposit money, costs in the sum of $900.00 and it was not until 10 December the legal practitioner advised his client of details of his costs in the sum of $900.00 and Stamp Duty of $4,619.00.
94 The Tribunal is satisfied the sum of $900.00 was withdrawn without authority. Again a breach of s.61 and the Legal Practitioner is guilty of professional misconduct.
95 Further on 23 December the legal practitioner drew a cheque payable to Ian Ritchie & Co on the Trust account in the sum of $4,552.00. This created a Trust debit of $3.00. The cheque was deposited to the General account of the legal practitioner.
96 It was not until 13 January 1999 that the cheque was drawn on the legal practitioner’s General account in payment of the Stamp Duty in the sum of $4,619.00. The Tribunal is satisfied the Solicitor did not have authority to draw a Trust cheque on 23 December 1998. Again there is a clear breach of s.61 and the Legal Practitioner is guilty of professional misconduct.
s) The Estate of the Late Colin St. Clair (Estate of St. Clair)
97 In this matter Colin St. Clair died on 24 September 1997 and the Executors of his Will were Allen Hamilton and Clive Smith.
98 Probate was granted on 12 November 1997 and all costs due to the legal practitioner were drawn by 3 December 1997.
99 On 27 February 1998 the proceeds of sale from property owned by the deceased was received into the legal practitioner’s Trust account with the final distribution of the residual beneficiaries being paid from the proceeds of sale.
100 The legal practitioner prepared a Trust account statement on 6 March which stated the last entry showed a credit of $1,200.00 being an amount due to the Estate as the legal practitioner had personally made a payment into Trust as he had purchased a car owned by the deceased.
101 However as at 6 March 1991 the legal practitioner had not made the deposit in the sum of $1,200.00 and in fact the credit in the client’s Trust ledger account at that date was $1,642.64 as distinct from the recording of $2,842.64.
102 The monies were paid by the legal practitioner to the estate until 30 April 1999.
103 Further the transfer of the costs had occurred without authority. This is again a breach of s.61 and the Legal Practitioner is guilty of professional misconduct.
t) The matter of Russell John Kramer (Kramer matter)
104 The Tribunal finds that in this matter the legal practitioner was instructed on the sale of a property at Katoomba and on 23 December 1998 the 10% deposit was paid to the legal practitioner. That day this amount was deposited to the account kept by the legal practitioner with the St. George Bank No. 10038701. The account was styled Ian Ritchie & Co.
105 This is to be distinguished from the legal practitioner’s General account. The St. George account after the deposit of the $25,000.00 had a balance of $25,069.98. This is a clear breach of s.61 as the monies were not held for the purpose for which they were received and the Legal Practitioner is guilty of professional misconduct.
u) The matter of Du Rieu Hotels Pty. Ltd. (Du Rieu matter)
106 The Tribunal finds in this matter Mr. D. Du Rieu as the Director of Du Rieu Hotels Pty. Ltd. instructed the legal practitioner on the company’s purchase of property in Russell Street, Emu Plains.
107 The legal practitioner made a clear and unambiguous request for $6,894.00 to pay Stamp Duty. The client drew a cheque in that sum payable to the Office of State Revenue on 3 June 1999. For no explicable reason the legal practitioner deposited this cheque into his Trust account.
108 There is certainly no evidence of any express authority to so deposit and it was deposited contrary to the primary direction, as to the Payee. The Trust ledger identified the monies as having been received on 3 June 1999 for costs and Stamp Duty. This was not the case at all.
109 The legal practitioner had subsequently drawn down the money as follows:
110 This is a flagrant breach of s.61 and there was clearly no authority to take the monies for costs and in particular it is to be noted that other monies have been received which made specific provision within those monies for costs where the provision was $750.00. The Legal Practitioner is guilty of professional misconduct in both the depositing of the money into Trust and using it for costs.
3 June 1999 Ian Ritchie & Co costs on purchase $2,000.00
23 July 1999 Ian Ritchie & Co. costs on sale
and new purchase $1,000.00
13 October 1999 Office of State Revenue $3,894.00
Total $6,894.00
v) The matter of Kate Kassie McMurray (McMurray matter)
111 The Tribunal finds Kate McMurray instructed the legal practitioner on the purchase of property at First Avenue, Katoomba for the price of $35,000.00. A bank cheque for $3,500.00 was provided to Mr. Ritchie on 13 December 1999 payable to Ian Ritchie. That cheque was neither deposited into his Trust account nor was it paid to the Vendor’s agent Raine & Horne Katoomba. It has been established that the monies were deposited into the legal practitioner’s Office account. There was no authority to take these steps. It was in breach of the legal practitioner’s obligations and it is noted that the contracts were not exchanged until 22 December 1999. A clear breach of s.61 and the Legal Practitioner is guilty of professional misconduct.
112 Further monies were received into the legal practitioner’s Trust account on 31 January 2000 in the name of the client. The legal practitioner drew $1,200.00 from that account for costs on 31 January 2000. There is no evidence of any authority to make such a deduction. A further breach of s.61 and the Legal Practitioner is guilty of professional misconduct.
113 The legal practitioner never made any restitution of the figure of $3,500.00 and utilised other funds, not his own, for the purposes of making the deposit payment.
114 Particulars of the allegations that the legal practitioner wilfully breached Section 62 of the Legal Profession Act 1987. Section 62 provides:
62 Keeping of accounts
(1) A solicitor shall keep:
(a) in the case of trust money (within the meaning of section 61) accounting records, or
(b) in the case of money other than trust money such accounting records or other records (if any) as may be required by the regulations,
that disclose at all times the true position in relation to money received by the solicitor on behalf of another person.
115 In considering Section 62 there were submissions made in relation to the nature of accounting records by the Law Society and the Tribunal accepts that accounting records in relation to costs money is not strictly limited to entries that are made on a Trust ledger card but extends to the totality of the records associated with the file and this includes in the Tribunal’s opinion Trust statements, cheque butts, file notes and correspondence that directly addresses the movement of monies.
(2) The accounting records referred to in subsection (1) shall be kept in a manner that enables them to be conveniently and properly audited.
(3) Without limiting the generality of subsection (2), the accounting records referred to in subsection (1) shall, if the regulations so require, be kept in such manner as the regulations prescribe.
(4) A wilful contravention of subsection (1), (2) or (3) is professional misconduct.
116 This is the approach the Tribunal adopts in considering the particulars of alleged breaches of Section 62 which involve a wide range of matters:
a) The matter of Souraya and Mohamad Khaled el Ali
117 The Tribunal finds that Section 62 has been breached by the failure of the legal practitioner to accounting records which disclosed at all times the true position in relation to money received by the legal practitioner on behalf of another person, and specifically finds that Mr. el Ali provided the legal practitioner with cash totalling $6,000.00 on 6 August 1999. The legal practitioner drew a cheque on the Trust Account in the sum of $6,000.00 however never deposited the $6,000.00 into the Trust Account.
b) The matter of Carl Nicholas Harris
118 The Tribunal finds on 10 December 1999 the legal practitioner wrote Trust Receipt No. 0792 acknowledging receipt from Westpac of the sum of $8,850.22, when it should in fact have been for $8,856.22 being super funds in the matter of Harris Number 99/116. The client’s Trust ledger records receipt from Westpac being “super funds” in the sum of $8,850.22. The client had no knowledge of this amount which was not received on behalf of her husband. This is a clear breach of s.62 as the records fail to disclose the true position.
119 Further the Tribunal finds on 29 December 1999 the Trust ledger records of payment to Raine & Horne in the sum of $3,500.00 being for one “debt” the entry in the Trust cash book was initially described as “deposit”. This word was ruled out and the amount was described as “debt”. Previously the amount may have been shown as McMurray but this name was deleted and the name of Harris and the account number of Harris written in the cash book against the cheque by the legal practitioner. The client states that she has no knowledge of this payment and has had no dealings with Raine & Horne. The amount was not paid to or on behalf of the client. Again there has been a flagrant breach of s.62 in terms of the failure of the account records to disclose the true position.
c) The Estate of the Late Harold Clement Williams
120 The Tribunal refers to the findings of fact made in relation to the breach of s.61 and it is clear there has been a further breach of s.62 in that the accounts failed to disclose the true position and that throughout the course of this particular transaction this occurred on a number of occasions.
d) The matter of Paul and Sophie Hawreluk
121 The Tribunal finds that the Trust Account statement prepared incidental to this property purchase incorrectly showed one of the cheques drawn on settlement as being for $40,494.14 rather than $40,449.40. The total on the statement of monies disbursed on behalf of the clients was also incorrect in that it showed the total amount disbursed as being $111,449.15 rather than $117,492.15.
122 The Law Society submitted that this statement constituted part of the records for the purposes of s.62, that is it falls within the accounting records. The Tribunal accepts this.
123 This is a clear breach of s.62. There is no allegation that any monies had been misappropriated in the preparation of this Trust account statement.
e) The Estate of the Late Reinis Zusters
124 The Tribunal is satisfied that there has been a clear breach of s.62 and that breach was part of a process of misappropriation.
125 The Tribunal finds that subsequent to Probate being granted on 21 February 2000 certain monies were received into Trust and on 10 December 1999 there were disbursements from Trust of $5,000.00 noted to be to “V. Zusters” being Cheque number 401746. The cheque was in fact payable to the legal practitioner. The cheque was opened as cash by the legal practitioner and deposited on 10 December 1999 into his Office account number 12-8998 with Westpac.
126 Further the sum of $8,856.22 which was the proceeds of a Westpac bank account of the deceased, and was received on behalf of the Estate this sum was not recorded in the Trust account ledger for this client but was rather was recorded in the Trust account to the matter of Col Harris. Again a breach of s.62.
f) The Estate of Costica Grigorita
127 The Tribunal is satisfied there has been a clear breach of s.62 in that on 6 August 1999 cash in the sum of $6,000.00 was deposited into the Trust account and credited to the Trust ledger account of this Estate matter described as “by G. Nash – part costs”. This sum was not received from a G. Nash and there was no relationship between this Estate and a G. Nash.
128 Rather the position was one in which the $6,000.00 had been credited to the Trust ledger account of Mr. & Mrs. Ali described as a part deposit. That entry was ruled through and instead the amount was credited to the ledger relating to this Estate.
129 Further on 11 August 1999 two cheques totalling $65,000.00 were received from a broker in settlement of an insurance claim, one cheque in the sum of $32,500.00 was payable to the client and the other in the same amount payable to the Solicitor. These cheques were deposited into the Trust account and credited to the Estate ledger and incorrectly shown as being received from Curwood & Partners. Whilst other monies had in fact been received from Curwood & Partners those monies were never deposited into the Trust account. The misdescription of where the moneys came from again breached s.62.
130 On 11 August 1999 the balance in the St. George account, being a separate account conducted by the legal practitioner in the name of Ian Ritchie & Co was $51,825.23. That day a bank cheque was purchased in the sum of $50,000.00 and deposited to the credit of the Trust account and recorded as “By G. Nash – part settlement monies”. This payment did not reflect the true position. A further breach of s.62.
g) The matter of Gregory James Quinton and Sonja Marie Graham
131 The Tribunal finds a breach of s.62 has been made out and specifically on 3 June 1999 a cheque was drawn on the Trust account for the sum of $4,254.00 which was deposited that day into the legal practitioner’s General account. That cheque was allocated as costs due in various matters, of which $524.00 was shown in the cash book as relating to the matter of Quinton. The amount of $524.00 was posted out of date order in the Trust account ledger and dated 17 June 1999. Further the Trust Account statement prepared by the legal practitioner showed entries posted out of date order including the sum of $1,224.00 shown as being drawn on 15 June and $524.00 as shown as being drawn on 16 June 1999. In fact the $1,224.0 was drawn from the deposit held by the stakeholder on 15 April and that $524.00 (part of the cheque for $4,254.00) was drawn on 3 June 1999.
h) The matter of Kenneth Arthur Creed and Cheryl Julia Creed
132 The Tribunal finds that Kenneth and Cheryl Creed instructed the legal practitioner in respect of their purchase of property at Oakdale and finance of that purchase by way of a mortgage advanced from the Commonwealth Bank.
133 The Tribunal finds on 25 January 2000 the purchase was completed and the legal practitioner received the residue of the loan from the Commonwealth Bank in the sum of $17,944.88. That amount was deposited into the legal practitioner’s Trust account held in the name of the clients and the legal practitioner made entries in respect of the disbursement of that sum as:
134 The amount of the cheque for Stamp Duty was in fact $5,494.00 and in consequence the Trust ledger card incorrectly showed a nil balance when it should have indicated a credit of $500.00.
28 January 2000 OSR – Stamp Duty $ 5,994.00
20 January 2000 – K & C Creed money held $11,950.88
Total $17,944.88
135 Again this is a clear breach of s.62. However clearly in complete isolation, whilst it would constitute professional misconduct it would not in isolation be a coherent rationale for the legal practitioner being struck off.
i) The matter of Du Rieu Hotels Pty Ltd.
136 The Tribunal is satisfied that s.62 has been breached, as $6,894.00 was deposited to the credit of the legal practitioner’s Trust account however rather than the monies being paid into Trust on account of Stamp Duty for the Office of State Revenue which was the precise basis on which the client advanced the money to the legal practitioner, the legal practitioner created Trust ledger entries as follows:
137 Further the cheque drawn in the sum of $3,894.00 was never presented and the Trust ledger was not appropriately corrected.
3 June 1999 Ian Ritchie & Co Costs on Purchase $2,000.00.
23 July 1999 Ian Ritchie & Co Costs on Sale
and new purchase $1,000.00
13 October 1999 Office of State Revenue $3,894.00
j) The matter of Kate Cassie McMurray
138 The Tribunal is satisfied in relation to this purchase as at 31 January 2000 the sum of $33,076.07 was deposited to the credit of the legal practitioner’s Trust account in the name of his client.
139 The amount was dealt with in the Trust account as follows:
140 However at the time the receiver was appointed despite the Trust records demonstrating there was only a balance of $10.50 in Trust the fact was that there were cheques sitting on the file which had not been dispatched being:
31 January 2000 Ian Ritchie & Co – costs $ 1,200.00
3 February 2000 W. Zdanovig - Settlement moneys $30,060.97
3 February 2000 W. Player – Settlement moneys $ 1,088.00
3 February 2000 Blue Mountains City Council -
Rates/settlement moneys $ 656.30
3 February 2000 Sydney Water – Rates/settlement
moneys $ 60.30
3 February 2000 Balance in the trust account $ 10.50
$33,076.07
141 Clearly the Trust account ledger did not present the true position.
Trust cheque 401771 payable to
Blue Mountains City Council $656.30
Trust cheque 401772 payable to Sydney Water $ 66.30
142 The Tribunal is comfortably satisfied that the allegations dealing with Section 62 have been made out and in each instance the Legal Practitioner is guilty of professional misconduct. The Tribunal in considering the issues of wilful contravention relating to Section 61 and Section 62 of the Legal Profession Act is mindful that there have been numerous authoritative observations as to the proper construction of this term.
143 Important Authorities include:
144 Further Hardy J expounded his views again in Mayes case.
Re: Hodgkiss (1962) 62 SR (NSW) 340 where Hardie J said:-
“In the instant case the duty of the solicitor to his client is based upon a contractural and fiduciary relationship. Upon that relationship and duty the legislature has superimposed express statutory duties. Breaches of those duties are not made an offence punishable summarily, as are breaches of other sections of the Act. The sanction or penalty provided by the Act is the exposure of the solicitor concerned to the disciplinary and punitive powers of the Court and of the statutory committee in the event of the provisions being breached and such breach or breaches being wilful, and to the exercise by the institute of its powers to cancel or to refuse to renew the solicitor’s practising certificate whether – it would seem – the breaches be wilful or not.
The fact that the duties which form the subject matter of Section 42 are statutory does not render inappropriate or inapplicable the principles laid down in the cases already cited for the determination of the question as to whether there has been “wilful failure” on the part of the solicitor to comply with Section 41 or Section 42. Applying those principles, I am of the opinion that the Section deals with personal breaches of the statutory provisions in question on occasions when the solicitor knew or believed he was committing such breaches or was recklessly careless in that regard. It is thus essential in an enquiry as to whether there have been wilful breaches by a solicitor of the breaches of ss 41 and 42 to examine the facts and circumstances relevant to his state of mind, knowledge and intention at the material dates.”
145 It is necessary for the Tribunal to examine the facts and circumstances relevant to the practitioner’s state of mind, knowledge and intention of material dates.
“It is well settled law that there can be wilful failure within the meaning of the section without any positive intention to breach the law; breaches committed over a period of time can, in the light of the relevant circumstances, be so substantial and reckless and show such complete indifference on the part of the solicitor to his important obligations to his clients and to the public, as to amount to wilful failure.”
146 Here there Tribunal has no insight into the actual intention of the legal practitioner and rather has been left to review the actual conduct of the various matters.
147 The Tribunal is comfortably satisfied that there has been wilful failure in relation to Section 61 and Section 62 at least at the level that all the breaches were so substantial and reckless to show the legal practitioner’s complete indifference to his important obligations to his clients and to the public, in terms of Trust obligations. There has manifestly been a wilful failure.
148 Particulars of the allegations that the legal practitioner misappropriated Trust Funds involved a range of matters being:
a) Carl Nicholas Harris
149 The Tribunal finds that in acting pursuant to instructions from Elizabeth May Harris on behalf of her husband Carl Nicholas Harris incidental to the sale of a dental practice, the legal practitioner on 9 November 1999 drew a Trust Cheque payable to M.C. Harris in the sum of $1,000.00. The client has no knowledge of this amount, nor were the monies received by her husband who did not have a bank account at the time. Enquiries by the Receiver subsequently ascertained the Trust cheque drawn payable to P. Begg. This was a clear misappropriation of $10,000.00. The Tribunal accepts this submission.
150 Further the Tribunal finds on 24 November 1999 the client’s Trust ledger records identify a payment to C.N. Harris in the sum of $1,500.00. Again the client had no knowledge of this amount nor was the monies received by her husband who did not have a bank account. Further enquiries from the Receiver indicated the Trust cheque was drawn payable to the legal practitioner who deposited it into his General Account with Westpac.
151 The conduct of the legal practitioner on these two occasions is most damning and reprehensible. It falls well short of the standard of a professional practitioner and of itself save for the most exceptional circumstances would warrant the legal practitioner being struck from the Rolls. The Legal Practitioner is guilty of professional misconduct.
b) The Estate of the Late Harold Clement Williams
152 The Tribunal finds that on 23 September 1997 the legal practitioner prepared a final bill of costs totalling $19,508.65 and it was shown to have been paid to the extent of $19,506.64 with a balance of $2.01 remaining.
153 The total costs drawn by the legal practitioner amounted to $20,506.64.
154 The Law Society acknowledges it had no direct evidence as to the legal practitioner’s intent in relation to the taking of these monies. Clearly there is no evidence of restitution.
155 The Law Society relies upon in substance that the Tribunal is entitled to adopt the same reasoning as to what constitutes a “wilful” breach of s.61 which reaches out to conduct which is reckless to deal with issues of misappropriation. The Tribunal accepts this submission. There was a misappropriation of $1,000.00 The Legal Practitioner is guilty of professional misconduct.
c) The Estate of the Late Reinis Zusters
156 The retainer agreement in this matter is identified by reference to paragraphs 53 to 55.
157 The Tribunal finds that monies were received into Trust on 7 December 1999 in the sum of $9,200.00. On 10 December 1999 money was disbursed from Trust and the payee was nominated as V. Zusters. The nominated amount was $5,000.00.
158 In respect of this disbursement to V. Zusters the Tribunal finds that the cheque being Cheque Number 401746 was in fact drawn payable to the Legal Practitioner himself. The cheque was opened as cash by the Legal Practitioner and deposited on 10 December into his Office account with Westpac.
159 The Tribunal is satisfied there has been serious and deliberate misappropriation of Trust Funds.
d) The Estate of Costica Grigorita
160 The Tribunal finds that the Solicitor was instructed by Glen Nash to act in relation to the estate with Probate being granted on 4 December 1990. The estate had various assets and on 30 July 1999 the sum of $65,000.00 was received from Curwood & Partners as Solicitors for the insurer FAI. On 3 August 1999 without authority this sum was deposited by the legal practitioner in an account kept by him with the St. George Bank in the name of Ian Ritchie & Co. This was neither a Trust nor a controlled money account and certainly was not the Solicitor’s General Account.
161 Between 3 August 1999 and 11 August 1999 the legal practitioner made intermittent withdrawals totalling $13,406.05. The legal practitioner never accounted for that money to the client. There has been a clear and gross misappropriation. The Legal Practitioner is guilty of professional misconduct.
e) The matter of Russell John Kramer
162 The Tribunal finds that in this matter the legal practitioner was instructed on the sale of a property at Katoomba and on 23 December 1998 the 10% deposit was paid to the legal practitioner. That day this amount was deposited to the account kept by the legal practitioner with the St. George Bank No. 10038701. The account was styled Ian Ritchie & Co.
163 This is to be distinguished from the legal practitioner’s General account. The St. George account after the deposit of the $25,000.00 had a balance of $25,069.98. [A clear breach of s.61 as the monies were not held for the purpose for which they were received.]
164 Thereafter through to 12 March 1999 amounts were progressively drawn from the St. George account and as at 12 March 1999 the balance was $21,980.94.
165 On settlement on 5 March 1999 the sum of $225,098.25 was paid directly into the account of the client by the legal practitioner and on 12 March 1999 the legal practitioner paid direct into the bank account of the client the sum of $22,500.00. That payment was made by cheque drawn on the aforesaid St. George account in the sum of $21,900.00 and a cheque drawn on the legal practitioner’s General account, kept with Westpac in the sum of $600.00 to make up the balance.
166 Between 23 December 1998 and 12 March 1999 the Solicitor drew amounts totalling $3,019.06 from funds of the client held in the St. George account. Such monies were never accounted to the client and the Tribunal is comfortably satisfied that the monies were misappropriated by the legal practitioner.
167 Nor did the legal practitioner submit to the client a bill of costs. This is a most serious matter and the legal practitioner’s conduct is disgraceful. The Legal Practitioner is guilty of professional misconduct.
f) The matter of Du Rieu Hotels Pty. Ltd.
168 The legal practitioner clearly requested from his client monies for Stamp Duty by way of a cheque payable to the Office of State Revenue. That cheque was provided by the client in the sum of $6,894.00 payable to the Office of State Revenue.
169 It was deposited into Trust and at best a cheque was drawn for $3,894.00 payable to the Office of State Revenue.
170 The Tribunal accepts there was no basis that the legal practitioner was entitled to receive a further $3,000.00 from monies received from his client specifically for the purpose of payment of Stamp Duties. Such sum was clearly misappropriated. The Legal Practitioner is guilty of professional misconduct.
g) The matter of Kate Cassie McMurray
171 The Tribunal refers to the facts found in 19v and in relation to the legal practitioner’s dealing with the sum of $3,500.00 provided by the client, there clearly is a misappropriation and the Tribunal is satisfied to the requisite standard. The Legal Practitioner is guilty of professional misconduct.
172 Particulars of the allegation that the legal practitioner grossly overcharged involve a range of matters being:
a) Acting on behalf of Deidre Jayne Hockley
173 In the Hockley matter the Tribunal finds the legal practitioner even after allowing for a refund of $1,000.00 drew professional costs of $2,500.00. These costs were characterised by the Law Society as grossly excessive. It was clearly a purchase of property with a consideration of $105,000.00.
174 There was no evidence as to whether there was or was not a fee agreement in place.
175 Mr. Boyd sought to persuade the Tribunal that an inference could be drawn that the fee was grossly excessive by reference to other conveyancing matters that formed part of the particulars of various other grounds of alleged professional misconduct. The fees referred to are certainly of a lower order. Who is to say the legal practitioner was not undercharging for the other matters to which the Tribunal was referred.
176 The Tribunal was further invited to take judicial notice of the circumstances and make a finding that the fee was grossly excessive.
177 Having regard to the onus of proof and the standard of proof the Tribunal is not prepared to draw an inference from the other transactions referred to nor is it prepared to exercise judicial notice.
178 What may or may not have been excessive fees in particular circumstances in 1999 is a matter for clear evidence including evidence as to the conduct of the transaction as a whole and whether there was or was not a fee agreement. This particular is not made out and has not been established.
b) The Estate of the Late Edna Joyce Devenish
179 The Tribunal refers to the earlier findings of fact.
180 The allegation in substance was that in total the legal practitioner claimed total professional costs of $25,000.00. The Tribunal finds this amount was paid to the legal practitioner.
181 Costs were paid to a former solicitor for carrying out work in relation to the Estate in the sum of $10,349.00.
182 The matter clearly had its complexities and such complexities included:
183 Clearly there was a potential for litigation.
i) The interpretation of the Will which was the subject of an opinion by Counsel, as instructed by the former solicitor;
ii) Considering Counsel’s advice relevant to the construction of the Will and dealing with the beneficiaries in terms of and appropriate cover letter and a Deed.
184 Further the Tribunal cannot form the view as to how much work needed to be undertaken by the legal practitioner in reviewing the file once it had been taken over from the former solicitor.
185 Mr. Boyd sought to tender a letter from Cost Plus of 3 September 2001 prepared by a Mr. Ross Nicholas.
186 The Tribunal rejected the tender of that letter and did so on the grounds of
187 On the evidence before the Tribunal and again having regard to issues as to available evidence, onus of proof and standard of proof the Tribunal is not prepared to make a finding of overcharging.
i) The letter had never been served upon the legal practitioner.
ii) Whilst it purported to be expert evidence as to a costs assessment it was not in affidavit form.
iii) On its face the document did not contain sufficient particulars to demonstrate that the author of the document was an expert.
188 Nor is the Tribunal on the available evidence prepared to find the legal practitioner charged costs for work which had never been performed.
c) The Estate of Costica Grigorita
189 In the matter of Grigorita whilst there was an allegation of overcharging in the course of the proceedings Mr. Boyd advised the Tribunal he did not press this allegation and accordingly leave is granted to amend the Information to delete the allegation of charging grossly excessive costs in relation to the Estate of Grigorita.
d) De Rieu Hotels Pty. Ltd
190 The Tribunal finds in this matter De Rieu Hotels Pty. Ltd. instructed the legal practitioner on the purchase of a property at Emu Plains.
191 On 18 May 1999 the legal practitioner requested cheques of $235,125.37 which included Solicitors costs totalling $750.00 together with a cheque for Stamp Duty for $6,894.00. Further that the legal practitioner deposited a cheque from the client payable to the Office of State Revenue for $6,894.00 into his Trust Account on 3 June 1999 with Trust ledger entries as follows:
192 There were no instructions to act on behalf of any sale at all and there was only the single purchase.
i) 3 June 1999 Ian Ritchie & Co. Costs on Purchase $2,000.00
ii) 23 July 1999 Ian Ritchie & Co. Costs on Sale and new purchase.
iii) 13 October 1999 Office of State Revenue $3,894.00
193 Clearly a sum of money had been requisitioned for Stamp Duty in the sum of $6,894.00 and clearly the client made such a payment to the legal practitioner however the legal practitioner made entries in his Trust account ledger which misdescribed the basis of the receipt of the money.
194 Further the records clearly show that a cheque in the sum of $6,894.00 was drawn payable to the Office of State Revenue on 3 June 1999 and Trust cheques drawn thereafter were
195 The cheque for $3,894.00 was never presented. The Tribunal is satisfied that there has been a misappropriation of the sum of $3,000.00.
23 July 1999 Ian Ritchie & Co costs on purchase $2,000.00
23 July 1999 Ian Ritchie & Co costs on sale
and new purchase $1,000.00
13 October 1999 Office of State Revenue $3,894.00
196 In relation to these findings of fact it is put that the legal practitioner charged grossly excessive costs and it is further put that the legal practitioner misappropriated the sum of $3,000.00.
197 In this matter the Tribunal is comfortably satisfied that there has been a gross overcharging and on the same facts a misappropriation. It is again professional misconduct by the Legal Practitioner.
198 The Tribunal on the basis of the aforesaid authorities in the context of a Solicitor’s duty is also comfortably satisfied that when considering misappropriation the Tribunal does not need to satisfy itself that the actions in each and every circumstances has been a deliberate and calculated step rather it is sufficient that the legal practitioner is recklessly careless whether he has breached the relevant duty and again reference is made to the authorities cited herein.
199 Turning to the orders sought by the Law Society the Tribunal is satisfied that the legal practitioner’s name should be removed from the Roll of Solicitors. The behaviour of the legal practitioner in numerous instances fell well short of the requisite standard.
200 The acts of misappropriation were in many instances calculated to deceive and the flagrant breaches of Section 61 and Section 62 demand in the public interest that the legal practitioner’s name should be removed from the Roll of Legal Practitioners.
201 As to costs, the Law Society is entitled to a Costs Order however having regard to the necessity to adjourn the proceedings on the initial hearing date, arising out of the state of preparation of the Law Society case and steps taken to effect service, the Tribunal orders:
a) The Law Society shall have no costs in relation to the preparation of any affidavit material filed with the Tribunal on 2 December 2003.
b) The Law Society shall have no costs including disbursements of taking any of the steps in accordance with the directions issues by the Tribunal on 2 December 2003.
Revised 25 August 2004 – Order 1 and paragraph 200 amended by replacing “Roll of Solicitors” with “Roll of Legal Practitioners”
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