Re Taylor

[1996] QCA 260

IN THE COURT OF APPEAL	[1996] QCA 260
SUPREME COURT OF QUEENSLAND

Motion No. 310 of 1995.

Brisbane

Before Pincus J.A.

McPherson J.A.

Byrne J.

[Qld. Law Society v. Taylor]

IN THE MATTER of THE QUEENSLAND LAW

SOCIETY ACT 1952

- and -

IN THE MATTER of an Application by JOHN BERTRAM TAYLOR for admission to the Roll of Solicitors

JOINT REASONS FOR JUDGMENT OF PINCUS J.A. AND BYRNE J.

Judgment delivered 06/08/1996

This is an application on behalf of John Bertram Taylor for an order that he be admitted to the roll of solicitors.

The applicant was admitted to practice as a solicitor of the Supreme Court of Queensland on 7 September 1965, was suspended from practice on 29 April 1988 and struck off the roll by the Statutory Committee of the Law Society on 14 February 1989. The application is opposed by the Queensland Law Society on the ground that the applicant is not a fit and proper person to be a solicitor. It is said that this conclusion follows from the circumstance that the applicant admitted, on the occasion on which he was struck off, having misappropriated $15,582.19 from trust monies; he was sentenced on 5 October 1992 to imprisonment in respect of that offence, having repaid the whole sum before sentence was imposed.

The applicant served 5 years articles of clerkship, completed the Solicitors’ Board examinations and on admission in 1965 worked as a lawyer for a real estate firm for a short time and then practised as a solicitor on the Gold Coast, in Mackay and in Brisbane until 1978. In that year he became the first director of the Law Claims Division of the Society, work he performed until 1981 when he went back into private practice as an employed solicitor. In March 1982 he took over a practice at Annerley, which he had agreed to purchase for $90,000. He arranged to borrow an additional $18,000 for working capital; at the time he owed a substantial amount of money under a mortgage on his family home. For a number of reasons, one of which, according to the applicant, was dubious conduct on the part of the solicitor who sold him the practice, the venture was not a success; although he worked long hours the income the applicant obtained from the practice was not enough to meet his commitments. Within a few months after the purchase the bank was dishonouring the applicant’s cheques. He was unable to pay professional indemnity fees due to the Law Society, obtained a short extension, but still paid late.

This led to the proceedings taken against the applicant; the Statutory Committee fined him $250. Various means were used to improve the applicant’s financial position; a partner came in with him, paying $45,000 for his share, at the beginning of 1985. The applicant explored the possibility of selling his house to raise money. The two partners took over another practice in 1986, employing a solicitor to run it, and a year later the applicant and his partner dissolved the partnership, on the basis that the partner took over the practice which had been bought in 1986. During the period from the purchase of the practice for $90,000, in March 1982, until it was sold in 1988, the applicant, according to his affidavits, worked extremely hard with little respite, but was it appears unable to resolve his financial problems. Further, accounting practices which the applicant regarded as unsatisfactory were allowed to develop in relation to the trust account; according to the applicant’s version of events, he made attempts to remedy this situation, but with only limited success, one difficulty being shortage of funds with which to engage suitable staff.

It does not appear to us, however, that those unsatisfactory practices, the details of which it is unnecessary to mention, had any direct connection with the applicant’s misappropriations. We will not give a full account of them; what the applicant did, and did repeatedly over a period of years, was to take money from his trust account in circumstances in which he knew himself not to be entitled to do so. The first incident of misappropriation set out in the material is representative of the pattern of the others. The applicant was acting in a matrimonial dispute and under a court order a sum of $11,300 was to be paid to the applicant’s client; that sum was paid into the trust account. Shortly after that, a sum was paid out of the account approximately equalling the amount of the applicant’s costs, leaving nearly $10,000 to the client’s credit. But later the applicant caused the whole of the balance to be paid out, principally to pay counsel’s fees, bringing about a misappropriation of nearly $7,000. In explanation of this the applicant says that he was black-listed by the Bar Association for non-payment of counsel’s fees and that he had insufficient money to pay them, or to pay wages which were due. He caused the funds of the client just mentioned to be misused, it appears, by way of what he regarded as a temporary measure, intending to restore the proper balance in due course. That he had such an intention is not disputed, but conduct of this kind was repeated from July 1983 to September 1987, on 13 occasions.

The applicant accepts that his conduct was dishonest. But there are grades of dishonesty and different sorts of misappropriation. Mr Morris Q.C., who appeared for the applicant, pointed out that the case was not one in which there is any suggestion of trust account funds being used in profligate living; nor is it said that money was being taken for the purpose of speculation. The applicant’s case is that he was caught in a continuing financial crisis due to his having gone into heavy debt to purchase an insufficiently profitable practice and that the pressure caused him to behave in an uncharacteristic way. That the recurring dishonest behaviour, although it continued over a period of four years, was uncharacteristic of the applicant’s general conduct appears clearly enough from the material. In many ways he was an exemplary citizen, participating willingly and on an honorary basis in community affairs; his mode of living gained the approval of reputable people who were prepared to stand by him, despite his disgrace.

In matters of this kind one tends to find an assemblage of references from various people with whom the person whose character in issue has had contact; that is so in the present case. But the references which have been obtained on behalf of the applicant appear to be of an unusually impressive standard. Reputable practitioners have been moved to sign documents asserting their continuing regard for the applicant, notwithstanding their knowledge of the misappropriation we have mentioned. So have other persons whom one would not ordinarily expect to give a favourable reference to a former solicitor convicted of serious trust account offences; we instance the Chief Stipendiary Magistrate, Mr S J Deer. Further, practitioners for whom the applicant has worked as a law clerk since his imprisonment have made affidavits including favourable views of his conduct; one said:

"Paradoxically, given his recent history, I found John Taylor to be scrupulously
ethical and professional at all times."

The applicant says that a precedent for readmission in a case rather similar to the present is to be found in the decision of the Full Court in the case of John Richard Bell (Motion No. 622 of 1991, 6 December 1991); that authority is discussed below. But it is argued on behalf of the Society, by Mr Perry, that Bell’s case is not applicable and that the Court should not readmit this applicant because he is not shown to be a fit and proper person to practice as a solicitor. It is not submitted for the Society that the applicant lacks fitness or propriety for any reason other than the misappropriations - for example, that he is incompetent, or inclined to misbehave professionally in any other way. Counsel for the Society submits, however, that the applicant’s lack of fitness is exemplified by the way in which the application is put: Mr Morris offers on behalf of the applicant to undertake that, if readmitted, he will not practice on his own account or in partnership. Mr Perry submits that it is inappropriate to establish different grades of fitness and propriety, that an applicant is either fit and proper or he is not, and that admission subject to the condition suggested would place this applicant in a suspect category.

These submissions have some attraction, but in our opinion they over-simplify the problem. There are plainly degrees of fitness; it is not as if there is a sharp gulf between the least fit solicitors on the roll and all of those who, like the applicant, have been judged unfit to practise. Experience suggests that solicitors, like members of other professions, vary considerably in their fitness to practise. That is of course not merely a matter of refraining from misappropriation, but being dependent upon possession of various qualities: devotion to the clients’ interests; competence and thoroughness in doing the work; being careful not to involve a client unnecessarily in litigation; ensuring that, where the solicitor is acting for people whose interests conflict, that situation is resolved in a way which does not involve subordinating one person’s interests to those of another; being careful not to mislead other practitioners or the Court; refraining from charging unjustifiable fees. It is unnecessary to give other examples, for the point is plain enough: the fitness of legal practitioners depends on the degree to which they possess a considerable range of qualities. Generally speaking, when the ultimate professional penalty of striking off is applied, that is because of misappropriations, a breach of a solicitor’s duty which is "cut and dried" and tends to be easily proved.

The applicant’s fitness must be judged, having regard of course to the misappropriations of which he was admittedly guilty, but having regard also to what on the evidence appear to be other characteristics, ones of an admirable kind. We have referred to the opinions about the applicant’s character which have been given by members of the profession, and others, and constitute substantial evidence in his favour on the question of fitness to practise. It is also urged on his behalf that one should note that after he was transferred from prison to a "half-way house" in February 1991, the applicant worked at the Caxton Legal Centre very competently; that subsequently he continued to work voluntarily, on a regular basis, at the Centre; that his work in recent years as an employee seems to have given much satisfaction to his employers and has, of course, been engaged in with the consent of the Society; that there is evidence that the applicant has made earnest efforts to keep himself up-to-date, including undergoing a practice management course conducted by the Society in 1992. On the occasion when he was struck off, a psychologist gave evidence to the effect that (to put it in layman’s language) deficiencies in the applicant’s ability to cope were exposed by the pressure he was under when trying to practise as a principal solicitor; there is evidence from the same psychologist, more recently, to the effect that with treatment the applicant’s personal qualities, so far as they bear upon his ability properly to practise as a solicitor, have improved substantially.

It was argued on behalf of the Society that the present case differs from Bell because there the misappropriations were engaged in as a result of a temporary psychiatric condition which was subsequently said to have been cured. It is true that there is that difference, but it should also be noted that there the amount taken was substantially greater, particularly when one has regard to the dates, than in the present case. But each case differs and Bell is certainly not authority for the proposition that solicitors who misappropriate amounts of money which are not excessively large are entitled, after a reasonable time off the roll, to readmission. What Bell is authority for, of importance for present purposes, is the proposition that it is proper for the Court, on an application for readmission to impose a condition of a kind suggested by Mr Morris, but limited to a period of one year. We were referred by Mr Perry to what was said in the Full Court in the case of J D Currie (Motion No. 417 of 1990, judgment 8 March 1991):

"Mr Currie deposed that he was prepared if necessary to undertake or to accept as a condition of his re-admission that he would not practise on his own account or in partnership nor operate on any trust account unless permission was first obtained from the Court or the Society. . .If the only difficulty in the case of Mr Currie’s application was that he had no current experience in a solicitor’s practice, it might be appropriate to impose conditions of the kind he proposed for a twelve month period . . . But in our view it would be wrong to impose such conditions on a permanent basis. The imposition of such conditions would amount to a recognition that he was not a fit and proper person to be admitted. Moreover, it is undesirable, in our opinion, that there be categories of practitioners, some of whom are and some of whom are not subject to continuing restrictions on their right to practise." (12, 13)

It was this reasoning which, as it seems to us, constituted the Society’s basic objection to the proposal that the applicant be readmitted subject to a condition that he not practise on his own account or in partnership. In Bell’s case Currie was referred to on another point, in the judgment of G N Williams J, and immediately following that his Honour said:

"Here the Board suggested that there be a condition that the applicant complete a year’s employment as an employed solicitor of a practising practitioner before practising on his own account. The applicant readily agreed to the inclusion of such a condition". (8)

The present is not a case in which it would be an appropriate course simply to admit the applicant to practise, unconditionally; nor would the problem be properly dealt with by attaching such a condition operative for a defined period, for example 12 months. If the applicant is to be readmitted, what should be done, in our opinion, is to impose a condition without limit as to time, but reserving to the applicant a right to apply to have the condition expunged. Such an order would differ from that which was made in Bell but would be somewhat similar to that which was refused in Currie. In the latter case, as will have been noted, the court’s objection was to imposition of a condition on a permanent basis, the reason being the undesirability of creating a category of practitioners subject to a restriction on their right to practise.

It does not appear to us, with respect, that what was said in Currie can be taken to be a universal rule. As was pointed out in the reasons given in that case, not only does the Court have power to admit conditionally (in re Bridgeman [1934] Qd.S.R 1 at 9) but practising certificates may be issued subject to conditions: s. 40, 40A of the Queensland Law Society Act 1952.

A period of 8 years has elapsed since, on account of the dealings with his trust account which later led to the applicant’s imprisonment, he was suspended from practice. Since then the applicant has done a considerable amount of legal work and, as was pointed out on his behalf, has done it with the Society’s consent. By working as he has been, as a law clerk rather than an employed solicitor, the applicant has undoubtedly undertaken responsibilities in the former capacity which are in many respects identical to those he would undertake in the latter. The disadvantages of the present situation from his point of view include the likelihood of greater difficulty in obtaining work, some limitation in the type of work he can do and, presumably, diminished ability to attract a salary commensurate with his ability and experience. The countervailing advantage is that urged upon us by Mr Perry, keeping the solicitors’ roll unsullied by the names of those who have proven themselves unfit to practise. But we accept that, as was contended on behalf of the applicant, he acted as he did, although over a long period of time, because of the enormous financial pressure to which he was subjected, only some adverse results of which have been mentioned above. Practitioners who for one reason or another find themselves unable to cope with the (sometimes enormous) pressure of practice on their own account, experience shows, react in various ways, including it is said attempts at self- destruction. It appears to us on the evidence that the applicant is a fundamentally decent man who found himself in a situation from which he could see no escape and this led him to take the unwise and dishonest course of "borrowing" against his trust account in the hope that his position would improve.

It is our opinion that, because of the extent to which he has since his conviction worked in legal firms, it is unnecessary that the applicant undergo any further training as a condition of readmission to practice, but, proceeding with caution as the reported cases say we should, we would impose the condition suggested by Mr Morris, as an additional safeguard. That is, we would admit the applicant as a solicitor, once more, subject to a condition that he not practise on his own account or in partnership, but reserving to the applicant the right to apply in due course to have that condition expunged.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Motion No. 310 of 1995

Brisbane

Before Pincus J.A.
McPherson J.A.
Byrne J.

[Qld. Law Society v. Taylor]

IN THE MATTER of THE QUEENSLAND LAW

SOCIETY ACT 1952

- and -

IN THE MATTER of an Application by JOHN BERTRAM TAYLOR for admission to the Roll of Solicitors

REASONS FOR JUDGMENT - McPHERSON J.A.

Judgment delivered the 6th day of August 1996

I have read and I agree with the joint reasons of Pincus J.A. and Byrne J.
The applicant was convicted in 1990 of multiple counts of misappropriating funds in his

solicitor's trust account to a total amount of $15,582.19. The precise number of counts of misappropriation with which he was charged does not appear from the material in the record; but, going by the affidavit material presented to the Statutory Committee of the Law Society at the hearing which took place before the conviction and sentence, it seems likely that some 13 or so counts of misappropriation were charged.

It may have been helpful on this application to have a more detailed explanation of the mechanics of some of those misappropriations; but, doing the best I can, it seems that the transactions giving rise to the charges can be considered as falling into three categories. There were cases where the applicant overcharged clients by billing them for fees in amounts larger than he ought to have charged. There were also some cases where he overpaid himself for work done. In some of the instances in these two categories the client appears to have been billed with outlays which were never met at all, or had not been met at the time the outlay was billed to the client. Taken together, these two categories of misappropriation appear on a rough estimate to have involved a total of some $6,000 or so, there being some instances in which the amount of the overcharge or overpayment was relatively small.

The other category or form of misappropriation involved the application of sums, which were held in trust for one client, in the satisfaction of liabilities of another client. One of the principal victims of this device was a client named Florianov. A sum of the order of $6,906.53 appears to have been disbursed from moneys held in trust for that client in order to meet liabilities incurred for counsel's fees that were due from another client in a different and unrelated matter. In another example, money held in trust for the client Fletcher Jones was used in paying to the Commissioner for Stamp Duties a sum due for stamp duty that was payable by a different client.

What is not clear is precisely how much of the money involved in these defalcations ended up in the pocket of the applicant himself. Based on the material before the Court, my impression is that the principal beneficiaries of the misappropriations may have been persons other than the applicant. Whether or not that is so, the total amount of the general deficiency ($15,582.19) with which the applicant was ultimately charged was repaid by him at the time he pleaded guilty and was sentenced.

Taken together with some of the other circumstances referred to in the joint reasons of Pincus J.A. and Byrne J., the application is one which, in my opinion, justifies this Court in adopting the somewhat exceptional course of allowing the applicant to be re-admitted.

The order should be in the terms and subject to the condition set out in the joint reasons for judgment of Pincus J.A. and Byrne J.