Law Society of New South Wales v Vardas
[2006] NSWADT 118
•04/21/2006
CITATION: Law Society of New South Wales v Vardas [2006] NSWADT 118 DIVISION: Legal Services Division PARTIES: APPLICANT
Council of the Law Society of New South Wales
RESPONDENT
George John VardasFILE NUMBER: 052011 HEARING DATES: 18/08/05
05/12/05SUBMISSIONS CLOSED: 12/05/2005
DATE OF DECISION:
04/21/2006BEFORE: Karpin A - ADCJ (Deputy President); Pheils J - Judicial Member; Bennett C - Non Judicial Member CATCHWORDS: Professional Misconduct - breach of s. 61 of the Legal Profession Act - Professional Misconduct - breach of s. 62 of the Legal Profession Act - Professional Misconduct - forging signatures - Professional Misconduct - misappropriate trust moneys/moneys - Professional Misconduct - mislead receiver MATTER FOR DECISION: Principal matter LEGISLATION CITED: Legal Profession Act 1987 CASES CITED: Briginshaw v. Briginshaw (1938) 60 CLR 336 REPRESENTATION: APPLICANT
RESPONDENT
L Pierotti, solicitor
J W Conomos QCORDERS: 1. The name of the Respondent, George John Vardas be removed from the Roll of Legal Practitioners ; 2. That the Respondent pay the costs of the Applicant Law Society of New South Wales, of and incidental to the proceedings before the Tribunal.
REASONS FOR DECISIONInformation
1 By information filed 12 May 2005 the Council of the Law Society of New South Wales, following the Council’s investigation of complaints made under Part 10 of the Legal Profession Act 1987, alleges that George John Vardas is guilty of professional misconduct on the following grounds:
Background
(i) The respondent wilfully breached section 61 of the Legal ProfessionAct 1987.
(ii) The respondent wilfully breached section 62 of the Legal ProfessionAct 1987.
(iii) The respondent misappropriated trust monies.
(iv) The respondent forged the signature of Mr. K. Mahon.
(v) The solicitor misled a Trust Account Inspector.
2 The respondent was admitted to practise as a solicitor on 19 December 1979.
3 On 11 December 2003 the Council of the Law Society of NSW resolved to cancel the respondent’s Practising Certificate, he then practising as a sole practitioner under the name Messrs Gunn Hamilton & Blay.
4 On 12 December 2003 the Supreme Court of New South Wales appointed Miss Jean Sayer, Chartered Accountant, as Receiver of the trust property of the respondent. On the same date the Court stayed the cancellation of the respondent’s Practising Certificate.
5 On 29 July 2004 the Council of the Law Society of NSW cancelled the respondent’s Practising Certificate and refused his application for a Practising Certificate for the year ending 30 June 2005.
6 At hearing the Informant relied upon the Information; the affidavit of Raymond John Collins, sworn 9 May 2005 [Collins]; the affidavit of Jean Sayer sworn 5 May 2005 [Sayer], all of which were filed on 12 May 2005. The informant also relied upon written submissions filed in the Tribunal.
7 The respondent did not file a Reply. Mr. JW Conomos QC appeared for the respondent on 18 August and 5 December 2005 when the matter was before the Tribunal. From the outset, counsel for the respondent indicated to the Tribunal that the orders sought by the Informant were not opposed. There was, however, opposition to the application by Robert Coshott to be joined with a view to obtaining an order for compensation. On 5 December 2005, the Tribunal delivered an ex tempore decision refusing the Coshott application.
Orders Sought
8 The Informant seeks orders that:
9 The material in evidence before the Tribunal was voluminous involving a complex “paper trail” through the affidavits of the witnesses for the Informant. The Tribunal appreciates the careful submissions prepared by the Informant to assist the Tribunal in following the respondent’s convoluted dealings with Trust account transactions.
i. The name of the Legal Practitioner be removed from the Roll of Legal Practitioners;
ii The Legal Practitioner pay the costs of the Society of and incidental to the proceedings before the Tribunal.
Particulars of Grounds of Complaint
10 In these Particulars
11 Nenad Milutinovic
“the Solicitor” means George John Vardas.
“the Receiver” means Miss Jean Sayer.
“Mr Milutinovic” means Mr Nenad Milutinovic
“AGS” means the Australian Government Solicitor
“Mr Christofi” means Chris Christofi
“Alexus” means Alexus Pty Limited
“Pavlakos” means Constantine and Evriklia Litsa Pavlakos.
“Mr Pavlakos” means Constantine Pavlakos.
“Mr Jankovic” means Dusan Jankovic
“Mr McMahon” means Mr Kenneth D’Arcy McMahon
12
(a) Mr Milutinovic was initially a client of Mr R G Coshott, a former Solicitor.
(b) Mr Milutinovic’s personal injuries matter was taken over by Mr Vardas on or about 1 May 1992 when costs due to Mr Coshott were $4,670.45.
(c) Mr Milutinovic failed in his claim and costs were awarded against him amounting to $21,106.08.
(d) On 25 April 1997 the Solicitor rendered a solicitor/client bill to Mr Milutinovic in the sum of $16,590.71. The sum of $16,590.71included costs due to Mr Coshott amounting to $4,670.45 and Counsel’s fees $6,300.00 due to Mr P Stone.
(e) The Solicitor received from Mr Milutinovic the sum of $14,000.00 in full payment of his account.
(f) The Solicitor did not pay Counsel’s fees nor did he account to Mr Coshott for the amount recovered which was due to him.
(g) The Solicitor swore an Affidavit on 17 December 2003 in which he deposed, inter alia, “Nor did I pay the amount owing to Coshott as I treated the amount shown for Coshott’s outstanding costs as offsetting costs in the numerous matters in which I was then engaged on Coshott’s behalf and for which I remained unpaid.”
(h) On 9 February 1998 the Solicitor wrote to the AGS, acting for the Defendant, enquiring whether the Commonwealth would, in light of Mr Milutinovic’s financial position, accept payment of its costs by instalments or, alternatively, a reduced lump sum amount.
(i) By letter dated 4 June 1998 the AGS requested a full statement of the financial circumstances of Mr Milutinovic.
(j) By letter dated 6 August 1998 the Solicitor wrote to the AGS therein setting out details of Mr Milutinovic’s financial position and offering $8,000.00 in full settlement of the Commonwealth’s costs.
(k) The Solicitor’s offer of 6 August 1998 having been rejected, the Solicitor again wrote to the AGS by letter dated 25 August 1999 offering payment of $11,000 by way of two instalments. That offer was rejected by letter from the AGS dated 24 March 2000.
(l) By letter dated 20 April 2000 the Solicitor confirmed a further offer of $17,000, payable within 14 days, by which to finalise the Commonwealth’s claim for costs against Mr Milutinovic. This offer was accepted by letter from the AGS dated 27 April 2000.
(m) Mr Milutinovic had, on 20 November 1998, forwarded the sum of $21,000.00 to the Solicitor for payment of the Commonwealth’s costs and same had been banked to the credit of the Solicitor’s Trust Account and credited to a trust ledger account styled - R G Coshott – Miscellaneous matters.
(n) On 24 November 1998 $21,000.00 was transferred by journal entry to the account of Coshott re Mak and covered a cheque drawn on that day payable to Mr P Biscoe QC for $21,000.00.
(o) On 17 May 2000 the Solicitor deposited to the Trust Account the sum of $10,000 and credited same to the Trust Account ledger of Mr Milutinovic. This sum covered a Trust Account cheque dated 18 May 2000 drawn and made payable to the Commonwealth of Australia for $10,000.00 in part payment of the agreed sum of $17,000.
(p) On 25 May 2000 the AGS wrote to the Solicitor to the effect that it would issue proceedings for recovery of the balance of costs.
(q) On 5 June 2000 the Solicitor forwarded the balance of $7,000.00 to the AGS. This sum was made up as to $2,500.00 by a bank cheque issued by Colonial State Bank and as to $4,500.00 by a bank cheque issued by the Commonwealth Bank. Both cheques were purchased by the Solicitor on credit cards.
(r) In a letter dated 10 December 2003 from the Solicitor to the Society he advised that the Commonwealth did not pursue payment until some time after the completion of the matter and that he eventually negotiated the payment of $17,000.00, which he paid out of his own monies.
(s) The payment to the AGS at least to the extent of $7,221.00, may have been funded from trust monies received on behalf of Chris Christofi.
(t) By letter dated 17 December 2003 the Solicitor forwarded to Mr Milutinovic a cheque for $8,586.85, representing repayment of $4,000.00 plus interest. The Solicitor also forwarded to Mr Stone, through the Bar Association, a cheque in the sum of $6,300.00 which was presented against his office account on 25 February 2004.
Chris Christofi
13 Alexus Pty Limited
(a) The Solicitor acted for Mr Christofi in a personal injury claim settled by consent in the District Court on 24 February 2000 for $112,000.00 with the Plaintiff and Defendant to pay their own costs. Mr Christofi acknowledged that costs of $25,000.00 would be deducted and there would be an estimated Social Security payback of $10,000.00.
(b) Mr Christofi also acknowledged that 10% of the settlement would be paid to Medicare.
(c) Settlement moneys totalling $112,000.00 were received by the Solicitor on 10 March 2000 and deposited into the Trust Account [to the trust ledger account of Mr Christofi].
(d) On 17 March 2000 the Solicitor drew from Mr Christofi’s trust moneys the sum of $18,740.00 described as part payment of costs.
(e) The Solicitor wrote to the Department of Social Security on 7 March 2000 enquiring as to the amount repayable to the Department. This enquiry resulted telephone advice on 5 April 2000 indicating that Social Security payback would be $7,221.00.
(f) A Trust Account statement dated 12 April 2000 shows receipt of settlement monies of $112,000.00 and a payment from Mr Christofi for disbursements of $1,703.00 disbursed as follows:
(g) Cheques totalling $80,039.00 as directed by Mr Christofi were drawn on the Trust Account on 13 April 2000.
Department of Social Security – liability $ 7,221.00
Costs and disbursements $ 26,443.00
Balance to Mr Christofi $ 80,039.00
$113,703.00
(h) On 15 May 2000 a cheque in the sum of $13,221.00 was drawn on the trust funds of Mr Christofi [representing the moneys due to the Department of Social Security and the balance of the Solicitor’s costs] and same was paid to ANZ (Gunn Hamilton & Blay, General Account).
(i) On 17 April 2001 the Solicitor wrote to the Compensation Recovery Section of Centrelink and sought advice as to payment which should be made to it.
(j) By facsimile transmission of 19 April 2001 Centrelink advised that the amount outstanding to it was $10,257.69.
(k) By letter dated 19 April 2001 the Solicitor forwarded to Centrelink the sum of $7,221.00, being the amount he indicated was retained in the Trust Account, and made submissions as to why the balance said to be due should be waived.
(l) The cheque to Centrelink in the sum of $7,221.00 on behalf of Mr Christofi had been covered by a journal transfer of this amount on 16 January 2001 from the trust ledger account of Alexus Pty Limited v Pont Holdings.
(m) The misappropriation of $7,221.00 was concealed by the Trust Account statement in the file.
14
(a) The Solicitor acted for Alexus in litigation against Pont Holdings Pty Limited. The Solicitor also acted for Alexus in a professional negligence claim against Andresakis & Associates, Alexus’ former Solicitors and in respect of the same matter.
(b) The proceedings against Pont Holdings Pty Limited were concluded on 4 January 2001 by virtue of the sale of a property at 3/10 St. Georges Crescent, Drummoyne.
(c) On 23 December 2000 the Solicitor issued a Trust Account statement accounting for monies received between June and December 2000 totalling $36,168.00. As against that credit, bills rendered by Messrs Gunn Hamilton & Blay between 8 May 2000 and 19 December 2000 together with costs and disbursements payable to Mavrakis & Associates ( Alexus’ former solicitors) totalled $50,444.00 – thus resulting in a balance payable by Alexus to the Solicitor of a sum of $14,276.00.
(d) On settlement of the sale of the property at 3/10 St. Georges Crescent, Drummoyne two cheques, one for $14,816.84 and a further cheque for $25,000.00, were credited to the trust ledger account of Alexus. The sum of $14,816.84 was said to cover costs of the Supreme Court litigation of $12,075.00 and conveyancing costs of $2,741.84.
(e) In a letter dated 26 December 2000 to the National Bank, the Solicitor indicated that the vendor’s agent’s commission was $25,000.00 and would be retained in the Trust Account pending resolution of a dispute concerning it.
(f) The amount of $25,000 was not retained in trust. On 16 January 2001 $7,221.00 was transferred from Alexus’ Trust Account ledger to that of Mr Christofi described as reimbursement of Trust Account ledger for monies incorrectly debited. This sum represented a repayment to the trust ledger of Mr Christofi of funds previously misappropriated. Costs and disbursements were drawn and the balance paid to the company.
(g) After all matters had been concluded the Solicitor issued a Trust Account statement dated 11 July 2002 showing an amount of $5,000.00 being retained in the Trust Account.
(h) The sum of $7,197.60 remained unaccounted for to Alexus and was made up as follows:
Amount to be retained 5,000.00
Disbursements not able to be verified as paid 438.68
Less amount paid not billed – Hunt & Hunt (761.75)
Duplication of costs sale of St Georges Crescent property 3,135.45
Duplication of payment to Mr Moore included in bill 300.00
Duplication of filing fee 388.00
Less amount held in Trust Account (1,302.78)
$7,197.60
Pavlakos
15 Mr Pavlakos – lease to Tovesoul Pty Limited
Pavlakos lease to Stacey and Hollis
Pavlakos – lease to Derek Joe
Pavlakos – lease to Lupton & Simpson
(a) The Solicitor acted for Pavlakos on a lease to S Stacey and J Hollis of premises at 83 Graham Road, Narwee.
(b) On 20 May 1997 the lease was returned by the Solicitor for the lessees together with the sum of $811.00 made up of costs of $600.00, estimated stamp duty of $120.00 and registration fees of $53.00.
(c) On 28 January 1998 the Solicitor withdrew from the Trust Account the sum of $600.00 representing profit costs on the lease.
(d) The executed lease was forwarded to Pavlakos on 23 May 1997 with a request for its return for stamping and registration.
(e) The lease was not stamped or registered nor was the consent of the mortgagee obtained.
(f) On 26 September 1997 a Caveat was lodged by the solicitors for Stacey and Hollis with respect to the lease.
(g) The lessees sold their business and Mr Pavlakos said he would consent to the transfer of the lease to the purchaser, Mr Derek Joe. Mr Joe’s solicitor was informed that the original lease had been lost.
(h) On 14 September 1999 the Solicitor informed Mr Joe’s solicitor, “… we propose to charge … $100.00 for administration and Law Stationer’s fees. The stamp duty and registration fees will be applied from the moneys paid by the outgoing tenants for the stamping of the Lease.”.
(i) On 14 September 1999 the Solicitor requested a withdrawal of the Caveat and forwarded to the Solicitors for Stacey and Hollis a cheque in the sum of $55.00 being for registration of the withdrawal of Caveat. The Caveat was not withdrawn.
(j) The lease from Pavlakos to Mr Joe was retained in the Solicitor’s file and was not stamped or registered.
(k) Mr Joe sold his business to Lupton and Simpson.
(l) On 28 November 2000 the Solicitor forwarded to the Solicitors for Lupton and Simpson a lease together with his bill [$1,107.50] made up of costs $880.00 and disbursements of $223.00 - including stamp duty of $120.00 and registration fee of $58.00.
(m) The executed lease was returned by the Solicitors for Lupton and Simpson under cover of their letter of 1 February 2001.
(n) The lease was not stamped or registered.
16
(a) The Solicitor acted for Mr Pavlakos on the lease to Toveoul Pty. Limited of 502 Forrest Road, Bexley.
(b) On 11 December 1998 the Solicitor forwarded the lease to Mr Tyler, Solicitor for the lessee, together with a bill for $1,219.00 and which sum included profit costs of $750.00, stamp duty of $360.00, registration fee of $56.00, Law Stationer’s fee of $28.00 and sundries of $25.00.
(c) On 22 December 1998 the executed lease was returned together with a cheque in the sum of $1,219.00 and which cheque was deposited into the Solicitor’s Trust Account. On the same day the lease was forwarded to Mr Pavlakos for execution.
(d) The executed lease was returned to the Solicitor but was not stamped or registered. The lease was retained in the Solicitor’s file.
(e) On 14 January 1999 the sum of $775.00 was drawn by the Solicitor from the Trust Account [representing profit costs of $750.00 and sundries of $25.00]. The balance of $444.00 remained in the Trust Account.
(f) Although the property the subject of the lease is the subject of a mortgage registered on 26 March 1990, the Solicitor’s file does not disclose any reference to the lease being forwarded to the mortgagee for consent.
Dusan Jankovic
(a) The Solicitor acted for Mr Jankovic on a personal injury claim arising from a motor vehicle accident on 18 April 1986.
(b) The Solicitor had assumed conduct of the matter from Mr Coshott in 1991.
(c) Mr Jankovic had returned to Yugoslavia – the accident occurring during his visit to Australia. The Solicitor wrote to Mr Jankovic in Yugoslavia on 5 August 1991 informing him that he had taken over the matter and that he was required to travel back to Australia to be medically examined and to give evidence. Failing that, the Solicitor advised Mr Jankovic to terminate the proceedings.
(d) On 23 May 1995 the Solicitor confirmed a discussion with Mr Jankovic to the effect that Mr Jankovic’s former Solicitor, Mr Coshott, was to be paid outstanding costs and disbursements out of any settlement or verdict.
(e) The proceedings were finalised on 25 May 1995 with a verdict for $16,113.42 [plus party/party costs which were agreed at $6,500.00] in favour of Mr Jankovic. The net amount of verdict moneys totalling $16,207.52 was received from the GIO by The Solicitor on 21 June 1995 and deposited into the Trust Account.
(f) Although party/party costs were not received until 18 July 1995 the Solicitor prepared a Trust Account statement [dated 11 July 1995] accounting for $22,707.52 disbursed as follows:
(g) Cheques were drawn as follows:
Dr L Hodoba 252.00
X-Ray and Ultrasound 196.50
Camperdown CT 255.00
Rockdale X-Ray and Ultrasound 409.92
R G Coshott 2,934.57
Gunn Hamilton & Blay – legal costs 7,048.00
Bank cheque fee 5.00
Balance 11,606.53
$22,707.52
(h) On 18 July 1995 party/party costs in the sum of $6,500.00 were received from the GIO and deposited to the Solicitor’s Trust Account. From this sum cheques were drawn as follows:
12.7.95 Mr D Jankovic 11,606.00
12.7.95 Mr D Jankovic refund amount
paid by him to Camperdown CT 255.00
17.7.95 Gunn Hamilton & Blay – part legal costs 4,346.52
$16,207.52
(i) By bill dated 11 July 1995 profit costs were assessed at $4,500.00 and disbursements at $2,548.00 [totalling $7,048.00].
19.7.95 X-Ray and Ultrasound 196.50
19.7.95 Rockdale X-Ray/Ultrasound and CT 409.92
19.7.95 Interpreter’s Network 320.00
19.7.95 Dr L Hodoba 452.00
20.7.95 C Stomo 1,500.00
18.8.95 Gunn Hamilton & Blay – balance legal costs 3,621.58
$6,500.00
(j) The amounts drawn by Mr Vardas exceeded the amount due to him by the sum of $3,020.10.
(k) The Trust Account statement dated 11 July 1995 showed $2,934.57 as having been paid to Mr Coshott. This sum was in fact drawn by the Solicitor and not paid to Mr Coshott.
17
(l) On 11 October 1995Mr Jankovic applied for an assessment of costs. He objected to the sum of $2,934.57 being paid to Mr Coshott and to the charge by the Solicitor of $7,048.00 for legal costs.
(m) The Solicitor responded in a letter to the Registrar of the Court on 2 November 1995 and on the same day deposited the sum of $2,934.57 to his Trust Account and credited to the trust ledger account of Mr Jankovic. Also, on 2 November 1995 a cheque was drawn payable to Mr Coshott in the sum of $2,934.57 and in relation to his costs.
(n) On 7 November 1995 the Assessor wrote to the Solicitor requesting further particulars in respect of Mr Coshott’s costs, in particular, as to when payment had been made and to whom was such payment made. On 10 November 1995 the Solicitor responded advising that costs had been paid “…following finalisation of the matter…”.
(o) On 19 December 1995 the Assessor determined the Solicitor’s costs in the sum of $7,048.00.
(p) Contrary to the Trust Account statement, the Solicitor did not pay Mr Coshott in July 1995 on completion of the matter. He had drawn amounts in excess of his costs which absorbed the amount due to Mr Coshott. It was not until Mr Jankovic disputed the costs and wrote to the Supreme Court on 11 October 1995 that the Solicitor reimbursed the monies that he had drawn back into the Trust Account and paid Mr Coshott.
The Estate Late D’Arcy Terrence McMahon
18
(a) The Solicitor acted for Mr McMahon in obtaining a grant of Probate in the Estate of the Late D’Arcy Terrence McMahon who had passed away between 23 and 26 October 1998.
(b) Probate was granted on 14 January 1999.
(c) The assets of the Estate included a property at 31 Marine Drive, Oatley as well as other assets estimated at $42,228.90.
(d) The property at 31 Marine Drive, Oatley was sold for $455,000.00 and the sale thereof was settled on 13 July 1999 when the balance of the purchase moneys, amounting to $409,425.89, were deposited to a controlled money account with the St George Bank. The deposit, less Agent’s commission was sent directly to Mr McMahon.
(e) The proceeds of all other bank accounts were deposited into the Solicitor’s Trust Account.
(f) On 21 October 1999 the balance in the controlled money account with the St George Bank [ $411,488.15 ] was withdrawn and deposited into the Solicitor’s Trust Account.
(g) All assets of the estate were realised by 22 October 1999.
(h) The Solicitor prepared a document headed “ Estate Reconciliation Statement”. In that Statement the Solicitor failed to bring into account interest on the St George Bank account in the sum of $2,062.26 and further duplicated a filing fee of $850.00 [total $2,912.26]. From the sum of $2,912.26 the Solicitor drew a cheque [on 5 November 1999] in the sum of $2,255.36 and payable to the Commonwealth Bank.
(i) On 14 May 2001 the Solicitor wrote a letter to Mr McMahon referring to a recent Trust Account inspection and indicating his recollection that the $2,255.36 paid to the Commonwealth Bank was done so at Mr McMahon’s request in reimbursement of an initial advance made by the bank to Mr McMahon on the death of his father to cover expenses in travelling to Sydney and arranging the funeral. The Solicitor requested that Mr McMahon confirm those instructions by signing and returning an enclosed letter.
(j) At the foot of the second page of the letter on 14 May 2001 there is a note, “I confirm the above instructions” which is signed “K McMahon”.
(k) The Solicitor had written to the Law Society on 16 May 2001 saying that he recalled that the Executor, Mr McMahon, had obtained an advance from the bank, that he had been instructed to repay that sum and that he would forward a copy of Mr McMahon’s signed acknowledgement when it came to hand.
(l) The letter of 14 May 2001 was provided to the Society by the Solicitor in response to a request by a Trust Account Inspector on 28 August 2000.
(m) In a letter to the Receiver dated 24 June 2004, Mr McMahon advised that the signature on the letter of 14 May 2001 is not his signature and that he did not receive the letter of 14 May 2001. Further, he did not arrange a loan with a bank and he had no knowledge of the amount of $2,255.36.
(n) In a further letter dated 23 July 2004, Mr McMahon confirmed that:
(i)He did not receive from the Solicitor a letter dated 14 May 2001 concerning the sum of $2,255.36.
(ii) He did not obtain an advance from the Commonwealth Bank to cover expenses for travelling to Sydney in respect of the Estate.
(iii) At no time did he request the sum of $2,255.36 to be paid to him in reimbursement of an advance made by the bank.
Estate Late Jane Frances Imbruglia
19
(a) Ms Jane Frances Imbruglia died on 5 October 2000.
(b) The Solicitor acted for the Executrix of the Estate Catherine Mary Bellamy in obtaining a Grant of Probate and in administering the Estate.
(c) Probate was granted on 29 January 2001.
(d) The Estate was comprised of a property at 33 Rosalind Street, Cammeray ($700,000.00), a one quarter interest in a property at 88 Beaconsfield Road, Chatswood ($165,000.00), balances in accounts with St George Bank and Commonwealth Bank and an investment in Westpac ($24,000.00).
(e) The Estate was bequeathed as to one-third to the son of the deceased, Damien Imbruglia [to be held by his Guardian], Gabrielle Auld (nee Imbruglia) and two-ninths share each to the three daughters of the deceased, Catherine Bellamy, Gaby Auld and Liza Imbruglia.
(f) The property at 33 Rosalind Street, Cammeray was sold on or about 5 June 2001 and the balance of purchase moneys of $706,395.34 together with the balance of the deposit of $63,116.32 were deposited into an account maintained by the Solicitor for the Estate with the St. George Bank.
(g) Interim distributions were made to the beneficiaries on 13 March 2001, 9 July 2001 and a final distribution was made on 6 September 2001.
(h) The Solicitor’s costs amounted to $10,262.63.
(i) On 12 April 2001 $5,996.05 costs in respect of obtaining the Grant of Probate were drawn.
(j) On 6 September 2001 $6,526.51 costs in respect of the sale of the property and administration were drawn. This sum exceeded by $2,259.93 the costs referred to in the statement issued to the Executrix. The excess of $2,259.93 absorbed the net interest earned on the controlled money account of the Estate not brought to account in the statement of monies received and drawn.
(k) A bill of costs for $1,866.58 rendered by the Solicitor on the sale of the Cammeray property included a disbursement of $407.00 for a survey report. This amount was paid from trust and included in the statement of Trust Account monies and therefore was a duplication when included in the bill.
(l) Pursuant to the Will, Mrs Gabrielle Auld had the right to buy the one-quarter share of the interest in 88 Beaconsfield Road, Chatswood at a price equal to one-half of the value determined by two independent valuers. This she did for a sum of $76,250.00 which sum was deducted from her share in the distribution of the Estate.
(m) The title to the property does not record any dealings since 19 June 1996 and thus the Solicitor did not attend to the transfer to Mrs Auld of the one quarter share she purchased.
Peter and Nick Diakonikolis
20
(a) The Solicitor acted for Peter & Nick Diakonikolis on the lease of 109 Yangoora Road, Lakemba to El Saddik and 107 Yangoora Road, Lakemba to Saleh Kahil.
(b) In respect of the lease to Kahil, the Solicitor rendered a bill for costs and disbursements dated 16 December 1998 and in the sum of $1,109.00. This sum included stamp duty estimated at $305 and registration fees of $56.00.
(c) On 7 April 1999 a cheque in the amount of $1,109.00 from Paragon Solicitors, acting for the lessee, was banked into the Solicitor’s Trust Account.
(d) On 26 July 1999 the lease was forwarded to Mr Diakonikolis for execution and return for stamping.
(e) On or about 28 July 2000 stamp duty was paid but there is no indication that the lease was registered.
(f) Mr Kahil was to sell his business to Mr Baghdadi and on 13 February 2001the Solicitor was advised of this fact by Messrs Naef & Associates, Solicitors [for Mr Kahil] who also sought the lessor’s consent to the transfer of the lease. That consent was given.
(g) The Solicitor rendered a bill to Mr Kahil dated 16 March 2001 and in the sum of $586.00.
(h) The Solicitor did not register the leases to either Mr Kahil or Mr Baghdadi.
(i) In relation to the lease to El Saddik, a bill was rendered on or about 16 December 1998 and in the sum of $1,124.00. This sum included estimated stamp duty of $320.00 and registration fees of $56.00
(j) The amount of $1,124.00 was received from the Solicitors for the lessee and deposited into the Solicitor’s Trust Account on 5 September 2000.
(k) After profit costs of $700.00 were drawn on 22 February 2002 there remained the sum of $530.70 in the Trust Account and which sum remained in the Trust Account at the date of the appointment of the Receiver.
(l) There is no evidence of the stamping or registration of the lease to El Saddik.
Franalex Pty Limited Lease to Mayne Group Limited
21
(a) The Solicitor’s firm acted for the lessor, Franalex Pty. Limited, in respect of three leases – one of premises in Kitchener Parade, Bankstown and two in Miranda [one in Urunga Parade and one in Gibb Street] to Mayne Group Limited. Mr Steven Fuller had the conduct of the matter.
(b) On 26 July 2002 a bill of costs was issued to Mayne Group Limited and in the sum of `$5,059.50. The bill included stamp duty totalling $2,289.00 and registration fees of $180.00.
(c) The sum of $5,059.50 was received from the lessee and deposited into the Solicitor’s Trust Account on 14 October 2002.
(d) The stamped lease for the Bankstown property remained in the file and was not registered.
(e) With respect to the lease of the Urunga Parade, Miranda premises, the costs and disbursements in relation to this lease were included in the bill to Mayne Group Limited.
(f) The lease was not stamped or registered.
(g) With respect to the lease of the Gibbs Street, Miranda premises, the costs and disbursements in relation to this lease were included in the bill to Mayne Group Limited.
(h) The lease has not been stamped or registered.
(i) A bill dated 22 May 2003 and in the sum of $1,859.00 was issued for additional costs and disbursements for the Urunga Parade property and on 19 August 2003 a bill in the sum of $442.20 was issued for additional costs and disbursements for the Gibbs Street, Miranda lease. On 26 September 2003 and 30 October 2003 respectively, cheques for $1,859.00 and $442.20 were deposited into the Solicitor’s general account.
Estate Late Charles Alexander
22
(a) The Solicitor acted for Mr Charles James Abbott Alexander (known as Jim Alexander) on a Grant of Probate of the Estate of the Charles Alexander who had passed away in February 1998.
(b) Probate was granted on 14 July 1998.
(c) The assets of the Estate according to the inventory totalled $513,602.26.
(d) Mr Jim Alexander entered into a Deed of Family Arrangement to enable his sister to receive one half of the residue of the Estate after the discharge of a mortgage on the residence of Mr Jim Alexander at Croydon Park.
(e) Contracts for the sale of the Estate’s property at 50 Allen Street, Glebe Point were exchanged on 20 February 1999 for a sale price of $455,000.00 and settlement took place on 29 March 1999 when the net proceeds of the sale amounting to $402,001.42 were deposited to a controlled money account with St George Bank.
(f) The balance of the deposit on the sale of the property at Croydon Park, after payment of commission [in the sum of $34,444.62], was deposited into the Solicitor’s Trust Account.
(g) The controlled money account with the St George Bank was closed on 29 June 1999 when the balance of $178,761.09 was withdrawn. The sum of $175,761.09 was deposited to the Trust Account and $3,000.00 covered a cheque payable to Frank Novak.
(h) To enable a distribution to be made in accordance with the Solicitor’s Statement of 8 July 1999, the Solicitor was required to deposit the sum of $2,725.99 from his office account. That deposit was described as “Reimbursement of excess costs inadvertently transferred to office”.
(i) From the one half share of residue due to Mr Jim Alexander, the Solicitor paid an amount required to discharge a mortgage over Mr Jim Alexander’s Croydon Park property and other debts.
(j) The Trust Account statement prepared in relation to the Estate shows costs of Probate and administration of $9,773.15 for which no bill has been located.
(k) Although the Solicitor wrote to Mr Jim Alexander on 13 February 1998 estimating legal costs for Probate and administration at $4,000.00, there was no evidence of any costs agreement between Mr Jim Alexander and the Solicitor. The costs relating to the Deed of Family Arrangement of $6,750.00 were separately billed to Mr Alexander.
(l) The Solicitor prepared a final reconciliation for Mr Jim Alexander dated 12 July 1999 and in which costs [not payable from the Estate] were said to be $8,855.00. Mr Alexander forwarded to the Receiver copies of all statements and bills forwarded to him. He did not receive the bill for $8,855.00. The amounts disbursed are not the same.
(m) In part, the reconciliation failed to include either the interest of $2,098.87 credited to the St George Bank account or the withholding tax of $1,017.75 which was deducted; included [by virtue of one of the bills] a registration fee of $56.00 which had been paid from the Trust Account and not by the Solicitor and $2,000.00 in respect of the repayment of the mortgage over Mr Jim Alexander’s property.
(n) Excess costs were drawn by the solicitor in respect of the costs and disbursements due by the Estate and due separately by Mr Alexander totalling $6,328.05 as follows: -
Costs and disbursements due by the Estate
Add : Registration fees omitted from bill 56.00
Re. Probate 7,355.00
Re. Sale 2,418.15
9,773.15
Costs and disbursements re. J. Alexander 1,210.00
Less :
11,039.15
Costs drawn from the Trust Account 10,947.59
Costs drawn from St. George Bank Account 8,855.00
Less :
19,802.59
Reimbursed by the solicitor 2,725.99
Excess Costs Drawn 6,037.45
17,076.60
Add: Interest payable by the solicitor re Kremnizer 49.32
FID Charges 241.28
(o) The above sum covers a failure to account to the Estate and to J. Alexander as follows: -
$6,328.05
(p) Estate Late Charles Alexander 3,466.05
(q) Mr J. Alexander 1,997.50
(r) Amount included for Land Tax re. Mr Alexander not paid 864.50
(s) The amount of $864.50 was not paid by Mr Vardas on behalf of J. Alexander, but subsequently the son of Mr Alexander was given credit for this amount in a bill issued to him in respect of his affairs by Mr Vardas.
$6,328.05
Estate Elizabeth May Goddard
(a) Ms Elizabeth May Goddard died on 11 December 1999.
(b) Ms Goddard, by her Will, left part of her residuary Estate to John Wesley Goddard, who predeceased her. The Will made no provision for Mr Goddard predeceasing Ms Goddard and there was therefore a question as to whether Mr Goddard’s entitlement would be treated as bona vacantia.
(c) The main asset of the Estate was an account with the Commonwealth Bank the post- Probate proceeds of which and totalling $260,299.58 were received into the Solicitor’s Trust Account on 6 September 2000, the date Probate was granted.
(d) The three Executors appointed under Ms Goddard’s Will were L B McMurray, P E Murray and J M Reimer.
(e) A bill of costs dated 15 September 2000 charged $4,581.00 and, by letter dated 26 September 2000, was forwarded to Mr Barry Murray.
(f) Between 13 June 2000 and 3 October 2000 costs and disbursements totalling $4,571.00 were drawn from the Trust Account.
(g) Correspondence ensued between the Solicitor and the Crown Solicitor’s Office concerning the entitlement in the Estate of the late Mr John Wesley Goddard.
(h) On 22 September 2000 the Solicitor suggested to the Crown Solicitor that a distribution be paid to the beneficiaries and $100,000.00 be placed in a controlled money account to cover the share of the deceased residual beneficiary.
(i) On 28 February 2001 the sum of $100,000.00 was deposited into a controlled money account with the St George Bank Limited pending consideration of submissions with respect to the lapsed share of the late Mr Goddard.
(j) On 29 September 2000 the Solicitor drew the sum of $46,000.00 by trust cheque shown as payable to B Ward - this cheque was presented on 3 October 2000.
(k) The matter file discloses a letter to Beatrice Ward from the Solicitor dated 11 November 2000 advising that a cheque for $46,000.00 was enclosed.
(l) There is a receipt in the instruction file signed by Beatrice Ward for $46,000.00 which receipt bears no date.
The Relevant Legislation
(m) By letter dated 7 February 2001, from Ms Judy Reimer to the Solicitor, Ms Reimer expressed concern with regard to certain matters, including the non receipt of the interim distribution by Beatrice Ward, Frances Ward, (Estate) Phyllis Gray and Susan Gibson.
(n) On 27 February 2001 the Solicitor sent a facsimile to Ms Reimer confirming that a courier was delivering cheques to Beatrice and Frances Ward that morning.
(o) The Trust Account cheque drawn on 29 September 2000 for $46,000.00 and shown in the Trust Account records as paid to B Ward was in fact drawn payable to M Anastasopoulos and represented a misappropriation of the sum of $46,000.00 by the Solicitor.
(p) Ms Ward received a cheque for $46,000.00 from the Solicitor which she banked on 1 March 2001.
(q) Ms Ward informed the Receiver that she signed the receipt, which is in the file, on receipt of that cheque in March 2001.
(r) The Crown Solicitor required that accounts be passed and, accordingly, accounts were lodged with the Court by the Solicitor on 12 September 2003.
(s) The Estate accounts indicated the payment to Beatrice Ward, incorrectly, as dated 29 September 2000. Interest earned in the controlled money account and disbursements made from that account totalling $8,658.45 had not been brought to account in the Estate accounts.
Legal Profession Act 1987
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:
(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.
(a) must pay the money, within the time prescribed by the regulations into a general trust account in New South Wales at an approved financial institution and must hold the money in accordance with the regulations relating to trust money, or
(b) if the person on whose behalf the money is received directs that it be paid or delivered to a third party free of the solicitor’s control, must ensure that the money is paid or delivered:
(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
(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
Findings
(4) A lien referred to in subsection (3) (d):
(b) does not prevent a solicitor from withdrawing or receiving, from trust money or controlled money:
(c) does not affect any enforceable lien or claim that a solicitor has to any money, 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, so long as the procedure prescribed by the regulations is followed, 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.
(5) Money received by a solicitor on behalf of another person:
(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.
(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.
(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.
(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:
(10) A reference in subsection (1) to a third party does not include a reference to an associate of a solicitor.
"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).
62 Keeping of accounts
(1) A solicitor shall keep:
(2) The accounting records referred to in subsection (1) shall be kept in a manner that enables them to be conveniently and properly audited.
(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.
(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.
Professional misconduct is defined in Section 127 of the Legal Profession Act. 1987 Relevantly:
“(1) For the purposes of this Part, professional misconduct includes:
(a) unsatisfactory professional conduct, where the conduct is such that it involves a substantial or consistent failure to reach reasonable standards of competence and diligence, or
(b) conduct (whether consisting of an act or omission) occurring otherwise than in connection with the practice of law which, if established, would justify a finding that a legal practitioner is not of good fame and character or is not a fit and proper person to remain on the roll of legal practitioners, or
(b1) ...
(c) conduct that is declared to be professional misconduct by any provision of this Act, or
(d) a contravention of a provision of this Act or the regulations, being a contravention that is declared by the regulations to be professional misconduct.
23 The Tribunal is comfortably satisfied [Briginshaw v. Briginshaw (1938) 60 CLR 336] that the evidence adduced by the Informant establishes that the respondent wilfully breached section 61 of the Legal Profession Act 1987 in the matters of Miltunovic; Christofi; Alexus P/L; Pavlakos; Pavlakos/Tovesoul; Jankovic; McMahon; Imbruglia; Diakonikolis; Franlex; Alexander and Goddard.
24 The Tribunal is satisfied to the requisite standard that the evidence establishes that the respondent breached the provisions of section 62 Legal Profession Act 1987 in respect of the following matters: Miltunovic; Christof; Alexus P/L; Jankovic; McMahon; Imbruglia; Diakonikolis; Franlex; Alexander and Goddard.
25 The allegation that the respondent wilfully misappropriated trust monies is established by the evidence in each of the matters listed in paragraph 11 above.
26 The Tribunal is comfortably satisfied that the respondent forged the signature of K. McMahon at the foot of a letter dated 14 May 2001.
27 The Tribunal is satisfied to the requisite standard, that the respondent misled a Trust Account Inspector in relation to the alleged instructions from K. McMahon.
Professional Misconduct
28 Section 61(8) Legal Profession Act 1987 provides that it is professional misconduct for a solicitor to wilfully contravene subsections (1) or (2). The Tribunal is satisfied that the respondent has, on numerous occasions, wilfully breached the requirements of those subsections. The relevant facts appear from the particulars, but, for example only, in the matter of Milutinovic, the respondent, having received payment of costs and disbursements from his client, failed to pay costs due to Mr. Coshott in the sum of $4,670.45, and counsels fees in the sum of $6,300. The respondent misappropriated those sums. The Tribunal finds that the numerous breaches of section 61 constitute Professional Misconduct.
29 Section 62 (4) of the Legal Profession Act 1987 provides that a wilful contravention of subsections (1),(2) or (3), is professional misconduct. There are a number of instances of breach of section 62 in the particulars. For example only, the Tribunal notes in the matter of Milutinovic that a sum of $21,000 received from the client was paid into a Trust account ledger other than in the name of the client. The Tribunal finds that the numerous breaches of the provisions of section 62 were wilful and constitute Professional Misconduct.
30 The Tribunal finds proved the numerous allegations of misappropriation of Trust monies, and is satisfied that those acts of misappropriation constitute Professional Misconduct. Those acts of misappropriation included occasions when monies were paid to the respondent’s general account in breach of his obligations, and occasions when monies which should have been held in trust for one client, were utilized to provide a necessary credit in the trust account ledger of another client. For example only, the Tribunal notes that the sum of $21,000 received on behalf of Milutinovic [although not paid into a ledger in the client’s name], was subsequently transferred by journal entry to the account styled “Coshott re Mak”, and used to pay counsel’s fees in that matter.
31 The facts of the counts involving forgery of Mr. McMahon’s signature, and misleading the Trust Account Inspector, appear sufficiently from the particulars. The Tribunal is comfortably satisfied that the conduct of the respondent in relation to that matter is disgraceful and dishonourable, and such that no practitioner of good repute or professional competency would engage in. The Tribunal is satisfied that the motive for these acts of blatant dishonesty, involved an attempt by the respondent to cover his misappropriation of Trust account monies.
32 The Tribunal is satisfied that the conduct of the respondent throughout this litany of dishonest and disgraceful conduct, was wilful and represented a determined effort to prefer his own perceived interests over those of his clients. On numerous occasions his breached his duty as a member of an honourable profession, to abide by the standards expected of a legal practitioner. In circumstances where a legal practitioner so comprehensively breaches his duty to members of the public, there can be no result other than that his name should be removed from the Roll of Legal Practitioners.
33 It was clear from the outset of the hearing before the Tribunal, that the respondent expected no different result. Having digested all the evidence relied upon by the Informant, it would not have been within contemplation of the Tribunal that any other order would discharge the duty of the Tribunal to protect members of the public from legal practitioners who so manifestly breach their professional obligations to their clients, to their profession and to the community.
34 Whilst it is well recognized that the duty of the Tribunal is protective rather than punitive, the Tribunal also has a duty to ensure that members of the profession are reminded that such flagrant breaches of the acceptable standards of behaviour, will meet with condign disciplinary consequences. It is incumbent upon the Tribunal to take the necessary steps to maintain proper standards of professional behaviour, in order both to protect the public and to protect and maintain the reputation of the profession.
35 The Orders of the Tribunal are:
1. That the name of the Legal Practitioner be removed from the Roll of Legal Practitioners;
2. That the Legal Practitioner pay the costs of the Society of and incidental to the proceedings before the Tribunal.