The Council of the Law Society of New South Wales v Hussein
[2010] NSWADT 182
•27 July 2010
CITATION: The Council of the Law Society of New South Wales v Hussein [2010] NSWADT 182 DIVISION: Legal Services Division PARTIES: APPLICANT
REPSONDENT
The Council of the Law Society of New South Wales
Erdem HusseinFILE NUMBER: 082017 HEARING DATES: 3 and 4 December 2009 SUBMISSIONS CLOSED: 28 April 2010
DATE OF DECISION:
27 July 2010BEFORE: Hale S - Judicial Member; Riordan M - Judicial Member; Fitzgerald R - Non-Judicial Member CATCHWORDS: Solicitor – professional misconduct –unsatisfactory professional conduct- breaches of Legal Profession Act, 1987, sections 61 and 62 LEGISLATION CITED: Legal Profession Act, 1987, Legal Profession Act, 2004, Legal Profession Regulations 1994 CASES CITED: In re Hodgekiss [1962] SR (NSW) 340; Re Miles; Ex Parte Law Society of New South Wales [1966] 84 WN (Pt 1) (NSW) 154; Re Mayes and The Legal Practitioners Act (1974) 1 NSWLR 19; Law Society of New South Wales v Hill [2002] NSWADT 190 at [45]; Law Society of New South Wales v Lukas [2004] NSWADT 231 at [19]; Council of the Law Society of New South Wales v Halligan [2009] NSWADT 317; Briginshaw v. Briginshaw (1938) 60 CLR 336 REPRESENTATION: APPLICANT
RESPONDENT
P. Boyd, Solicitor
T. Williams, SolicitorORDERS: 1.The Respondent is guilty of professional misconduct
2.The Respondent is guilty of unsatisfactory professional conduct
3.The Respondent is publicly reprimanded
4.The Respondent is fined the sum of $1,000.00
5.The Respondent is to pay one half of the costs of the Law Society as agreed or assessed within 6 months of such costs being agreed or assessed
REASONS FOR DECISION
The Disciplinary Application
1 In a Disciplinary Application filed in the Tribunal on 21 August, 2008, the Council of the Law Society of New South Wales (‘the Law Society’) alleged that the Respondent Solicitor, Erdem Hussein, (‘the Solicitor’) was guilty of professional misconduct whilst practising as a Solicitor on the basis that he:
1)delayed in responding to correspondence
2)failed to communicate
3)failed to transfer documents
4)acted without instructions
5)grossly delayed in prosecuting the client’s claim
6)entered into a fee agreement contrary to the Motor Accidents Compensation Act, 1999
7)misled or attempted to mislead his client
8)was grossly negligent
9)grossly delayed
10)wilfully breached S61 of the Legal Profession Act, 1987
11)wilfully breached S.62 of the Legal Profession Act, 1987
12)improperly dealt with trust property
13) wrote misleading correspondence
14)Prepared and attended to the swearing of an Affidavit knowing it to be false
15)acted unethically with respect to representations to a mortgagee
16)prepared and forwarded to a real estate agent a contract for sale on behalf of a vendor knowing that the vendor was not seized with title to the property being sold
17) knowingly misled the ANZ Bank in order to obtain money from the Bank belonging to a deceased estate for which the solicitor claimed to be acting, and
18) hindered, obstructed and delayed an Investigator appointed under S.55 of the Legal Profession Act, 1987
2 The Particulars included in the Application described the relevant transactions out of which the complaints arose in some detail. They occurred within the period from 2000 to 2004 and related to a number of complaints bought by the Law Society and by the Solicitor’s clients. It is not alleged that the Solicitor misappropriated any funds or gained a benefit for himself flowing from the complaints.
3 The Law Society sought to move on the Orders contained in the Application (apart from Order No. 3 which was withdrawn at the commencement of the hearing) being (1) that the Solicitor be publicly reprimanded and pay a fine; (2) that when the Solicitor first applies to the Law Society of New South Wales for a practising certificate, he shall accompany such an application with a medical report by a psychiatrist nominated by the Manager of the Professional Standards Department of the Society. The costs of the assessment and report are to be met by Mr. Hussein and no practising certificate is to be issued to him unless (and until) such medical report indicates that the examining doctor is of the opinion that Mr. Hussein is fit to resume the practice of law; (3) for a period of three (3) years during which Erdem Hussein again holds a practising certificate, any practising certificate so held shall be endorsed with the following conditions: (a) the solicitor’s right to practice is restricted to that of an employee of a solicitor holding an unrestricted practising certificate and; (b) The Solicitor is not to operate on any account of any Solicitor that may contain trust funds and (4) that the Solicitor pay the costs of the Society of the proceedings.
The Reply filed by the Solicitor
4 The Solicitor filed an Amended Reply to an Application on 2 December, 2009 and moved on that document.
5 In the Reply, the Solicitor admitted breaches of Sections 61 and 62 of the Legal Profession Act, 1987 but denied they were wilful breaches. He denied the complaints relating to Roe, Kaymak Arif, Umit Arif, Milika Taufia, Sami Sarraf and the Estate Hassan Kaffa. He admitted the delay in paying Counsel’s fees in relation to the Balloot complaint but otherwise denied the balance of the complaints. In relation to the complaint of hinder, obstruct and delay Investigator, he denied same.
6 The Solicitor opposed the Orders sought by the Law Society.
Relevant Statutory Provisions
7 As already stated, the Disciplinary Application was filed on 21 August, 2008. It related to complaints which fell within a time frame between 2000 to 2004. These dates precede the commencement of the Legal Profession Act, 2004 (‘the LP Act, 2004’)
8 By virtue of clause 16 of Schedule 9 to the LP Act 2004, the complaints are therefore governed by the now-repealed LP Act 1987, except in relation to the proceedings in the Tribunal. These proceedings are governed by Chapter 4 of the LP Act, 2004, subject to the proviso that the Tribunal ‘may not make any determination or order of a disciplinary nature’ against the Solicitor that is ‘more onerous than could have been made’ under the LP Act 1987.
9 Three Sections within Chapter 4 of the LP Act 2004 deal with the concept of professional misconduct and unsatisfactory professional conduct. The relevant portion of these Sections are:
Section 497
- 1)For the purposes of this Act:
Professional Misconduct includes:
(a)unsatisfactory professional conduct of an Australian legal practitioner, where the conduct involves a substantial or consistent failure to reach or maintain a reasonable standard of competence and diligence.....
- Sub-paragraph 1 (a) lists the types of conduct that are ‘capable of being unsatisfactory professional conduct or professional misconduct’ which includes ‘conduct consisting of a contravention of this Act’.
- For the purposes of this Act Unsatisfactory Professional Conduct includes conduct of an Australian legal practitioner occurring in connection with the practice of law that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent Australian legal practitioner.
10 As already indicated, the Disciplinary Application alleged breaches of Sections 61 and 62 of the LP Act, 1987. So far as relevant, section 61 states:
S.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
(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(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:
(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
(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 .
1)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) .......................
(b) does not prevent a solicitor from withdrawing or receiving, from trust money or controlled money :
(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
(c) ...........................
(d) ...........................
(e) ...........................
(f) ............................
(8) It is professional misconduct for a solicitor to wilfully contravene sub-section (1) or (2)
(9)In this section:
Trust money means money required to be dealt with in accordance with subsection (1) (a).
11 So far as relevant s. 62 provides:
Keeping of accounts
1)A Solicitor shall keep accounts
(a) in the case of trust money (within the meaning of Section 61) —accounting records, or
(b) ...........................
that disclose at all times the true position in relation to money received by the solicitor on behalf of another person
1)The accounting records referred to in subsection (1) shall be kept in a manner that enables them to be conveniently and properly audited
3)A wilful contravention of subsection (1), (2) or (3) is professional misconduct.2)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
12 In the LP Act 2004, provisions broadly equivalent to Sections 61 and 62 of the earlier Act are to be found in Sections 254, 255, 256 and 264.
The Nature of the Evidence
13 The Solicitor was admitted to practice as a solicitor of the Supreme Court of New South Wales on 6 July, 1984 and held a Practising Certificate until 29 July, 2004 at which time his certificate was cancelled and his files were removed by the appointed Receiver, Mr. Andrew Brown. Prior to his ceasing to practice, he had worked as an employed solicitor reaching junior partner status and in November, 1989 he commenced practising as a sole practitioner and continued in sole practice until 29July, 2004.
14 The Solicitor had no complaints history prior to the matters the subject of this hearing.
15 The evidence tendered by the Law Society comprised three affidavits by Raymond John Collins, Solicitor, sworn on 11 August, 2004 (admitted without objection) 18 August, 2008 and 25 November, 2009 (both admitted after objection) an Affidavit of Anthony Gilbert Farquhar, Solicitor, sworn on 21 August, 2008 (admitted without objection as amended), part of Affidavit of Erdem Hussein dated 12 August, 2004 (not including pages 2-7) together with various other miscellaneous tenders.
16 Mr. Farquhar was appointed Investigator pursuant to Section 55 of the LP Act, 1987 on 15 April, 2004 to investigate the affairs of the Solicitor practising under the firm name of Erdem Hussein. Annexed to Mr. Farquhar’s Affidavit is his Final Report being annexure ‘A’ to that Affidavit . Mr. Farquhar was cross examined at length on his Affidavit as a result of which the following emerged:
(a) that following his appointment on 15 April, 2004, he did not receive material from the Law Society that enabled him to take the matter further until June and therefore the first action he took was not until 11 June, 2004 when he wrote to the Solicitor notifying him of his appointment.
(b) that at the time of his appointment, the Society already had before it a Report pursuant to S. 55 of the LPA prepared by Mr. Livermoore , Trust Account Inspector dated 24 December, 2002 ( X ‘A’)
(c) that he had caused facsimile letters to be forwarded to the Solicitor on 11 June, 2004, 17 June, 2004, 25 June, 2004 and 30 June, 2004 and 14 February, 2005 (by post as well as by facsimile)
(d) that he had telephoned the Solicitor’s office on 21 and 22 June, 2004 leaving messages both times, and again on 12 July, 2004 leaving a message
(e) that he had received an unsigned facsimile letter from the Solicitor on 25 June, 2004
(f) that he had received one telephone message from the Solicitor asking him to call the Solicitor
(g) that he had only ever had one telephone conversation with the Solicitor being on 3 August, 2004 in which he thought he would have informed the Solicitor that his practising certificate had been cancelled and that he should co-operate with Mr. Farquhar.
(i) that the Solicitor was never given any formal notification, or informal notification by Mr. Farquhar of what files/material he wished to inspect.(h) that it was not until 19 September, 2005 that a draft report was issued by Mr. Farquhar, the reason for the delay being due to the substantial number of files that needed to be looked at and contacts to be made with various solicitors and the fact that files themselves were forwarded to him on a piecemeal basis from Mr. Brown (the appointed Receiver). The final report was issued by Mr. Farquhar on 14 February, 2006 it containing little variation (or none) from the draft report. Mr. Farquhar was unable to proffer a reason as to why it took 5 month to provide his final report.
(j) that when Mr. Farquhar did inspect the files, he was never sure that any file he had was intact, that there was rarely a diary note, including conference or telephone notes, there were a number of instances where other firms of solicitors had sent letters with client’s’ authorities to take over files but nothing on the file to indicate attendances in relation to the transfer of those files.
(l) a concession that the absence of a file note does not necessarily indicate that instructions were not being taken.(k) that Mr. Farquhar did not take any steps to enquire about the integrity of the files which were provided to him.
17 The evidence tendered on the Solicitor’s behalf included his sworn Affidavit dated 11
November, 2009, the Report pursuant to Section 55 of the Legal Profession Act prepared
by Greg Livermoore, Trust Account Inspector, Affidavit by Justin Newall sworn on 1
December, 2009 (testimonial evidence), Affidavit by Jospeh Pinto sworn 1 December,
2009 (testimonial evidence) and other miscellaneous tenders.
18 In his Affdavit evidence, the Solicitor says that his practice had functioned
successfully, however, in 2001, his sister, Shemiye who assisted him in the practice
by providing secretarial and book keeping services, was diagnosed with breast cancer
and died on 13 June, 2003. In between her various admissions to hospital for
treatment, she continued to work for the Solicitor but her capacity was very much
reduced and this had an impact on the Solicitor’s productivity given her significant role
in the practice and his reliance upon her.
19 In early 2002, the Solicitor’s mother was diagnosed with breast and colon cancer and
died on 23 August, 2004. It seems that the Solicitor was the person who provided care
and support to both his mother and sister during their illness as the Solicitor’s father had
died in 1997. He says that this put a great strain on him both emotionally and on his
ability to conduct his practice and whilst he believed he was coping with his workload,
the reality was, he was falling more and more behind at the expense of answering the
Law Society and the complaints by clients.
20 Also, in the year 2002, the Solicitor was late in lodging his trust account report with
the Law Society and gained an extension which he complied with. The following year,
the Report was not lodged until July, 2003 as a result of which the Law Society
imposed a condition on the Solicitor’s practising certificate for the year 1 July, 2003
which required the appointment of a manager to control his trust account every three
months and a further condition that he lodge his trust cash book and trial balance
reconciliation with the Society every month. Documents were lodged with the Society
monthly but no manager was ever agreed upon or appointed to control the trust account.
21 From early 2003, the Law Society commenced writing to the Solicitor in relation to
the various complaints.
22 On 16 July, 2004 the Law Society sent a letter by DX and fax to the Solicitor advising
that a resolution had been passed by the Council of the Law Society to the effect that it
was considering cancelling his practising certificate and requesting that he explain in
writing, by Thursday 22, July, 2004, the specified conduct referred to in the attachment
to the letter. The Solicitor did not respond.
23 On 29 July, 2004, the Solicitor received a fax from Mr. Andrew Brown on behalf of
the Law Society advising that the Society had cancelled his practising certificate and that
he was no longer entitled to practice and he has not done so since that time.
24 On 11 August, 2004 the Solicitor received a telephone call at his home from Mr.
Brown advising that an ex parte application was to be made by the Law Society to a
judge in chambers at 4.30 pm on that day for the appointment of a receiver to his
practice. On 12 August, 2004, orders were made by consent for the appointment of a
Manager to the Solicitor’s practice. A receiver was not appointed.
25 The cancellation of the Solicitor’s practising certificate came about as a result of his
lack of response to the letters and phone calls from Mr. Farquhar , the investigator
appointed pursuant to S.55 of the Legal Profession Act, 1987 on 15 April, 2004. In fact,
the genesis to these entire proceedings appears to stem from the Solicitor’s inability to
respond to correspondence and phone calls as set out in the complaints and, even
allowing for the sad events that engulfed the Solicitor as set out above, it is difficult to
understand why a Solicitor of some 20 years standing would adopt such an approach
which he must have known would be to his detriment.
26 The Solicitor’s oral evidence, for the most part, did not enlighten the tribunal in that
his answers were often not responsive to the questions, sometimes not plausible and
admissions were scarce.
27 No evidence was put forward by the Law Society in relation to Order No. 4 and
indeed Mr. Boyd, in his submissions, was unable to assist the Tribunal as to why the
Order was sought in the first place and did not press the Order and, in the opinion of the
Tribunal, rightfully so. Mr.Williams, for the Solicitor submitted it should never have
been sought on the material available to the Society and the Tribunal is of the same view
and dismisses that part of the Application.
The Various Complaints
Balloot -
[Time Line re conduct complained of – 11 July, 2003 to 19 November, 2003]
(a)Solicitor failed to provide the complainant with an account for costs and disbursements
(b)Solicitor failed to release the complainant’s file and other papers notwithstanding that his account had been paid in full
(c)Solicitor delayed in providing a cheque to Counsel for fees although dated 11 July, 2003 until 27 April, 2004
(d)Solicitor drew on funds held in payment of his costs prior to providing a Memo of his Costs and Disbursements
(e)Solicitor wilfully breached S. 61 of the Legal Profession Act
28 The background to this complaint centred on the Solicitor acting for the client in Supreme Court Equity proceedings to defend a claim bought against the client by Divine Homes Pty Ltd which proceedings were settled in or about June, 2003. Mr. Balloot complained that the Solicitor had not issued an account to him despite the fact that he had paid $2,000.00 for Counsel’s fees and $5,000.00 for Solicitor’s costs. Mr. Balloot also complained that he had repeatedly requested his file be handed over without success ie from July to November, 2003. It was common ground that the $5,000.00 had not been put into a trust account, rather, the Solicitor had paid the costs into his office account sometime around about 18 July, 2003 but had not issued an account in a form specified by the Act until March, 2004.
29 The evidence shows that the Legal Services Commissioner first referred the Balloot complaint to the Law Society on 17 December, 2003 following Mr. Balloot complaining to that authority. The Law Society wrote to the Solicitor on 4 February, 2004,(of note, that letter contained a paragraph which read ‘Please note that I have spoken to Mr. Balloot concerning this matter and he has advised me that he is prepared to regard his complaint as resolved on the provision to him of your account and his files as noted above’) 18 February, 2004 and on 25 February, 2004 (fax). Instead of resolving the matter as suggested, the Solicitor responds by letter dated 3 March, 2004, and that response, in the view of the Tribunal, was consistent with the manner in which the Solicitor gave his evidence during the hearing that is to say, not helpful or responsive and sometimes obstructive. By way of example, in the first paragraph, he gives a broad description of the litigation matters he had been involved in and other difficulties with office equipment etc which he said had prevented him from responding to the Law Society's correspondence; in the second paragraph he states 'to find time to answer your letter today, the writer has had to brief Counsel to conduct an appeal in the District Court and cost him $2,000.00 in fees'; in the third paragraph he questions why he had not received correspondence from the Legal Services Commissioner (in relation to this matter); in the next paragraph he questions why the fax sent to him from the Law Society was not marked 'private and confidential'; in the next paragraph he is critical of the time frame given to the solicitor to respond in 14 days especially in circumstances where the complainant (Balloot) had over 7 months to complain; in the next paragraph he is also critical of the Law Society; and in the next paragraph, questions why a Notice pursuant to S.152 had not been received by him. All of this took up almost the first two pages of the letter, the balance providing information relevant to the Balloot complaint. It is relevant to note that it is not until the last paragraph of the letter, that the Solicitor apologises to Mr. Balloot at the same time requesting that $250.00 be paid to him for his charges for photocopying the file which 'involved considerable time and expense.'
30 Under cross examination, the Solicitor was questioned as to his lack of reference in his correspondence with the Law Society about various alleged conversations which he deposed to in his Affidavit evidence which took place at the meetings he had with Mr. Balloot in July, 2003 and also the fact that such conversations were not referred to in a file note which he made on 11 July, 2003 following his attendance on Mr. Balloot. The alleged conversations centred around Mr. Balloot instructing the Solicitor ‘not to bank the cheque for a few days...’ and also in relation to counsel’s fees ‘not to give him this for some weeks, he should have reduced his bill more, he is to wait for payment’ and ‘I don’t want a receipt, I don’t want any more of counsel paperwork.’ Contrary to the Solicitor's assertion is Mr. Balloot's handwritten assertion in his complaint form that ' I asked him not to bank the cheque given to him for $5,000 before I receive the documents and the bill, and he can forward Mr. Johnson's cheque to him......'
31 In response to several questions from Member Riordan about the making of file notes and the protection such notes can give as well as information to others perusing the file, the solicitor was very slow in conceding that it might have been useful for such a file note to have been made. Certainly, in this instance, it would have been of great assistance to the Solicitor by providing corroborative evidence of the alleged conversation with Mr. Balloot which the Solicitor was relying on in part as to the question of delay.
32 The Solicitor was also questioned about his handwritten account (X1A) which was not on letterhead, not signed, not dated and in response to the question ‘I put it to you again, it does not comply with the regulations as they stood at that time under the Legal Profession Act? He responded, ‘Well at that particular point in time I don’t quite know
what the requirements were. I had given it a totals figure and GST figure I believe.’ The Solicitor also said ‘I can also say that from my recollection at the time that he didn’t want an account. This is on 11 July. He didn’t want any paperwork. He paid me the money and I assumed that the matter was completed pending paying Mr. Johnson (Counsel) and including my own cheque. I don’t recall any phone calls between July and November (from Mr. Balloot) I do recall him coming into my office asking for the documents which I did but if you are asking me if I prepared an account in the form which appears on page 157 of Mr. Collin’s Affidavit, no, I didn’t do an account like that before that time.’
33 The Solicitor went on to say, I didn’t prepare one for a number of reasons. One, because my sister had just passed away and I didn’t have the secretary to type the account, number two, he had accepted –I reduced my account substantially and really the account, even the handwritten account for 53 was really under-costed, it should have properly been close to $9,- 10,000 but I was happy to receive that amount which I thought was fair in the circumstances but I didn’t have the resources to type that account at that time and I wanted to be paid and move on with other matters’.
34 Questioned about the necessity to pay funds into a trust account pending the issue of an account complying with the Regulations, the Solicitor appeared to rely on the handwritten account (XIA) as giving him authority to place the cheque into his office account, saying ‘normally money on account of costs and disbursements would be put into a trust account, yes. If it’s in direct payment of a bill it doesn’t have to go into a trust account.’ Further questioning led to the Solicitor agreeing that in hindsight, it would have been prudent for him to have prepared an account in proper form at the time.
35 Mr. Williams, in reply, showed the Solicitor a copy of Regulation 45 (LPR 2002) (X8), copy of Sections 192 and 193 of the LP Act (XK) and copy of Regulation 78 (LPR 2002) and it was put to him ‘Having now had the opportunity of looking more closely at clauses 45 and 78 of the regulation ,is it your understanding today that either of those clauses have any application in circumstances where you were neither transferring money from the trust account nor commencing recovery proceedings against a client?’ The Solicitor responded. ‘I don’t believe that those provisions apply’. Mr. Williams followed up this aspect in his submissions putting forward the view that the $5,000.00 was never trust money and therefore the Solicitor could not put it into his trust account, rather it was the amount that the Solicitor had agreed to accept in full payment of his costs from Mr. Balloot.
36 There is no doubt in the Tribunal's mind that the Solicitor did believe the $5,000.00 had been accepted in full payment of his outstanding costs and that his handwritten account made it clear that is the amount he was accepting in full payment of his fees and certainly that amount was paid to the Solicitor by Mr. Balloot on that basis. However, if one accepts the evidence of Mr. Balloot, and the Tribunal prefers his evidence to that of the Solicitor, then the Solicitor was not entitled to deal with the $5,000.00 until an account in proper form had been issued to Mr. Balloot.
37 In relation to the payment of Counsel’s fees, it was common ground that the cheque was not sent to Counsel until 22 April, 2004 and by way of explanation, the Solicitor said he had no reason to delay sending payment to Counsel, the cheque had been put with the file and sat on the file and was not found until the Solicitor looked at the file in order to respond to the Law Society’s letter on March, 2004 but even then, the cheque was not forwarded to Counsel until 22 April, 2004.
38 The Tribunal is satisfied that complaints (a), (b), (c) and (d) have been made out to the requisite standard of proof. In relation to complaint (e) the Tribunal is of the view, on balance, that the Solicitor’s conduct in dealing with the $5,000 prior to issuing an account to Mr. Balloot was a breach of Section 61 but not 'wilful' within the meaning of S.61(8) because we cannot establish to our 'reasonable satisfaction' (Briginshaw v. Briginshaw (1938) 60 CLR 336 AT 3) that the Solicitor's actions in dealing with the cheque could amount to reckless carelessness in accordance with the established cases and accordingly, that part of the complaint is dismissed.
Milika Taufia
[Time line re conduct complained of – September, 1996 – July, 2004]
(a)Act without instructions
(b)Mislead client
(c)Gross negligence
(d)Gross delay
(e)Failure to communicate
39 In September, 1996, the Solicitor received instructions from this client after she suffered injuries when she slipped and fell outside Auburn Shopping Village in September, 1991. By that time the three year limitation period had expired.
40 A file diary note (11 September, 1996) indicated that the Solicitor was alert to the limitation period in which he must commence proceedings against the client’s former solicitors.
41 The Solicitor commenced correspondence with the NZI Insurance (the public liability insurer for the company operating the shopping centre) and that insurer by letter dated 13 March, 1998 made clear any claim was Statute barred.
42 Between July, 1998 and 6 May, 1999 the Solicitor took witnesses statements and briefed Counsel to advise and on 6 May, 1999 issued a District Court Statement of Claim against the former solicitors of Mrs. Taufia but failed to serve the process until 10 August, 1999.
43 In December, 1999, the Solicitor sent a brief to a Mr. David Maddox of Counsel who subsequently advised that it was usual to seek an extension of the liability period before commencing proceedings against the Solicitors.
44 On 14 February, 2000 the claim by Mrs. Taufia was struck out by the presiding Judge pursuant to the District Court Rules. The Solicitor gave notice that he would seek to reinstate the claim and the Solicitors for the Defendants wrote requesting he provide answers to particulars which they had originally sought in October, 1999. Those particulars were not supplied until May, 2001 despite the fact they had been drafted by Counsel in late February, 2000.
45 The Solicitor on 3 May, 2001 made an offer to settle the proceedings (notwithstanding the proceedings had been struck out) of $55,000 inclusive of costs. There was no evidence on the file that the solicitor had instructions from his client to make an offer or settle for that figure.
46 Nothing was done by the Solicitor to reinstate the matter despite the fact that Mr. Maddox of Counsel had written to the Solicitor in October, 2001 and on 25 August, 2003 reminding him that the delay will diminish the prospects of success (of reinstating the claim).
47 On 20 January 2004, Mr. Maddox returned his Brief and on 22 July, 2004, another firm of solicitors sent an authority requesting the file.
48 The Solicitor was briefly cross examined as to inconsistencies between what he had deposed in his Affidavit and that of the Farquhar Affidavit relating to the striking out aspect. The Solicitor stated in his Affidavit, ‘the matter was mentioned by the solicitor for the defendant on behalf of both parties for the purpose of obtaining an adjournment by consent. The Registrar referred the matter to Delaney J. who struck out the matter in the absence of argument. I was available to come to Court on short notice if any difficulty arose, but was not contacted by the solicitor who mentioned the matter. ........’
49 It was put to the Solicitor that the Farquhar Affidavit (page 62) contained a letter from Price Waterhouse Coopers Legal of 16 February, 2000 which stated at the third paragraph, ‘both our agent and the writer attempted to contact you prior to the said directions hearing and left messages in your office answering machine in this regard’ and the Solicitor did not dispute this. Furthermore , the Solicitor said, ’I gave them both my mobile number and they rang my office and did not leave messages on my mobile’
50 In his affidavit evidence, the Solicitor deposed that he was relying on Mr. Maddox to draft the necessary documents for reinstatement of the matter but the Tribunal notes that evidence is inconsistent with the correspondence written by Mr. Maddox to the Solicitor as set out in the particulars. The Solicitor also deposed that from about May, 2001 until 24 September, 2002, the client was not contactable firstly because she was hospitalised and then was absent Australia until September, 2002. The Solicitor offered no explanation for the delay between September, 2002 to 19 July, 2004 when his practice came under the control of Mr. Brown.
51 The Tribunal is satisfied that the complaints (d) and (e) have been made out to the requisite standard of proof. However, the evidence does not support the Tribunal making a finding based on the Briginshaw test as regards complaints (a), (b) and (c) given that Mr. Farquhar's evidence as regards this complaint was at times, based on assumptions and the Tribunal did not have the benefit of any evidence from Mrs. Taufia.
Estate Late Sami Sarraf
[Time line re conduct complaint of – November, 2001 to March, 2002]
(a)Wilful breach of S.61
(b)Wilful breach of S. 62
(c) Improper dealing of trust property
(d) Misleading correspondence
(e) Preparing and attending to the swearing of an Affidavit knowing it to be false
(f)Acting unethically with respect to representations to a mortgagee
52 On 24 June, 2001 Sami Sarraf died intestate. He was survived by four infant children , their mother, being his former wife (Kathy Zghab) and an adult son (Michael Sarraf)
53 The Solicitor received instructions from the adult son to make an application for Letters of Administration but by late 2001, he ceased to act for that son. The Solicitor then commenced to act for the former wife to whom Letters of Administration were ultimately granted on 26 February, 2003.
54 The assets of Mr. Sarraf’s estate included a property (subject to a mortgage) at 20 Parkes Street, Guildford, a Toyota Ute, a stump grinder and a Isuzu truck (registered in the name of its original owner)
55 On 30 November, 2001 the solicitor wrote a letter to the mortgagee manager of the Guildford property stating “.....we act for the Administrator of the estate of the late Sami Sariff. It is confirmed that we have listed the property for sale....’ At the time the solicitor wrote this letter and further letters on 13 December, 2001 and 22 December, 2001 Letters of Administration had not issued to Kathy Zghab nor had she applied for same.
56 On 30 November, 2001 the solicitor wrote a letter to Merrylands First National Real Estate Agency enclosing a draft contract for sale. The vendor in the contract was described as ‘Kathy Zghab the administratrix for the Estate of the Late Sami Sarraf’ At the time the solicitor prepared the contract Letters of Administration had not issued to Kathy Zghab nor had they been applied for. A buyer was found and on 8 February, 2002 the solicitor wrote to the solicitor acting for the purchaser requesting that the sale be conditional on the Vendor (Kathy Zghab) obtaining Letters of Administration within 3 months failing which either party could rescind the contract. Ultimately, the mortgagee took possession of the estate property (5 December, 2002)
57 The Solicitor, on 22 January, 2002, wrote a letter to a Tony Palmer directing him to pay certain moneys for sale of equipment belonging to the estate. At the time this letter was written, no grant of Administration had been made to Ms. Zghab. The letter also directed that two cheques be paid to Ms Zghab in the sum of $7,500.00 and $4,600.00. She was not entitled to such funds.
58 On 29 January, 2002 Ms Zghab swore an Affidavit in support of her Summons for Administration of her former husband’s estate. Paragraph 12 of the Affidavit disclosed liabilities of $1,000 to Robert Palmer (being commission for the sale of assets) and $7,645.00 to Merrylands First National (being Estate Agents commission). Such debts were not liabilities of Sami Sarraf.
59 On 1 February, 2002 the solicitor received from Tony Palmer the sum of $3,000.00 which he deposited into his trust account. On 5 March, 2002 the solicitor withdrew $700.00 from his trust account and paid it to Ms. Zghab ‘as advance to beneficiary as directed by Administration’. At the time of this payment, the description was false as Letters of Administration had not been granted to Ms. Zghab nor was she a beneficiary.
60 In his Affidavit evidence, the Solicitor said that one of his staff members drafted the relevant correspondence and that he was not sure whether he had checked the correspondence or not but conceded that the word ‘proposed’ should have been used in relation to the word ‘Administrator’ in such correspondence. In relation to the advance payment to Ms. Zghab, the Solicitor stated that she was in financial difficulty and had 4 infant children who would become the beneficiaries of the estate and had instructed him to pay the $700.00 by way of advance payment, that he was ‘uncomfortable’ with the payment but at the time he made that payment, the documents to support a Grant of Administration had been prepared (but not lodged) and he had no reason to believe a grant would not be made as sought.
61 Requisitions were raised by the Court following the lodgement of the Grant for Letters of Administration including obtaining the consent of the deceased’s son to the application and it took almost 12 months for those requisitions to be satisfactorily answered before a Grant was issued. It seems some of the delay was occasioned because the Solicitor had difficulty locating the son, Michael Zghab.
62 The circumstances of this complaint demonstrates to the Tribunal a complacency as to proper procedure and practice by the Solicitor in circumstances where he should have known better, particularly given the fact that he has been in practice for 20 years and says in paragraph 13 of his Affidavit that his areas of practice include, 'wills, probate.....' The fact that ultimately, Ms. Zghab was granted Letters of Administration is no justification for the fact that the law requires certain procedures to be followed where no Will has been left by a deceased, no doubt for the protection of potential beneficiaries and trust property, and the Solicitor should have followed those procedures including checking the correspondence that his staff was generating and sending out. The Tribunal makes the point that following proper procedure and practice also has the benefit of protecting the Solicitor against possible claims by a client or the Law Society as happened here.
63 The Tribunal is satisfied that complaints (c) (d) (e) and (f) have been made out to the requisite standard of proof. Complaints (a) and (b) involved the solicitor paying out money to Kathy Zghab and recording in the trust ledger, ‘as advance to beneficiary as directed by Administratrix’ when the Solicitor knew that Letters of Administration had not been granted, and that Kathy Zghab as the proposed Administratrix was not a beneficiary. The Law Society asserts this conduct was a wilful breach of the relevant Sections.
64 The Tribunal has considered the question of ‘wilful breach’ in conjunction with the cases of In Re Hodgekiss [1962] SR (NSW) 340; Re Miles; Ex Parte Law Society of New South Wales [1966] 84 WN (Pt 1) (NSW) 154; Re Mayes and The Legal Practitioners Act (1974) 1 NSWLR 19; Law Society of New South Wales v Hill [2002] NSWADT 190 at [45]; Law Society of New South Wales v. Lukas [2004] NSWADT 231 at [19] and Council of the Law Society of New South Wales v. Halligan [2009] NSWADT 317.
65 The cases require an examination of the Solicitor's state of mind, knowledge and intention at the time of the alleged breach. The Solicitor admitted he ‘felt uncomfortable’ in paying the money to Kathy Zgab presumably based on the fact that he knew Ms. Zghab did not have the relevant authority to authorise him to advance those moneys from his trust account given that no Grant of Administration had been made in her favour. During his oral evidence, the Solicitor said in response to a question from Mr. Boyd 'do you appreciate that upon the death of Mr. Sarraf that the estate vested in the Public Trustee prior to either probate or letters of administration being granted' the Solicitor responded, 'No.' The Tribunal members have difficulty accepting this answer from the Solicitor given that he had, by his own admission, been practising in the area of wills and estates for many years and ought to have known that he was not entitled to advance estate funds from the trust account until the appropriate authority was received, in this case, a Grant of Letters of Administration.
66 The Tribunal is satisfied that by his conduct in releasing the funds to Ms. Zghab, although no doubt motivated by compassion for her circumstances, the Solicitor demonstrated a reckless indifference to his obligations under Section 61 and Section 62 of the Act. On that basis, the Tribunal is comfortably satisfied that complaints (a) and (b) have been made out.
Roe
[Time line re conduct complained of – September, 2003 to January, 2004]
(a)delay in responding to correspondence
(b)failure to communicate
67 The Solicitor acted for the landlord of a shop at Seven Hills and David Roe, Solicitor of Gosford acted for the Lessee.
68 On 10 September, 2003 the solicitor forwarded a letter to David Roe enclosing the Memorandum of Lease and Disclosure Statement. The Memorandum of Lease indicated that the monthly rent was $1,8333.33 inclusive of gst whilst the Disclosure Statement showed the monthly rent as $2,000.00 exclusive of gst.
69 On 11 September, 2003 David Roe returned to the Solicitor the executed Memorandum of Lease together with cheques for the bond, the first month’s rent in the sum of $1,833.33 and the Solicitor’s costs and disbursements for registering and stamping the lease. The letter did not enclose the Disclosure Statement.
70 On 25 September, 2003 David Roe wrote to the Solicitor requesting advice as to whether the Memorandum of Lease had been executed and he wrote again on 10 October, 2003.
71 On 8 October, 2003 the Solicitor withdrew from his trust account an amount representing his costs.
72 On 10 November, 2003 in the Solicitor’s presence the client executed the Memorandum of Lease and a form for the Office of State Revenue.
73 On 12 November, 2003 David Roe forwarded a letter to the solicitor advising him that the cheque for the first month’s rent in the sum of $1,8333.33 had been returned by the Landlord to the client.
74 On 8 January, and 20 January, 2004 David Roe wrote to the Solicitor requesting his advice as to the present position.
75 On 17 February, 2004 David Roe forwarded a letter of complaint to the Law Society.
76 On 18 February, 2004 the Solicitor wrote a letter to David Roe pointing out that the Disclosure Statement was not returned as previously requested.
77 On 13 August, 2004 when a Manager was appointed to the Solicitor’s practice, the Memorandum of Lease had not been stamped or registered.
78 The Solicitor was cross examined firstly about his not responding to letters from the law society seeking a response to the complaints made by Mr. Roe and secondly as to his lack of disclosure of a telephone call he says he had with Mr. Roe in late December, 2003 and referred to in his Affidavit but not in his communication with the Law Society as regards the Roe Complaint. When asked ‘but as a matter of courtesy with Mr. Roe writing to you, wouldn’t it have been prudent to drop him a two sentence letter acknowledging his letters and saying what your instructions were from your client?’, the Solicitor responded ‘I basically spoke to Mr. Roe on the telephone conversation and told him what the position was. He didn’t accept that was the position’.
79 None of the correspondence that Mr. Roe sent to the solicitor over a period of 5 months referred to the alleged phone call and the fact that the Roe correspondence sought an answer to the same question (the status of the lease in terms of its stamping and registration) leads the Tribunal to question whether the alleged phone call ever took place.
80 In re-examination, the Solicitor was asked about the consequences of the Disclosure Statement never having been returned by Mr. Roe to which he replied, ‘the tenant can argue the lease is invalid’ and when asked whether his position was that the lease was never validly in place he responded, ‘Yes’. Whether the lease was valid or otherwise, does not, in the Tribunal’s view, provide an answer for the Solicitor’s lack of response to the correspondence from Roe who, as a member of the profession, is entitled to be accorded the professional courtesy of being responded to. Indeed, the profession relies upon its members to provide timely replies to correspondence to ensure the efficient conduct of legal business for the benefit of the client, and the profession. On the evidence, the Tribunal finds these two complaints have been made out to the requisite standard of proof.
The Umut Arif Complaint
[Time line of conduct complained of – February, 2004 to August, 2004]
(a)failure to transfer documents
(b) failure to communicate
81 In June, 2000 the Solicitor received instructions from Umit Arif after he suffered injuries in a motor vehicle accident on the way to work.
82 On 10 February, 2004 Mr. Arif instructed Keddies to act on his behalf the following day Keddies wrote a letter with an authority to the Solicitor requesting the file. The Solicitor says he did not receive the letter.
83 On 19 March, 2004 Keddies forwarded another letter to the Solicitor requesting the file following an earlier telephone message being left on 15 March, 2004.
84 On 19 April, 2004 a Mr. Baraket from Keddies spoke with the Solicitor and on the following day Mr. Baraket forwarded a facsimile message.
85 Between 23 April, 2004 and 4 August, 2004 telephone messages were left for the solicitor and letters sent with no response by the Solicitor except for a telephone conversation by a staff member of Keddies with the Solicitor on 3rd August, 2004. A further message was left by Mr. Baraket with the solicitor’s office requesting he ‘put your costs and disbursements in writing’.
86 In his Affidavit evidence, the Solicitor says that in relation to the failure to deliver the file, firstly that Mr. Baraket did not give any undertaking to protect his entitlement to costs and secondly that there may have been a number of telephone messages and possibly some correspondence which he did not attend to in a timely fashion and if that was the case, then it was due to the many issues of concern that he had at the time and his absences from the office. The Tribunal addresses this latter aspect in its findings.
87 The Tribunal finds these two complaints made out to the requisite standard of proof.
Kaymak Arif
[Time line of conduct complained of – [2001 to August, 2004-]
(a) Failure to transfer documents
(b) Failure to communicate
(c) Act without instructions
(d) Gross delay in prosecuting client’s claim
(e) Enter fee agreement with client contrary to Motor Accidents Compensation Act, 1999
88 On 19 July, 2000 the solicitor received instructions from Mrs. Kaymak Arif after she suffered injuries in a motor vehicle accident on 26 April, 2000.
89 In August, 2000 the solicitor corresponded with CTP Insurer and by letter dated 5 October, 2000 received an offer of settlement. Subsequently, the solicitor on 21 March, 2001 requested a medical report and on 18 July, 2001, Dr Guirgus furnished the solicitor with his report which indicated a whole person impairment of 13%.
90 On 10 August, 2001 Smyth & Mallam forwarded a letter to the solicitor advising they had received instructions from Mrs. Arif. The letter requested the transfer of the file.
91 On 21 October, 2001, the solicitor spoke on the telephone to Mrs. Arif’s husband.
92 In mid to late November, 2001 there was correspondence and telephone attendances between the CTP Insurer and the Solicitor.
93 On 11 February, 2002, Mrs. Arif and her husband conferred with the solicitor following which on 5 March, 2002 the solicitor forwarded a brief to advise on evidence to Mr. Maddox of Counsel.
94 On 18 March, 2002 Mr Maddox advised by letter that the solicitor should apply for a medical assessment pursuant to MACA Part 3.4 and if the matter did not settle, he should apply for an assessment of the claim pursuant to MACA, Part 4.4. Counsel also advised that a close eye should be kept on costs as it was likely the costs the insurer would be required to pay would be limited to about $1,000.
95 On 15 April, 2002 the CTP Insurer wrote to the solicitor enclosing a medical report together with a Settlement Offer and Agreement.
96 On 7 August, 2002 the CTP Insurer forwarded a letter to the solicitor which advised that Allianz was acting on behalf of the Nominal Defendant and that CTP had been calling the Solicitor’s office on numerous occasions and that if they did not receive a response by 15 August, the claim would be closed.
97 On 1 October, 2002 the solicitor forwarded to the CTP Insurer the medical report of Dr. Giurgis and on 4 November, 2002 the CTP Insurer wrote to the solicitor advising that the matter was being referred for dispute resolution.
98 On 14 November, 2002 the CTP Insurer wrote to the Solicitor requesting a counter offer and advising Mrs. Arif was not over the 10% WPI threshold.
99 On7 March, 2003, the Solicitor completed the MAS form during a conference with Mrs. Arif who at the same time signed a fees agreement which provided for Mrs. Arif to pay solicitor/client costs at the rate of $300.00 per hour plus GST and noted that recovery of party/party costs recoverable was limited a maximum of $1000 to $1500. The MAS form was sent off.
100 On 8 March, Mr. Maddox of Counsel (following a telephone call from the Solicitor) wrote advising the 3 year period would expire on 26 April, 2003 and strongly suggesting that he apply to CARS for an assessment.
101 On 10 February, 2004, Mrs Arif instructed Keddies and the following day Keddies forwarded a letter with an authority to the Solicitor requesting the file. The Solicitor says he did not receive the letter.
102 On 15 March, 2004, the Solicitor forwarded a letter to CARS with MAS form 2, the final page of which he signed on behalf of Mrs. Arif.
103 Between 19 March, 2004 and 5 August, 2004, six letters were sent from Keddies to the Solicitor as well as phone calls made but the file was not transferred. During this period the Solicitor conducted telephone calls with the CTP Insurer and forwarded a letter to the CTP Insurer with a ‘without prejudice’ offer of settlement.
104 In his Affidavit evidence, the Solicitor says the first notice he received from Keddies notifying him they had been instructed to act was some time shortly after 23 April, 2004. However he goes on to say that in a conversation he had with Mr. Umut Arif (Mrs. Arif’s son who was the person giving instructions on behalf of Mrs. Arif) on 19 March, 2004, Mr. Arif said, ‘We had a conference with Keddies but it was only an enquiry and we did not ask for the file to be transferred. The position is the same as it was with Smyth and Mallam.’ When asked if there was a file note of this conversation, the Solicitor responded, ‘I dont’ have the file, it is with Mr. Brown or yourself’....... ‘I can’t recall without looking at the file’.
105 It was put to the Solicitor that he had inspected the file but it was the Solicitor’s position that he was not sure what files he had inspected. In re-examination, it unfolded that the Solicitor had never been provided with a list of what documents/files had been taken over by Mr. Brown, however, he did concede (in response to a question from Member Hale) that he had made handwritten notes of what documents he inspected although those notes were apparently left in the various files.
106 It was the Solicitor’s position that before transferring this file, he was entitled to have his costs and disbursements protected and that no arrangements had been put in place by Keddies to that effect but the evidence showed that a letter had been forwarded to the Solicitor from Keddies dated 20 April, 2004 which stated inter alia, ‘we undertake to protect your costs and disbursements upon the successful completion of this matter’.
107 In re-examination, it unfolded that Keddies had ultimately paid the Solicitor’s costs and disbursements in both the Umut (19 April, 2006) and Kaymak Arrif (21 April, 2005) matters to the Law Society but the Solicitor had never received any notification of that fact nor had he ever provided them with a Memo of his costs and fees.
108 At the end of the Solicitor’s oral evidence as regards this complaint, and given that there was no evidence from Kaymet Arrif, nor Mr. Barraket himself, the Tribunal Members were not able to determine to the requisite standard of proof that complaints (c) (d) and (e) had been made out and accordingly dismisses same. In relation to complaints (a) and (b) the Tribunal is satisfied they have been made out to the requisite standard of proof.
Estate Late Hassan Mehmet Kaffa
[Time line of conduct complained of – June, 2000 to July, 2000]
109 The complaint against the Solicitor is that he knowingly misled the ANZ Bank in order to obtain money from the Bank belonging to a deceased estate for which the solicitor claimed to be acting.
110 The complaint arises as a result of the Solicitor writing to the deceased estates section of the ANZ Bank at North Sydney enclosing a form ‘Indemnity by Administrators’ addressed to the Bank and signed by Meyrem Kiami Hassan and Fatmali Ali as Executors of the Estate of the late Hassan Mehmet Kaffa. The Solicitor knew, at the time of writing the letter, that Hassan and Ali were not Administrators of the Estate and that the statement contained in the indemnity was false and misleading.
111 The Solicitor subsequently received the sum of $11,328.00 from the ANZ Bank which he paid into his trust account on 15 July, 2000, account ‘Estate of the late Hassan Kaffa’.
112 The proceeds of the ANZ bank account remained in the Solicitor’s trust account until he paid it to the Public Trustee of NSW which was appointed Administrator of the Estate on 21 June, 2001.
113 In his Affidavit evidence, the Solicitor says at the time he wrote the letter, he believed that the two persons who signed the Indemnity were the Executor and Executrix under the deceased’s Will, however, no action was taken to verify that fact before he wrote the letter and it transpired that no Will was found in favour of Hassan and Ali.
114 The Solicitor further deposed that given the value of the Estate he did not anticipate the matter would require either a Grant of Probate or Letters of Administration. In relation to the contents of the letter that he sent to the ANZ bank, he says he did not draft such letter and it was probable he did not look at it other than in a cursory manner. Perhaps more importantly, he deposes, (paragraph 127 of his Affidavit) ‘I did not see the letter as misleading. The bank notified its requirements and those requirements were addressed.’ The response indicates to the Tribunal that the Solicitor misses the point completely in that as the Solicitor being instructed, he is not entitled to act on a ‘belief’ as he did, rather his job is to take steps to verify, as best he can, the person or persons who are entitled to represent the Estate before taking any action in relation to dealing with the assets of the Estate and if he cannot be certain of who those persons are, then his dealings with third parties as regards estate assets should make that fact clear. This complaint has similarities with the complaint in the Sarraf matter and the Tribunal notes the lack of attention to proper procedure and practice.
115 The Tribunal is satisfied that this complaint has been made out to the requisite standard of proof.
Complaint of Hinder, Obstruct and Delay Investigator
[time line of conduct complained of – June, 2004 to August, 2004]
116 The Society’s complaint arises from unanswered correspondence emanating from Mr. Farquhar’s office sent to the solicitor by fax and post and from the Law Society to the Solicitor from 11 June, 2004 to 16 August, 2004. Similarly as regards phone calls made by Mr. Farquhar to the Solicitor. The correspondence related to the notification of the appointment of Mr. Farquhar and requesting the Solicitor to contact him to arrange a mutually convenient time to confer.
117 In both his affidavit and oral evidence, the Solicitor denied having received a copy of the actual appointment notice until 30 June, 2004 under cover of a letter from Mr. Farquhar to the Solicitor. This was in contrast to the evidence of Mr. Farquhar whose fax journal records were tendered (X 1B) showing that on 11 June, 2004 at 12.06 pm a facsimile was successfully transmitted to fax number 9671 61077, being the Solicitor’s fax number, comprising two pages being Exhibit A to the Farquhar Affidavit. It was also in contrast to an Affidavit that the Solicitor had sworn on 12 August, 2004 in Supreme Court Proceedings bought by the Law Society against him for the appointment of a Receiver, where he deposed at paragraph 49 ‘On 11 June, 2004, I received a facsimile transmission from Mr. Anthony Farquhar of Booth & Boorman............ To that letter was annexed a copy of Mr. Farquhar’s appointment dated 15 April, 2004........’
118 In answer to questions about the inconsistency, the Solicitor said that his Solicitor at the time, Ms Rosemary McDougall, had prepared the Affidavit, it had to be done urgently, and that she had made assumptions about what documents he had received or otherwise. In re-examination, the Solicitor was asked which of the two inconsistent statements he now believed to be true, and he responded , ‘I believe that my affidavit dated 12 August, 2004 is correct. It’s more closer to the event and that’s probably what happened.’
119 In relation to the Supreme Court proceedings bought by the Law Society on or about 11 August, 2004, it was put to the Solicitor ‘that the reason why the society sought the appointment of a receiver was because Mr. Brown couldn’t obtain access to you and your premises and your office’ In response, the Solicitor answered, ‘You’d have to ask Mr. Brown that’ This answer was typical of the way in which the Solicitor gave his evidence throughout the proceedings. More often than not, his answers were not responsive to the questions put to him which required further questioning and even then, in many instances, the Tribunal was left in the position of being none the wiser to the detriment of the Solicitor.
120 The Tribunal is satisfied on the evidence before it, that this complaint has been made out to the requisite standard of proof.
Submissions
121 Mr. Williams firstly sought to dispel any notion that the Solicitor had abandoned his practice pointing out that the most time the practice had been closed was for a period of 2 weeks following his sister’s death in June, 2003 and that there was never evidence before the Law Society to the contrary. This point was conceded by Mr. Boyd at the outset of his submissions and rightly so.
122 On the other matters complained of against the Solicitor, Mr. Williams, in summary, submitted that there was no allegation of dishonesty; that Mr. Farquhar, following his appointment, investigated at large and found nothing that could constitute professional misconduct; that the solicitor had been in practice for 20 years without complaint; that the quality of his work deteriorated at about the same time as he was dealing with his family’s illnesses and subsequent deaths; that the Solicitor conceded in some respects (most notably in the matters of delay) that the quality of work deteriorated and his level of competence and diligence did fall below that which might reasonably expected of a practitioner and that whilst putting matters in mitigation, he at the same time concedes unsatisfactory professional conduct in relation to some of those matters.
123 In relation to the breach of S. 61 regarding Balloot, Mr. Williams submitted this was the most serious allegation against the Solicitor and says that the correct position at law was that the $5,000.00 was never trust funds, it had been paid and accepted by the Solicitor as full payment of his costs and therefore did not belong in the Solicitor’s trust account, and that the regulations referred to by the Law Society were only applicable if the Solicitor was suing on the Bill.
124 In relation to the practising restrictions sought to be placed on the Solicitor by the Law Society, Mr. Williams submitted there was no basis for imposing such a limitation on the evidence before the Tribunal and the Tribunal notes that no evidence was put forward by the Law Society that the Solicitor was a person not currently suited to hold a full practising certificate. Mr. Williams pointed out that the Law Society, if it was concerned about the solicitor being out of practice for such a lengthy time, could impose its own restrictions in the event of the Solicitor applying for a renewal of his Practising Certificate.
125 In relation to Order No. 2 sought by the Law Society, Mr. Boyd conceded it was a most unusual order and could offer no assistance to the Tribunal as to the background to its inclusion given that he was not at the relevant meeting when the resolution was passed.
126 Mr. Boyd urged the Tribunal to take into account the Solicitor’s lack of candour in the witness box particularly on matters that could quite easily have been conceded as errors on the part of the Solicitor and given the fact that no allegations of dishonesty were alleged. Mr. Boyd further urged the Tribunal that it was the totality of the offences that elevated the conduct to that of professional misconduct.
127 Due to time constraints at the end of day 2 of the hearing, there was no time for submissions on penalty and subsequently, written submissions were sought and were provided by 28 April, 2010. In those submissions, Mr. Boyd drew the Tribunal’s attention to the case of Council of Law Society of NSW v. Halligan, NSW [2009] ADT 317 and the view of Member Chesterman pursuant to Clause 15 of Schedule 9, it is not necessary to establish that the conduct was wilful for a finding to be made that a breach of the Section occurred.
128 Mr. Williams, on the other hand, submitted that the Tribunal, in Halligan, did not say and, it cannot be drawn from the judgment, that a mere contravention of S. 61, without more, is professional misconduct, and that there is nothing novel in the proposition that unsatisfactory professional conduct found in a contravention of a statutory obligation (S.61 or otherwise) and which is substantial and persists over an extended period may be professional misconduct. In the instant case, this was not alleged against Mr. Hussein.
129 The tribunal was referred to the recent decision of Xu v Council of the Law Society of NSW (2004) NSWCA 430 in which a fine was imposed for a finding of unsatisfactory professional conduct. In particular, the Tribunal’s attention was drawn to the statement by Handley J at par.59 :
’59. The solicitor’s conveyancing work in the Zhang matter was incredibly sloppy and his signing of the incomplete S66W certificate was irresponsible. Although by themselves they were not acts of professional misconduct, repeated acts of this character would properly be characterised in that way.’
130 Mr. Boyd submitted that even if there is no finding of professional misconduct, rather, a finding of unsatisfactory professional conduct, that a fine of $2,000.00 would be warranted. On the other hand, Mr. Williams submitted that Xu’s case is not comparable and does not provide any assistance to the Tribunal Members and reminded the Tribunal that in Halligan’s case, even though a finding of professional misconduct was made, no fine was imposed.
131 It appears there have been no decisions of this Tribunal which stand as truly comparable to this case from which the Tribunal could find guidance.
Findings
132 At the conclusion of day 2 of the hearing, Member Fitzgerald commented that he accepted the Solicitor had been under a great deal of pressure as a result of both his sister and mother's ill health and subsequent deaths and no doubt their heavy reliance upon him during their periods of illness leading up to their respective deaths and the Tribunal accepts that these events must have impacted upon his ability to conduct his day to day practice. However, do these events excuse the Solicitor’s conduct to the extent that Mr. Williams pressed the Tribunal to accept?
133 When one takes into consideration the time lines relative to the complaints in relation to the passing of the Solicitor’s sister and mother, it can be seen that some of the conduct complained of falls squarely within the those two events and other conduct occurred in close proximity leading up to or following the deaths of the Solicitor's sister and mother. In these circumstances, the Tribunal is of the view that some leniency must be afforded to the Solicitor, however, what troubles the Tribunal is the findings that we make in the following two paragraphs.
134 The evidence shows the Solicitor still did not comply with time limits well after each of these two tragic events occurred nor did he respond to correspondence from the Law Society which was being sent to him from early 2003 in a timely manner. When he did respond, there was no evidence of contrition. Also, some of the conduct complained of took place well before his sister’s death although the Tribunal notes and understands that the very nature of a cancer illness usually involves a protracted illness and ongoing treatment.
135 A further consideration for the Tribunal is the manner in which the Solicitor gave his evidence as mentioned throughout this Determination. When a member of the profession comes before his or her professional body for conduct issues, that body (the Tribunal in this case) is entitled to expect frankness and clarity to the extent that it can accept the truthfulness of the evidence being given and satisfy itself that the solicitor has insight into the consequences of his conduct. That was not the case here and that has been to the Solicitor’s detriment in terms of penalty.
136 We turn now to Mr. Boyd’s submissions that we should consider the complaints ‘in their totality’ which could provide us with a sound basis for a finding of common law misconduct. We are not sure, however, whether we can do this given the separate and distinct grounds alleging different kinds of breach of professional duty especially when the facts alleged to constitute one or more of the grounds have not been made out. This aspect was dealt with in Law Society of New South Wales v. Grech [2006] NSWADT 73 where the Tribunal determined in the absence of any authority to guide it on the matter, it could not follow Mr Boyd’s suggested path of bringing together separate and limited findings of breaches of different kinds of professional duty in order to arrive at a single finding of professional misconduct. We are of the same view.
137 In making our findings, we are mindful of the fact that the Solicitor appears to have had an unblemished record of practice for 20 years and that must be taken into account in relation to penalty. Also, it is the view of the Tribunal that the manner of prosecuting the complaints against the Solicitor has been less than satisfactory given the fact that his Practising Certificate was cancelled by the Law Society in July, 2004, that it was not until February, 2006 that the expert issued his final Report and then it took until August, 2008 for the Law Society to file its Application and a further period for it to be heard and determined, in all a period of almost 6 years during which the Solicitor has been unable to work in his chosen profession. In addition, three of the Orders sought by the Law Society lacked the evidence to support them to the extent that Order 3 was withdrawn at the commencement of the hearing and no evidence was presented in support of Orders 2 and 4. Members of the profession who are subject to disciplinary proceedings are entitled to expect timely prosecution based on evidence that can support the Orders sought.
138 The Society seeks its costs which it says total $12,000.00 calculated as to $10,000 for costs and $2,000 for disbursements. Evidence of the Solicitor's financial position was presented to the Tribunal by way of sworn Affidavit dated 3 May, 2010 which shows the Solicitor as being in a parlous financial state his monthly income being from Centrelink in the sum of $924.00 per month with monthly expenses of $6,900.00 per month. He has assets to the value of $925,000.00 against which he has liabilities of $911,000.00. These facts have been taken into account in relation to the Tribunal's determination as to penalty.
139 Our findings in relation to the various complaints can be summarised as follows:
- 1. Balloot Complaint,- 4 grounds established, 1 ground dismissed
2. Taufia Complaint, 3 grounds established, 2 grounds dismissed
3. Sarraf Complaint, - all grounds established (6 grounds)
4. Roe Complaint - all grounds established(2 grounds)
5. Umut Arif Complaint- all grounds established (2 grounds)
6. Kaymak Arif Complaint - 2 grounds established, 3 grounds dismissed
7. Kaffa Estate - complaint established (1 ground)
8. Hinder, Obstruct, Delay - complaint established (1 ground)
140 The essence of the complaints which have been made out, with the exception of the Sarraf Complaints (a) and (b), are matters which the Tribunal considers involve unsatisfactory professional misconduct within the meaning of S. 496 of the Legal Profession Act, 2004. As regards s. 61 and 62 complaints (Sarraf Complaints (a) and (b), the Tribunal finds the solicitor guilty of professional misconduct.
141 The Tribunal makes the following Orders:
- 1.The Respondent is guilty of professional misconduct
2.The Respondent is guilty of unsatisfactory professional conduct
3.The Respondent is publicly reprimanded
4.The Respondent is fined the sum of $1,000.00
5.The Respondent is to pay one half of the costs of the Law Society as agreed or assessed within 6 months of such costs being agreed or assessed.
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