Administrative Decisions Tribunal New South Wales

• Medium Neutral Citation: Council of the Law Society of NSW v Lo [2012] NSWADT 21
• Hearing dates: 30 March, 15 April and 24 June 2011Submissions by 3 August 2011
• Decision date: 13 February 2012
• Jurisdiction: Legal Services Division
• Before: G. Mullane, Judicial Member,; M Riordan,Judicial Member; Mr C Bennett,Non-Judicial Member

Decision

1.The Respondent is guilty of professional misconduct with respect to each of the 8 grounds in the Application.

2.The applicant must file by 17 February any further evidence or submissions on the issue of what orders should be made.

3 The Respondent must file by 28 February any further evidence or submissions on the issue of what orders should be made.

• Catchwords: Solicitor, Discipline, Breach of Undertaking, Misleading Solicitors, Failure to comply with Sections 253, 254, 255, 256 and 260, Misled Investigator, False declaration in Practising Certificate Application, and Unethical conduct
• Legislation Cited: Legal Profession Act 2004
• Category: Principal judgment
• Parties: The Council of the Law Society of NSW (Applicant); Kevin Lo (Respondent)
• Representation: Counsel; M Castle (Respondent); Law Society of New South Wales (Applicant)
• File Number(s): 102022

LEGAL SERVICES DIVISION

G Mullane - Judicial Member, M Riordan - Judicial Member, and C Bennett - Non-Judicial Member

REASONS FOR DECISION

INTRODUCTION

1 This was a hearing of disciplinary proceedings against the Respondent solicitor commenced by the Council of the Law society of NSW by its application filed with the Tribunal on 1 September 2010. The hearing occurred on 30 March 2011, 15 April 2011 and 24 June 2011. Closing submissions were required from the parties by 3 August 2011. Written submissions were not provided by the Respondent.

2 At the end of the hearing, we indicated that we would make a determination regarding the grounds of the complaint and would then re-list the matter to enable the parties to present any further evidence as to the dispositive orders to be made.

3 We ordered that the Law Society file and serve any further submissions in writing on or before 15 July. We also ordered that the Respondent file and serve any written submissions on or before 3 August. However, the Respondent filed no submissions.

ORDERS SOUGHT

4 The Law Society sought the following orders:

1 That the Legal Practitioner's current Practising Certificate be cancelled and, for a period of five (5) years from the date of again holding a practising certificate ["the period"] any Practising Certificate issued to the Legal Practitioner be restricted so as to entitle him to practise only as an employee.

2 During the period, the Solicitor is not permitted to be a Director or shareholder of an incorporated legal practice.

3 That the Legal Practitioner undertake in person [and not on line], at his own expense, and complete within six (6) months of the date of these orders [or within such further time as may be agreed to by the Society or directed by the Tribunal], any such course as may be conducted by the College of Law in Trust and Office Accounting as part of the "exemptee" stream, or such other course or courses as may be agreed to by the Society or directed by the Tribunal and sit for any applicable examination(s) at the conclusion of the said course or courses and, in any event, achieve a pass mark (or better) generally required by the College of Law for the said course(s).

4 That the Legal Practitioner pay the costs of the Society.

5 Such other order as the Tribunal seems fit.

5 THE EVIDENCE: The evidence before the Tribunal comprised:

(1) The Application filed 1 September 2010;

(2) The Reply filed 4 April 2011;

(3) The Affidavit of Karen Margaret Burrard sworn 23 August 2010;

(4) The Affidavit of Garry Terence Napper sworn 12 July 2010;

(5) The Affidavit of Leo Sydney Gore sworn 16 August 2010;

(6) The Affidavit of Raymond John Collins sworn 24 August 2010;

(7) The Affidavit of Kevin Lo sworn 11 March 2010;

(8) Statement of James Nicopoulos of 25 January 2007 (Exhibit E);

(9) Oral admissions by counsel for the Respondent made during the hearing;

(10) Oral evidence of the Respondent in examination in chief and cross examination on 15 April 2011; and

(11) Oral evidence of the Respondent in cross-examination and re-examination on 24 June 2011.

THE GROUNDS

6 The Law Society relies upon eight grounds of complaint, which it alleges each constitute professional misconduct. Those grounds are each set out below:

(1) The Solicitor in his Application for a Practising Certificate for the year ended 30 June 2007 falsely declared that he had not received, held or disbursed any trust money (as defined in Section 243 of the Legal Profession Act 2004) during the period 1 April 2005 and 31 March 2006

(2) The Solicitor wilfully failed to comply with the provisions of Sections 253, 254, 255, 256 and 260 of the Legal Profession Act 2004.

(3) The Respondent misled the investigator, Mr Napper, by remaining silent about having closed the trust account. (The Respondent admits this ground.)

(4) The Solicitor withdrew money for costs and disbursements without complying with the relevant procedures or requirements of the Legal Profession Act 2004.

(5) The Solicitor, having become aware of the true purchase price of 192 Burwood Road, Croydon Park, misled Galilee Solicitors (the solicitors for the incoming mortgagee) by providing cheque directions to Galilee Solicitors which failed to disclose the true position. (The Respondent denies he "knowingly" misled Galilee Solicitors.)

(6) The Solicitor, having become aware of the true purchase price of 192 Burwood Road, Croydon Park, misled Galilee Solicitors (the solicitors for the incoming mortgagee) by not correcting the contents of his letter to Galilee Solicitors of 10 August 2006 therein enclosing a copy of the front page of the Contract for Sale showing the purchase price of $635,000. (The Respondent denies he "knowingly misled" Galilee Solicitors.)

(7) The Solicitor breached his undertaking of 5 October 2006 to Messrs Nicopoulos & Associates.

(8) Unethical conduct: The Solicitor attempted to settle the sale of the property when he was on notice that the discharge of the mortgage to his client vendors from Eurofund (Australia) Pty Ltd, was unauthorised or a forgery.

THE RESPONDENT ' S REPLY

7 The Solicitor did not file a Reply until 4 April 2011, after the proceedings had been adjourned on the first day of the hearing to enable him to do so. He conceded ground 1, (that the declaration in the Application to renew his Practising Certificate was false) but alleged that when he made it he believed (although he had been in practice then for seven years) "that by dealing with the money in a Controlled Money Account he was not subject to the obligations contained in the Legal Profession Act 2004 in respect of trust money" . He admitted Ground 2, but did not provide any explanation for his conduct. In respect of Ground 3, he admitted that he had misled the investigator, Mr Napper, by not informing him that he had already closed the controlled money account. He admitted Ground 4, but did not provide any explanation for his conduct. In relation to Grounds 2, 3 and 4 he stated:

"The Respondent concedes that his conduct fell below the conduct that is required of him and deeply regrets his actions".

8 The Solicitor denied Grounds 5 and 6 and stated:

"The Respondent denies he knowingly misled Galilee Solicitors".

9 In this regard, we note that he did not seem to appreciate the fact that the front page of the contact stated that a deposit was payable was misleading if the agreement of the parties was that the deposit would not be paid at

the time of exchange, which is required by the standard form of contract.

10 Further, in relation to the issue of false statements regarding the deposits, he stated:

"The Respondent understood these instructions to mean that no deposit was required to be paid as a condition of exchange, not that no deposit would ever be paid ... The Respondent says that the word 'Deposit' on the front page of the contract refers to the deposit which is owing, not to whether the deposit has been paid at the time of exchange."

He appeared to ignore or not understand the requirements of the standard form of contract that the deposit be paid at the time of the exchange.

11 By way of explanation for the statement on the front page of the contract said the vendors were "Acting for Self", he stated:

"The words 'Acting for Self' were inserted into the contact because when the Respondent declined to act for both parties, Mr Boutros told him he would rather him act for the purchasers. Following exchange Mr Boutros asked Mr Lo again to act for him and the Respondent acceded to this request."

12 Regarding the issue of not informing Galilee solicitors that the 10% deposit specified on the front page of the contract had not been paid, the Respondent did not recognise any impropriety or inadequacy in his conduct. He said:

"He was under no obligation to do so given his instructions that the deposit was not required to be paid 'on exchange' and his understanding at that point that it would ultimately be paid. His subsequent instructions were that it had been paid."

He did not recognise that the standard form of contract provides that the deposit is payable on exchange, which is the usual practice, or that Galilee Solicitors and its banking client would be expected to infer that the deposit was payable in the usual way. He did not appreciate that if there was an oral or written agreement between the parties to vary the usual practice, then the front page of the contract should indicate this, failing which Galilee Solicitors would be misled into believing that the deposit was to be paid upon the exchange of contracts.

13 In the relation to the matter generally, the Reply indicated:

"The Respondent says generally in Reply to the Application that he now fully appreciates, as he deposes to in his Affidavit of 11 March 2011 that his standards fell well below the standard expected in legal practitioners in NSW and he accepts the need for supervision and further training in accordance with the orders sought by the Law Society."

Ground 1: The Solicitor in his Applicati o n for a Practising Certificate for the year ended 30 June 2007 falsely declared that he had not received, held or disbursed any trust money (as defined in Section 243 of the Legal Profession Act 2004) during the period 1 April 2005 and 31 March 2006

14 We note that the Respondent applied by an Application of 10 May 2006 to renew his Practising Certificate for the year ended 30 June 2007. In the Application, in answer to the question, "Have you received, held or disbursed any trust money ... during the period 1 April 2005 and 31 March 2006?" The solicitor answered, "No" . He signed the Application, which included a Declaration,

"I declare that the contents of this Application are true and correct".

15 The Respondent had received, held and disbursed trust money during the period. He had deposited trust monies of about $189,300 into a Controlled Money Account and he had from time to time received trust monies of about $1,600,000 which he had deposited into his office account. (There was no suggestion that his had misappropriated any of these funds.)

16 The Respondent wrote to the Law Society on 3 September 2008. By then he had had nearly two years to reflect on the issues that had been raised by the Law Society regarding his professional conduct. He had obtained several extensions of time in order to respond to issues they had raised with him. He raised some explanations and reasons which had not been previously relied upon by him. The body of the document is as follows:

" I accept I was in error in my early handling of the Practice's accounting procedure. When I first opened my firm in February 2002, it was always my intention to operate an office account only and not accept trust monies from clients at all. I was just starting out a small practice and formed the view it was too complicated to operate a Trust account especially with my limited resource [sic] and knowledge in the area. Prior to opening my own practice I had worked for G H Healey & Co. which had a separate account department which dealt with all the accounting aspects including a trust account, so I did not personally deal with the trust accounting aspects. As my own practice developed, there was more and more pressure from clients to hold transit monies for pending transactions. I admit I misjudged the situation. On 16 November 2005, I set up the Controlled Monies account and assumed that all future clients' monies could be deposited and held in this account as 'transit money'. I was mistaken in my belief when I declared in my Application for a Practising Certificated [sic] during the period 1 April 2005 and 31 March 2006, that the transit monies account I had is not a trust account. I mislabelled the account as it actually function [sic] more like a trust account, as I later learnt from Mr Gore who also told me that it was inappropriate to deposit all of my clients' trust money into this one controlled money account, as only a specific client's money could be deposited into the one controlled monies account. I accept I was mistaken and apologize unreservedly to the Law Society for my mistake. Despite this, I have endeavoured to keep ledgers and trial balances and trust account receipts, which I provided to Mr Gore for inspection. I concede that I must either take some training or properly maintain a trust account or otherwise not to receive or hold any of the client's funds at any circumstances.

Having carefully read the report by Mr Gore, I accept that I misjudged the situation regarding the handling of the clients' monies. In hindsight, I should have started to operate a proper trust account once the circumstances warranted it.

However, I was under the misapprehension that I could remedy it by using a Controlled Moneys account. Hence my initiative to open such an account on 16 November 2005. This was before Mr Gore ever attended my office and started his investigation.

All the monies have been fully accounted for even though my accounting procedures is [sic] lacking, but I believed I was acting in good faith. I note that Mr Gore does not make any allegation that any such funds were misappropriated.

This is the first time I have ever endeavoured to handle a trust funds [sic]. In hindsight, I should have attended some account-keeping courses or engaged a professional accountant to assist me in this regard. However, the stress and pressures of my sole practice overtook all of my working hours (and most of my personal hours) to the extent that I overlooked this. I accept this should not be an excuse as I am a sole practitioner. But I ask the Law society to take this into account and exercise leniency, as at the time I have [sic] only been in private practice for 4 years as a sole practitioner."

17 In cross-examination the Respondent said that he did undertake a Trust Accounts segment in his course at the College of Law before he commenced practice in 1999, and that he did a Practice Management course before he began sole practice in 2002. However, he said that he didn't think that any part of the Practice Management course addressed the issue of Trust Accounts. His recollection is clearly wrong in this regard.

18 The Respondent stated that since 2006 he had "tried to brush up on my knowledge of Trust accounts" , and that now, "I don't run a Trust Account now or Controlled Money Account" . But later he appeared to concede that there are some cases where he asks for money " up front" when he has not yet rendered a bill. Then when the question was repeated he denied that he does that.

19 However, the Solicitor's evidence as to his knowledge and understanding of his obligations regarding Trust Accounts at that time was very unclear, at times contradictory and generally unconvincing. When he was questioned about what he now knows is the difference between a Trust Account and a Controlled Money Account, he said that a Controlled Money Account "is money of a client not needed for months or more, so the client agrees to it being in an interest bearing Controlled Money Account. You have to complete a Form 4 for such an account." When he was asked what a Trust Account was, he said it was, "Money for client - not for payment of costs". He said it could not be used until there was a direction of the client.

20 He said that if the money was for costs and disbursements then he had to render an account and then if there were no objections from the client, he could transfer the costs and disbursements.

21 When asked about his continuing default of the Trust Account requirements between the report of Mr Gore and the inspection by Mr Napper, he said, "I knew I had to make things right, but I needed time and knowledge". He said that he was looking around "for a course on trust accounts" . But he did not participate in any such course, nor did he seek further advice from the Law Society's Professional Standards Department or from an accountant familiar with the requirements for operation of Solicitors' accounts.

22 The Respondent asserted that he was under a lot of stress once the investigation continued, but he did not seek professional help other than talking to other lawyers. "I was too proud to seek help earlier." He conceded that this was not stated in his Statutory Declarations provided to the Law Society. He said that the hearing and his cross-examination was his first opportunity to raise this matter.

23 When asked about what he has done since then, he said that he does not have an understanding of the procedures and requirements. He said that he does not propose to have a Trust Account until he has "sufficient training" . He conceded that he has not undertaken any training in Trust Accounts other than mandatory Continuing Legal Education. He conceded that he is not a member of any regional Law Society. When asked if he has any other practitioner who is a friend, he said he does not, other than a Registrar at the Federal Court. He said he had not thought of asking any other solicitors for advice about Trust Accounts and bookkeeping.

24 His relevant comments in the letter of 30 September showed that although had undertaken Trust Account education since the discovery of his breaches of the requirements of the Act in relation to trust moneys, he did not recognise that the breaches were not just in relation to his conduct of a "Controlled Moneys Account" - i.e. mixing trust moneys of more than one client in one Controlled Moneys Account. He did not acknowledge or recognise this breach of the Act in depositing trust moneys into the office account and justified that as being "transit moneys" because it was not intended that it remain for very long in the office account. It appears clear that he deposited into the office account substantial trust funds that he received as stakeholder for sales by his clients and also settlement moneys received by his clients from sales or provided to him for their purchases. Even in September 2008 he apparently had not realised the seriousness of his breaches of the Trust Account provisions.

25 Accordingly, this ground is established.

Ground 2: The Solicitor wilfully failed to comply with the provisions of Sections 253, 254, 255, 256 and 260 of the Legal Profession Act 2004.

26 We note that Respondent was admitted as a legal practitioner on 4 June 1999 and that he has been engaged in sole practice since about 20 February 2002.

27 Mr Gore, an investigator appointed by the Law Society, investigating a different complaint, attended on the Respondent's office. The Respondent had not been keeping a trust account. He put general trust funds into a Controlled Moneys Account and also sometimes into his office account. He had repeatedly breached the requirements of the Legal Profession Act 2004 in Section 253 (Requirement to maintain a general trust account for trust money), Section 254 (Requirement for trust money to be deposited in general trust account), Section 255 (Hold trust money deposited in a general trust account of the practice exclusively for the person on whose behalf it is received and disburse the trust money only in accordance with the directions given by the person), Section 256 (Controlled money to be deposited as soon as practicable after receipt into an account specified in the written direction relating to the money), and, Section 260 (Prohibition against mixing trust money with other money).

28 In his report to the Law Society of 31 January 2007 Mr Gore, the investigator, reported among other matters that the Respondent had:

"4. Pooled client's trust funds into a single account and turned them into Controlled Moneys when such funds were clearly general trust moneys.

5. Deposited substantial trust moneys (including a deposit the firm received as a deposit holder under the contact) into the practice's office bank account in breach of the Legal Profession Act 2004.

6. ....

7. Failed to maintain a general trust account and keep the required accounting records as prescribed by the Legal Profession Act 2004 and the Regulation."

29 Details of these matters are set out in Mr Gore's report, which was forwarded to the Respondent with the Law Society's letter dated 6 September 2007.

30 Subsequently, Mr Napper, an investigator in the Trust Accounts Department of the Law Society, carried out a further investigation in November 2008 and prepared a report dated 17 February 2009. He discovered in his investigation that the Respondent had continued to put trust moneys into the "Controlled Moneys" account after Mr Gore's visit and his report. The Respondent denied to Mr Napper that Mr Gore had advised him to stop using the "Controlled Moneys" account.

31 In cross-examination, when asked about his failure to cease his use of the Controlled Moneys Account as a Trust Account between the receipt of Mr Gore's report in September 2007 and the inspection by Mr Napper in November 2008, the Respondent said,

"If it was totally wrong I could have stopped. But the impression that I got was that it could be rectified. I took steps to ensure there were no mistakes."

He later conceded that he knew in 2006 it was incorrect to put Trust Moneys into that account but he continued to allow it to happen.

32 Accordingly, this ground is established.

Ground 3: The Respondent misled the investigator, Mr Napper, by remaining silent about having closed the trust account. (The Respondent admits this ground.)

33 We note that when Mr Napper first visited the Respondent (on 24 November 2008) in order to conduct a routine inspection, he noted that the Controlled Moneys Account had a balance of $44,885.93 as at 3 November 2008 according to the bank statements. Mr Napper asked the Respondent why the funds were still in the account. The Respondent told him,

"It's my money in the account. I didn't want to touch it because of the investigation."

34 The Respondent told Mr Napper that the funds were owing to him for costs in various matters. Mr Napper said to him,

"If it's your money then you should draw the money out and close the account. You will need to provide me with a breakup of the moneys held. Before you can draw out the moneys you must provide copies of bills to me and get the clients' authority to withdraw the moneys."

The Respondent said that he would do that. The Respondent also later produced his bills for the funds in the account, most of which were dated 12 December 2008.

35 However, when the Respondent (in compliance with a request by Mr Gore) provided further documentation in February 2009, it included a bank statement that indicated that all of the funds in the Controlled Moneys Account had been withdrawn on 20 November 2008, before the conversation with Mr Gore on 24 November 2008, and before 12 December 2008 (being the date of most of the bills).

36 The Respondent misled the investigator Mr Napper on 24 November by not informing him that he had closed the account that held trust monies (titled by him the "Controlled Monies Account") 4 days earlier, such that Mr Napper believed the account still contained the trust monies of $44,885.93.

37 Accordingly, this ground is established.

Ground 4: The Solicitor withdrew money for costs and disbursements without complying with the relevant procedures or requirements of the Legal Profession Act 2004.

38 We repeat that on 20 November 2008, the Respondent withdrew $44,885.93 (being all of the trust moneys that were held in the Controlled Moneys Account). However, most of the bills that he produced, for which he said that the transfer of funds occurred, were dated 12 December 2008 - after the funds were transferred.

39 The requirements of the Act in relation to using trust money to pay legal costs are contained in Section 261 of the Legal Profession Act 2004 and Clause 88 of the Regulation. The Respondent has not produced any evidence capable of establishing that the transfer of any of the funds was authorised by the Act and Regulations. He admits that he " withdrew money for costs and disbursements without complying with the relevant procedures ".

40 In cross-examination, the Respondent stated that "in 2008 up to 12 December 2008" he was not issuing bills as such in respect of interim payment for costs and disbursements, but merely receipts. In further cross-examination on this area he was repeatedly evasive. When it was put to him that,

"You had taken the money but not rendered the bills?"

He responded,

"No, I had rendered a receipt".

However, he eventually he conceded that a "receipt" is not a bill.

41 In any event, this ground is established.

Ground 5: The Solicitor, having become aware of the true purchase price of 192 Burwood Road, Croydon Park, misled Galilee Solicitors (the solicitors for the incoming mortgagee) by providing cheque directions to Galilee Solicitors which failed to disclose the true position. (The Respondent denies he "knowingly" misled Galilee Solicitors.)

42 We note that in May 2006 the Respondent was instructed by Mr & Mrs Boutros on the sale of property at 192 Burwood Road, Croydon Park. The Respondent obtained a title search which showed that the property was subject to a first mortgage to St George Bank, a caveat by Eurofund (Australia) Pty Ltd as second mortgagee, and a caveat by Michael Charles Vassili in respect of security given for money lent by Mr Vassili to Mr & Mrs Boutros.

43 The Respondent then received a letter dated 7 June 2006 from a firm of real estate agents advising that the vendors had accepted an offer for purchase of the property for $470,000. That proposed sale did not proceed. By letter dated 23 June 2006 to the Respondent a firm of solicitors informed him that their clients had agreed to purchase the property at an agreed price of $495,000. That sale also did not proceed.

44 In early July Mr Boutros informed the Respondent that he had found another purchaser and told him that he had agreed to not require payment of any deposit on exchange of contracts.

45 On about 10 July 2006 Mr and Mrs Lam, the purchasers, instructed the Respondent to act for them on the purchase, notwithstanding that the Respondent was already acting for the vendor.

46 Contracts were exchanged on 22 July 2006. The contract stated the price to be $635,000 and stated a deposit of $63,500 was payable. No deposit was paid. The contract stated that the vendor acted for himself, but the Respondent in fact acted for the vendor. It appears that the Respondent prepared the contract for sale.

47 By facsimile of 8 August 2006 Galilee Solicitors advised the Respondent that they acted for the National Australia Bank, which was lending money to the purchasers for the purchase. Galilee Solicitors requested that the Respondent provide a recent Title Search, a copy of the front page of the contract and any special conditions, and a copy of the transfer.

48 The Respondent sent those documents to Galilee Solicitors by facsimile on 10 August 2006. The Respondent did not inform Galilee Solicitors that the 10% deposit referred to in the contract had not been paid and that the parties did not intend that it be paid before settlement, if at all.

49 By a letter of 28 September 2006 Galilee Solicitors advised the Respondent that the National Australia Bank would be lending Mr & Mrs Lam $571,500 for the purchase. If the deposit of $63,500 was not to be paid at all, then the consideration for the purchase was in fact $571,500, the same as the amount of the loan from the National Australia Bank.

50 By a letter of 10 October 2006 the Respondent wrote to the solicitors acting for Mr Vassili, who was owed money by the vendors, had security over the subject property and had lodged, and was protected by, a caveat on the title. The Respondent sought the agreement of Mr Vassili to withdraw the caveat so that a sale would proceed and set out proposals as conditions for the withdrawal. He said in that letter, "But the property has been sold for $495,000 only and with a shortfall".

51 Settlement of the sale was planned for 20 October. On 19 October 2006, the Respondent sent a facsimile to Galilee Solicitors instructing them that the funds being advanced after bank cheque fees ($40), be paid in 7 bank cheques which came to a total of $558,586.61. He did not provide a copy of the settlement figures to Galilee Solicitors. The cheques in the list of 19 October included a cheque for $13,385.28 payable to Mr & Mrs Lam.

52 In cross examination when it was put to him that his failure to notify Galilee Solicitors of the change in the purchase price was misleading, he replied "I don't believe that this was misleading".

53 The Respondent knew when he wrote that letter that the $571,500 being advanced by the National Australia Bank, exceeded the purchase price the Lams were paying. That was so if the sale price was only $495,000, as he had represented to the Solicitors for Mr Vassili. (It was so, even if a deposit of $63,500 had been paid and was additional to the $495,000, because then the effective purchase price would have been $558,500, still significantly less than the advance.) However, the Respondent does not say that at that stage, he had any information to suggest any deposit had been paid. At that stage he apparently knew the purchase price had been reduced to $495,000.)

54 He knew that he had not disclosed to the bank or its solicitors the true purchase price. We find he knew that the bank would probably be misled if he did not do so. He should have done so in order to avoid the possibility of money being obtained from the bank by misrepresentation. He did not do so.

55 In fact the loan application to the bank stated the value of the property and the purchase price to be $635,000. Although there is no direct evidence on the point, we find that he believed that so far as the bank knew, the purchase price was $635,000.

56 In his Statutory Declaration of 20 November 2006 provided to the Law Society, Mr Lo does not offer any explanation in relation to his involvement in arrangements with different figures for the price, and the deposit in the contracts for the purchaser and the vendor. Nor does he offer any evidence of what he thought the vendor and the purchaser were seeking to achieve by such. Further he did not offer any evidence of what advice he provided to Mr Boutros or the other vendors in respect of issues of enforceability of the contract where there are such discrepancies and also about enforceability and legality of loan agreements arrived at between the parties without legal advice or drafting. In his Declaration of 20 November 2006 he said:

"In the past couple of weeks, Mr Boutros contacted me again in relation to another property which he wants to sell in Croydon. I have started some preliminary work in relation to this matter, including exchanging contracts with the purchaser."

And further:

"During the course of the .... Conveyances I undertook for Mr Boutros, I believed I acted in good faith in executing my duty as his solicitor."

And, that he was:

"satisfied that I had been provided with genuine Discharge of Mortgage documents by Mr Boutros for the first two settlements (Lots 9 and 11 of 66-70 Baltimore Street, Belfield, NSW) and believed I acted properly in completing these settlements on 26 September 2006."

And he also said:

"I had received instructions from Mr Boutros that he had discharged his mortgage obligations with Eurofund and had previously engaged Mr Greg Smith Solicitor to fulfil this function. Without Mr Boutros' direct authority/consent and specific instructions, I cannot by-pass him and go to a third party like Eurofund and negotiate the mortgage discharge or ascertain Mr Boutros' dealings with Eurofund. To do so would breach privacy laws."

57 In his Statutory Declaration of 21 November 2006 provided to the Law Society, the Respondent addressed issues in relation to his conduct concerning the sale of 192 Burwood Road, Croydon Park. He did not express any concern about him acting for both parties to the transaction and the discrepancy in relation to the purchase price between the contracts held by each of the parties.

58 We find that the Respondent knew, when he gave the direction as to the cheques to be provided, that it would be misleading to Galilee Solicitors (and the Bank) if he did not disclose the true position, thereby inferring that there had been no change in the purchase price. Accordingly, this ground is established.

Ground 6: The Solicitor, having become aware of the true purchase price of 192 Burwood Road, Croydon Park, misled Galilee Solicitors (the solicitors for the incoming mortgagee) by not correcting the contents of his letter to Galilee Solicitors of 10 August 2006 therein enclosing a copy of the front page of the Contract for Sale showing the purchase price of $635,000. (The Respondent denies he "knowingly misled" Galilee Solicitors.)

59 We note that the Law Society also relies upon the particulars to Ground 5 and that much of the evidence has been discussed in relation to ground 5 above.

60 However, in his facsimile dated 10 August 2006, the Respondent sent Galilee Solicitors a copy of the front page of the contract, which indicated that the purchase price was $635,000.

61 By a letter of 28 September 2006 Galilee Solicitors advised the Respondent that the National Australia Bank would be lending Mr & Mrs Lam $571,500 for the purchase. If the deposit of $63,500 was not to be paid at all, then the purchase price was in fact $571,500, the same as the amount of the loan from the National Australia Bank.

62 By a letter of 10 October 2006 the Respondent wrote to the solicitors acting for Mr Vassili, who was owed money by the vendors, had security over the subject property and had lodged, and was protected by, a caveat on the title. The Respondent sought the agreement of Mr Vassili to withdraw the caveat so that a sale would proceed and set out proposals as conditions for the withdrawal. He said in that letter, "But the property has been sold for $495,000 only and with a shortfall".

63 Settlement of the sale was planned for the afternoon of 20 October. On 19 October 2006, the Respondent sent a facsimile to Galilee Solicitors directing that the funds being advanced after bank cheque fees ($40), be paid in 7 bank cheques which came to a total of $558,586.61. He did not provide a copy of the settlement figures to Galilee Solicitors. The cheques included in the list of 19 October included a cheque for $13,385.28 payable to Mr & Mrs Lam and a cheque for $23,572 to be payable to "Kevin Lo & Co, Solicitors, Control Money Account".

64 On the morning 20 October 2006 Mr Boutros instructed the Respondent's secretary that he was allowing the purchasers a rebate and that the purchasers had paid him the 10% deposit in the sum of $63,500. Mr Boutros said the "rebate" of $140,000 included allowance for the payment of $63,500.

65 The Respondent's secretary produced settlement figures. We find that these were adopted by the Respondent. The purchase price was shown as $635,000, the deposit as nil, and in addition to the usual adjustments of rates and charges, there was an allowance by the vendor of $140,000 described as "Vendor allows rebate". As the settlement figures did not acknowledge the payment of any deposit, they purported that after the "vendor rebate" the purchase price was $495,000. The total amount payable on settlement was $495,760.33. (If the deposit had in fact been paid, then the total of the deposit and that amount was $559,260.33.)

66 If there was a "rebate of $140,000" and no deposit was paid, then the actual price for the sale of the property was $495,000; not $635,000 as purported in the front page of the contact, a copy of which had been provided by the Respondent to Galilee Solicitors. If the deposit of $63,500 had in fact been paid, then the actual consideration would have been $558,500.

67 Whether or not the deposit was paid, the Respondent knew that the purchase price was substantially less than the figure of $635,000 he gave the bank's solicitors.

68 In those circumstances the information he had provided to Galilee Solicitors and its client, National Australia Bank, could have facilitated money being obtained from the Bank by a false representation. The Solicitor had been in practice for more than 7 years at that time. He was a qualified and experienced lawyer. We do not accept his claim that he did not recognise that fact. In cross examination when it was put to him that his failure to notify Galilee Solicitors of the change in the purchase price was misleading, he replied "I don't believe that this was misleading".

69 We find that he did mislead Galilee Solicitors and the Bank by failing to disclose the change in the purchase price. We find on the balance of probabilities that he did this knowingly. We find that from his experience of Mr Boutros and his transactions prior to 20 October 2006 (findings about which appear elsewhere in these reasons) he had considerable cynicism about Mr Boutros' conduct and distrust of Mr Boutros.

70 He also knew that in June 2006 proposed sales of the subject property at $470,000 and $495,000 did not proceed and then on 10 July 2006 came word that the property had been sold to the Lams for $635,000 but the deposit wasn't going to be paid in accordance with the contract and subsequently on the morning of the settlement day, the price was substantially reduced; apparently to $495,000. Also he had on 10 October represented that the sale price was only $495,000.

71 He was very evasive when cross-examined about the disparity in the stated sale prices in the Burwood Street contracts. He was very reluctant to concede that even if the deposit were paid, the purchasers were going to be receiving a mortgage advance that was greater than the purchase price of the property. When he was asked on 15 April 2011 if it ever occurred to him that Galilee Solicitors were being misled by him, he answered,

"No".

72 We conclude that by his omission to inform Galilee Solicitors of the change in the purchase price he knowingly misled them. Accordingly, this ground is established.

Ground 7: The Solicitor breached his undertaking of 5 October 2006 to Messrs Nicopoulos & Associates.

73 In relation to Ground 7, we note that the Solicitor gave the following undertaking:

" I, Kevin Lo, Solicitor of Kevin Lo & Co, Solicitors at 32A Hercules Street, Ashfield, NSW, 2131, herein provide an Undertaking to Nicopoulos & Associates, Solicitors at Suite 5, level 1, 402-410 Chapel Road, Bankstown, NSW, 2200, that upon the re-financed settlement of the property at 192 Burwood Road, Burwood, our office shall draw and forward a trust cheque from the proceeds of the sale/refinance in the amount of $60,000 (sixty thousand dollars) in favour of your client, Mr Michael Vassili."

74 The Respondent acted for the vendors (Mr & Mrs Boutros) and the purchasers (Mr & Mrs Lam) in respect of the sale of 192 Burwood Road, Croydon Park. The Solicitor from a title search ascertained that a first mortgage to the St George Bank Ltd ("St George"), a caveat by Mr Vassili and a further caveat by Eurofund (Australia) Pty Ltd ("Eurofund") were registered on the title. The caveat by Eurofund was in respect of a second mortgage and the caveat by Mr Vassili was in respect of loan money owing to him procured by a charge on the property.

75 The loan moneys owing to Vassili were a loan of $110,000 and also interest, fees and charges. The loan was repayable on 14 April 2006, but was not paid. Mr & Mrs Boutros defaulted under a repayment plan that had been negotiated with Mr Vassili. Mr & Mrs Boutros needed to obtain a withdrawal of the Vassili caveat in order to complete the sale of the property.

76 On 26 September 2006 the Respondent wrote to the solicitors for Vassili, Nicopoulos & Associates after having received a letter of demand from that firm in July. In the letter the Respondent said:

"Our client has advised us that he has since made an initial payment of $40,000 to your client, Mr Michael Vassili. We advised [sic] that our client is in the process of obtaining a mortgage to refinance the property at 192 Burwood Road, Burwood. Prior to granting the approval for the refinancing the mortgagee will require clear title, i.e. withdrawal of the caveat on the title of the property.

"As such our client ask [sic] your client to agree to an immediate withdrawal of the caveat so as to enable him to obtain the refinance required in order to pay the debt due to your client. In return, our client will undertake to do the following:

1 Pay Mr Vassili the amount of $60,000 within three (3) weeks from the date of receiving the Withdrawal of Caveat document for 192 Burwood Road, Burwood.

2 To pay your client the amount of $20,000 within a further two (2) weeks upon receiving Withdrawal of Caveat to one of the unit [sic] at 8-10 Gloucester road [sic], Burwood.

3 Another amount of $20,000 within a further two (2) weeks upon receiving Withdrawal of Caveat to one other unit at 8-10 Gloucester Road, Burwood."

77 Eventually as a requirement of Mr Vassili through his solicitors, the Respondent sent a letter of 5 October 2006 to Nicopoulos & Associates. In that letter he said:

"We confirm that upon receiving a Withdrawal of Caveat on the Burwood property from your office, our office shall at settlement drawn [sic] a cheque to the amount of $60,000 (sixty thousand dollars) in favour of your client, Mr Michael Vassili.

"In such regard we enclose herein the appropriate authority and undertaking as requested by your office to confirm that our office would be in a position to perform the promised tasks."

78 Enclosed was a document described as an "Irrevocable Authority/Retainer" by Mr & Mrs Boutros for the Respondent to act for them on "the sale, and/or mortgage, refinance transactions" of the properties listed, which included 192 Burwood Road, Burwood, and an undertaking by the Respondent in the following terms:

" I, Kevin Lo, Solicitor of Kevin Lo & Co, Solicitors at 32A Hercules Street, Ashfield, NSW, 2131, herein provide an Undertaking to Nicopoulos & Associates, Solicitors at Suite 5, level 1, 402-410 Chapel Road, Bankstown, NSW, 2200, that upon the re-financed settlement of the property at 192 Burwood Road, Burwood, our office shall draw and forward a trust cheque from the proceeds of the sale/refinance in the amount of $60,000 (sixty thousand dollars) in favour of your client, Mr Michael Vassili."

79 The Authority was signed by Mr & Mrs Boutros and the Undertaking was signed by the Respondent.

80 On or before 17 October 2006 a signed withdrawal of the Caveat of Mr Vassili was provided to Mr Boutros and he delivered it to the Respondent that day. Subsequently settlement of the sale was arranged for 20 October 2006 and was implemented.

81 The figures for the cheques given to Galilee Solicitors on 19 October 2006 by the Respondent did not provide for any cheque to be payable to Mr Vassili, but provided for one cheque for $1,800 to be payable to Kevin Lo & Co, Solicitors (presumably for costs and/or disbursements) and another cheque for $23,572 to be payable to "Kevin Lo & Co, Solicitors, Control Money Account". It appears that when the Respondent gave the undertaking in the letter of 5 October 2006 he anticipated that in complying with his undertaking to pay $60,000, he would rely on other funds that were already held in his "Controlled Money Account".

82 The cheques provided in accordance with the instructions from the Respondent by Galilee Solicitors included a cheque payable to St George Bank for $494,153.93. St George Bank was the first mortgagee. But in order for St George Bank to provide a discharge of its mortgage on settlement, it required the vendors to pay a total of $525,511.14.

83 Before settlement on 20 October 2006 Mr Boutros instructed the Solicitor to draw a cheque on the Controlled Money Account in the sum of $31,357.21 to make up the difference. It was clear then to the Respondent before settlement that if the settlement proceeded, he would not have sufficient funds in his trust account to meet his undertaking to pay Nicopoulos & Associates $60,000 within 21 days.

84 But the Respondent on 17 October paid Mr Boutros $8,000 of the funds he was holding in trust, and on Mr Boutros' instructions on 19 October he paid $1,100 from those funds to Challenger Financial Services Group and on 20 October he paid $31,357.21 to St George Bank at settlement of the sale. The Respondent did not make any payment to Mr Vassili or his solicitors.

85 The Respondent told the Law Society's inspector that on 20 October 2006, when Mr Boutros instructed him to draw the cheque for $31,357.21, he asked Mr Boutros about the undertaking that he had given to pay $60,000 to Mr Vassili's solicitors and Mr Boutros said that he would personally "take care of it". The Respondent still proceeded with the settlement.

86 In relation to his failure to comply with the undertaking he gave to Nicopoulos & Associates to pay $60,000 for their client Mr Vassili, he said:

"At the time of sending the two letters dated 5 October 2006 to Nicopoulos & Associates, I understood from the Contract that the sale price of the property at 192 to be $635,000. Based on the previous correspondence from St George dated 10 August advising of the final payout figures ... I believed that there would be sufficient funds remaining from the sale and settlement of 192 to repay the $60,000 ... I was also aware from the sale of the previous units at Lots 9 and 11 of the Baltimore Street, Belfield properties that there were surplus moneys after those conveyances. This further lead (sic) me to believe that there would be sufficient funds from the sale of 192 to reply Mr Vassili."

87 He recited that there had been considerable correspondence and telephone conversations between him Mr Nicopoulos about the undertaking that was required. Nicopoulos & Associates refused to accept an undertaking given on behalf of the Boutros parties and required that the undertaking be given by the Respondent.

88 He said that after he became aware on the morning of settlement that Mr Boutros was making a rebate of $140,000, Mr Boutros:

"insisted that we draw the surplus funds of $31,357.21 from his Controlled Money Account for use in the payout for the mortgage with St George. As I believed that the funds belonged to the client, I had not [sic] choice but act as instructed by the client."

He did not indicate that he at any time considered that he should contact Mr Vassili or his solicitors, inform them of the situation, or seek to withdraw his undertaking.

89 The Respondent did not appear to recognise in that declaration any misconduct on his part. He said, "I believe that I was acting in good faith in relation to this matter and discharging my duties to my respective clients, both the vendors and purchasers in this matter" .

90 In his letter to the Law Society dated 3 September 2008, the Respondent stated (in part):

"In respond [sic] to 192 Burwood Road, Croydon Park and paragraph 3 of your letter:

"At the time when the undertaking was provided to Nicopoulos & Associates, I understood from the contract that the sale price of the property at 192 to be $635,000 and the contract has [sic] been assessed and stamped to the value of $635,000 by the Office of State Revenue. Based on the previous correspondence from the discharge mortgagee at St George advising of the final payout figures, I believed that there would be sufficient funds remaining from the sale and settlement of 192 to repay the $60,000 in accordance with the undertaking. I was also aware from the sale of the previous units at Lots 9 and 11 of the Baltimore Street Belfield properties that there were surplus monies after those conveyances. This further led me to believe that there would be sufficient funds from the sale of 192 to honour the undertaking. I therefore gave the undertaking to Nicopoulos & Associates in good faith truly believing that the promise can be kept.

"I can however categorically state that at the time of giving the undertaking, I had absolutely no knowledge that the sale of the property would only yield $495,000 on settlement. I only found out about this when Mr Boutros decided to unilaterally give a rebate of $140,000 to the purchaser, which came to light the day the before the settlement, 19 October 2006. Mr Boutros' actions resulted in a chain of events which placed me in a compromised position: I had made an undertaking to Mr Vassili (i.e. Nicopoulos & associates) that his debt would be sufficiently covered by the sale on the original contract price; I also had to arrange for some $31,000 from Mr Boutros' funds from a previous sale from the Controlled Monies account to be paid to St George to cover the shortfall - otherwise the sale would have been completely aborted. I would not deliberately state [sic] a falsehood to a fellow legal practitioner under any circumstance. I have sought to explain this as truthfully as possible in my statutory declaration dated 21 November 2006.

Subsequently, I note that the $60,000 was repaid to Mr Vassilli (via Nicopoulos & Associates) pursuant to the undertaking, when the conveyance was sent to Benjamin Khoury solicitors (whom I worked with to finalize the repeatedly stalled conveyance - where I acted for a related party), which was finally settled with Eurofund and other parties in a complicated marathon conveyance involving some 20 parties simultaneously on 23 December 2006 - events following on from my second statutory declaration dated 21 November 2006"."

91 In respect of this Ground, the Respondent stated in his Reply:

"That he was unable to honour his Undertaking to Messrs Nicopoulos & Associates and that he allowed his duties to his client to conflict in an unacceptable manner with his undertaking. He now appreciates that he acted in a manner which fell below the standards which are expected of him."

92 At the hearing on 30 March, 2011, Counsel for the Respondent stated that he admitted that he did not honour his undertaking, but said that it was because "as events transpired he was unable to". It was contended on his behalf that his conduct did not constitute either unsatisfactory professional conduct or professional misconduct.

However, at the hearing on 15 April 2011 and with the benefit of representation by Counsel, the Respondent admitted that he breached his undertaking. The Solicitor also stated that the sum of $60,000 was paid to Mr Vassili on 23 December from a Boutros sale settlement (three months after the original settlement date), but there is no evidence that he made any payment of interest.

93 In his cross-examination the Respondent said that he proceeded with the settlement of the sale of the property at Burwood Road knowing that he would not have sufficient funds to comply with his undertaking to pay $60,000 to Mr Vassili because Mr Boutros had told him,

"He'd fix up Mr Vassili ... at a later stage."

When it was put to him that he was prepared to put the interests of his client ahead of his professional obligations, he avoided the question. When he was directed to answer it, he conceded the proposition. He conceded that he knew about a month before he sent the front page of the Contract to Galilee Solicitors that the deposit was not going to be paid.

94 Accordingly, this ground is also established.

Ground 8: Unethical conduct: The Solicitor attempted to settle the sale of the property when he was on notice that the discharge of the mortgage to his client vendors from Eurofund (Australia) Pty Ltd, was unauthorised or a forgery.

95 We note that the reference to "the property" is to Lot 8 at 66-70 Baltimore Street, Belfield NSW.

96 Several properties owned by Mr & Mrs Boutros or by Mrs Boutros and Mr Boutros' cousin were the subject of second mortgage where the mortgagee was a company, Eurofund (Australia) Pty Ltd ("Eurofund"). Those properties included strata title units being Lots 8, 9 and 11 at 66-70 Baltimore Street, Belfield, and the property referred to earlier, 192 Burwood Road, Croydon Park.

97 Because of the failure of the Boutros family to repay loans from Eurofund, on 19 August 2005 Andrew Wily and David Anthony of Armstrong Wiley Chartered Accountants were appointed external administrators of Eurofund. In turn they instructed Mr Warwick Keay, solicitor, of WKA Legal Pty Ltd to act on behalf of the company against members of the Boutros family in order to recover the loans.

98 The Respondent was first instructed by Mr Boutros in about March or April 2006 in respect of the sale of Units 9 and 11. Those units were owned by Mrs Boutros and Mr Boutros' cousin. At that time the Respondent asked Mr Boutros to give him "details of his mortgagee including the relevant mortgage bank statements." Mr Boutros did not provide details for the Eurofund mortgage.

99 Rather, on that first occasion Mr Boutros provided the Respondent with a business card from Suncorp-Metway Ltd as a contact to obtain the necessary details about the mortgage and its discharge. The Respondent wrote to Suncorp-Metway Ltd and on or about Friday 14 April 2006 he received a letter from the Solicitors for Suncorp-Metway Ltd, Holman Webb. That letter confirmed the registered first mortgage over the Lots at Baltimore Street, Belfield and said it secured a sum of $4,162,000. It said:

"We are instructed that your client is in default under this facility". It also stated: "We are instructed that your clients have entered into contracts for the sale of Lots in the subdivision of 66-70 Baltimore Street, Belfield and that settlement of the sales will not proceed because the Second Mortgagee is refusing to grant discharges of the mortgage." It informed the Respondent that "Suncorp-Metway Ltd is seeking repayment of all facilities."

100 By a Deed of Agreement prepared by WKA Legal Pty Ltd, on 26 April 2006 the relevant members of the Boutros family agreed with Eurofund that the outstanding amounts totalled $614,500 and that this would be repaid by 2 instalments: $300,000 within 7 days and $314,500 within 2 months. Discharges of mortgage in respect of specified properties were to be provided on receipt of each such payment. The first instalment was paid within 7 days. The second instalment was not paid.

101 When the Respondent obtained a title search of the property at 192 Burwood Road, Croydon Park in June 2006, prior to preparing a contract, he became aware that registered on the title was a caveat by Eurofund. In late June 2006 he telephoned Mr Boutros and told him that he would need to go and talk to the caveators and "ask them to provide a Withdrawal of Caveat on or before the settlement, otherwise we cannot settle". The Respondent did not contact or attempt to contact Eurofund about a Withdrawal of Caveat.

102 A firm of solicitors from Parramatta acted for both purchasers. The contract for the sale of lot 11 to George Daoud is dated 18 August 2006. The Vendor's copy shows the price as $32,500 and a deposit of $1,000. The Purchaser's copy showed the price as $420,000 and so did the transfer. The purchaser's copy of the contract showed the deposit as $21,000. The settlement figures, show the price was $420,000, no deposit was paid and a deduction "Vendor allows Rebate $95,000".

103 The contract for the sale of lot 9 to Elias Daoud is dated 25 August 2006. The Vendor's copy shows the price as $32,500 and a deposit of $1,000. The Purchaser's copy showed the price as $420,000 and so did the transfer. The purchaser's copy of the contract showed the deposit as $21,000. The settlement figures, show the price was $420,000, no deposit was paid and a deduction "Vendor allows Rebate $95,000".

104 The alleged vendor finance of $95,000 on each Lot is referred to in the settlement figures as, "Vendor allows rebate $95,000", and there is no evidence that there was any documentation of any loan by the vendor to either of the purchasers.

105 In a statutory declaration of 20 November 2006 the Respondent provided to the Law Society, he offered an explanation for some of these discrepancies.

"23 In relation to Lot 9 the property was legally transferred for $420,000 and the stamp duty was paid on this full amount. Mr Boutros instructed me that he and the purchaser had privately agreed between themselves that the vendor would loan to the purchaser $95,000 which was adjusted in the settlement figures so that the amount due on settlement was $325,460.66. (Copies of the transfer, front page of contract of sale, settlement statement and cheque directors are annexed at Annexure J.)

"24 In relation to Lot 11, the property was legally transferred for $420,000. In this case the purchaser was a first home buyer and was exempted from paying stamp duty. Mr Boutros again instructed me that he and the purchaser had privately agree between themselves that the vendor would loan to the purchaser $95,000 which was adjusted in the settlement figures so that the amount due on settlement was $325,474.58. (Copies of the transfer, front page of contract of sale, settlement statement and cheque directions are annexed at Annexure K.)"

106 The Respondent says that title Searches for Lots 9 and 11 were not obtained until 5 September 2006, and it was then that he became aware that there was a second mortgage to Eurofund, protected by a caveat. Not long after receiving the title searches the Respondent wrote to the first mortgagee, Suncorp-Metway Ltd about the proposed discharge of the first mortgage. He did not write to Eurofund. He telephoned Mr Boutros and asked him to provide details of the second mortgagee. Mr Boutros told him, "I have fully repaid the debt on that mortgage already. You don't have to worry about it." The Respondent asked him, "Where is the discharge document?" to which Mr Boutros replied, "I will bring it to you when you need it."

107 The Respondent's evidence is that after this conversation, notwithstanding Mr Boutros's statement, "I will bring it to you when you need it" , the Respondent and his secretary each spoke to Mr Boutros by phone several times asking for more information about Eurofund, including contact details.

108 On one occasion Mr Boutros told the Respondent by telephone that he had instructed another solicitor to organise a discharge and negotiate with Eurofund. He later attended the Respondent's office, apparently in about mid September, and gave the Respondent a copy of a letter dated 21 July 2006 from WKA Legal to Greg Smith, Solicitor, a solicitor who had been acting for Mr Boutros in relation to a proposed sale of Lots 7 and 10 at 66-70 Baltimore Street, Belfield. That letter advised that WKA Legal was acting for Eurofund in relation to the Boutros mortgage(s) and stated among other things:

"We refer to your letter of 18 July 2006 addressed to Eurofund (Australia) Pty Ltd.

"Our client denies that your clients have any entitlement whatsoever to damages against our client.

"Dispute [sic] your assertions and contentions, our client was and is entitled to refuse to release its securities or any part thereof unless the debt thereby secured was repaid in accordance with its terms.

"Notwithstanding our client's above rights our client accommodated your client by entering into the Deed of Agreement which it did on 27 April 2006.

"We note your client has complied in part with the Deed but is in breach by failing to make the final payment under the Deed on or before 27 June 2006.

"In consequence thereof our client has exercised its rights under the Deed and has lodged further Caveats on your clients' properties and entered Default Judgement against your clients in accordance with and in the amount specified in the Deed.

"Could you please immediately advise when your clients propose to discharge their obligations pursuant to the Deed.

"In the meantime please note we are waiting on instructions from our client in relation to enforcing its rights under the Deed which it may do without further reference to you or your clients."

109 Mr Boutros also provided the Respondent a copy of the front page of a contract for sale of Lot 10. The document is dated 20 October 2005 and shows the following information:

Price $385,000

Deposit $ 38,500

Balance $346,500

110 The Deposit had been altered to a figure of $19,250 and the balance had been altered to a figure of $360,750.

111 The evidence of the Respondent is that when Mr Boutros brought those documents to him, "he reassured me that he has [sic] discharged the mortgage to Eurofund and instructed me he will provide the discharge document at settlement" .

112 Although the letter of 21 July from Eurofund's solicitor made it clear that it would not execute a Discharge of Mortgage unless the full balance of its debt were paid, the Respondent's evidence is, "having seen the correspondence between Mr Smith and WKA Legal and the contract, I accepted Mr Boutros' instructions that Mr Smith had in fact handled and resolved the Discharge of Mortgage with Eurofund."

113 On 13 September 2006 the Respondent wrote to Suncorp-Metway, the first mortgagee about partial discharges of its mortgage for the sale of lots 9 & 11. In that letter he stated that the value of each lot was $300,000, although on his evidence before us he knew each lot had been sold for at least $325,000. The letter also stated a value of $470,000 for 192 Burwood Road, Croydon Park, but at the time he was already acting on the sale of the property and the contract showed the sale price as $635,000.

114 On 14 September 2006, a contract was entered into for the sale of Lot 8 to Farag and Juliette Daoud. The solicitors acting for them on the transaction was the same firm that had acted for Elis Daoud on the purchase of Lot 9. The price in the vendor's copy of the contract was $325,000 and the deposit was $1,000. The price in the purchaser's copy of the contract apparently for $420,000 and the Transfer showed the consideration at $420,000.

115 On 22 September 2006 the Respondent received a facsimile from McGrath Nicol & Partners advising that J.P. Cronin and J.T. Hayes had been appointed as Receivers and Managers of "certain property of Charlie Boutros" including Units 8, 9 and 11. It requested various lease documentation in relation to a property at Strathfield. It asked the Respondent to provide the information by facsimile. It does not appear that the Respondent replied to the facsimile and, in particular, there is no evidence that he informed the Receivers about the sales proposed.

116 Settlement of the sale of Lots 9 and 11 was eventually arranged for 26 September 2006 at 2.30pm. The settlement figures showed the purchase price as $420,000, a nil deposit and also showed a reduction described as "Vendor allows rebate $95,000."

117 It was not until midday of that day that Mr Boutros attended the Respondent's office and provided him with a discharge of the Eurofund mortgage for each of Lots 9 and 11.

118 The Respondent in a statutory declaration of 20 November 2006 provided to the Law Society said,

"I inspected both of these documents which identified 'Eurofund (Australia) Pty Ltd' as the mortgagee with the mortgage No. AA975522, which corresponded with the mortgage reference number contained in the two titled [sic] searches of the respective Lots 9 and 11. The two documents were duly executed and witnessed. I kept a photocopy of these two Discharges of Mortgage documents. I did not have any reason to suspect that these documents given to me by Mr Boutros were in any way forged or not genuine."

119 However, the documents on the face of it were not duly executed and there was reason for the Respondent to be concerned that the documents were not valid or were forged. Some of those reasons were:

"1. His knowledge of Mr Boutros' desperation to complete the sales; The fact that he asked Mr Boutros in March or April to provide in respect of lots 9 and 11 "details of the mortgagee including the relevant mortgage bank statements" and he did not do so in relation to the Eurofund mortgage for about 5 months;

2. His knowledge of previous conduct of Mr Boutros, particularly contracts for sale of land with false information in them such as price and deposit, unwritten arrangements for loans and "rebates" by the vendor, discrepancies between the purchaser's and the vendor's versions of contracts, and two sales where purchasers willingly agreed orally to overstate the purchase price in the purchaser's contract and one consequently paid higher ad-valour stamp duty on the contract than if the correct price were stated;

3. Suspicion that because in the weeks before the contract the proposed sales were at only $470,000 and $495,000, the sale for $635,000 of the property at Croydon Park was also subject to an as yet undisclosed unwritten agreement involving a reduction in price or an undocumented vendor loan or a vendor "rebate";

4. The Respondent had seen the letter of 12 April 2006 from the Solicitors for Suncorp-Metway and the letter of 21 July 2006 from WKA Legal Pty Ltd, both indicating that the second mortgagee, Eurofund, did not propose to provide any discharge or partial discharge of its mortgage or withdrawal of caveat;

5. The evidence of the Respondent appears to be that the only evidence he had to suggest there had been any change in that position was the word of Mr Boutros.

6. He did not have any document from the solicitor Greg Smith or from any other source to corroborate allegations of Mr Boutros that the Eurofund debt had been paid and the mortgage discharged.

7. The mortgagee was a company, but the discharge documents were not executed in the manner required for execution by or on behalf of a company. There was no indication that the discharges had been executed by the authority of the company or its directors or a receiver, manager or administrator;

8. The execution was in the form of a single signature without a title or description and the signature of a witness plus in handwriting the witnesses' name ("George Koovosis") and address. On one the address appears to be "18 Gross St Parramatta NSW 2150"and on the other it appears to be "16 Gross St Parramatta NSW 2150"; and

9. The writing of the date, the name of the witness and the address of the witness on each of the discharges was almost childlike. It did not appear to be the writing of someone who regularly writes on commercial documents."

120 The sales of Lots 9 and 11 were completed by the Respondent on 26 September 2006 using the discharge documents provided by Mr Boutros that morning. Those documents were forgeries and were not authorised, or executed, by or on behalf of Eurofund, but the Respondent was not informed of this until later.

121 The Respondent received a letter dated 11 October 2006 from McGrath Nicol & Partners advising that J.P. Cronin and G.D. Hayes had been appointed Receivers and Managers of property of Mr & Mrs Boutros pursuant to a mortgage, including their interest in Lot 8 at 66-70 Baltimore Street, Belfield. The letter was signed by a Mr J.P. Cronin, the Receiver and Manager and he said:

"Following my appointment pursuant to the mortgage for the properties, the mortgagors' right to deal with the properties has ceased.

"Accordingly, your clients have no right or entitlement to collect any moneys for rent or for any other purpose in relation to the properties. Any moneys collected by your client since my appointment are to be forwarded to my office."

122 The letter concluded later with the words, "Should you have any queries regarding this matter, please contact Mr Appleby on telephone No. [phone]". The Respondent did not reply to that letter. The appointment was by Suncorp-Metway Ltd pursuant to its mortgage. The Respondent said that he took the view that because he was negotiating a payout figure for Suncorp-Metway Ltd for the settlement of the sale of Lot 8, he did not need to respond or provide information in response to the letter of 11 October 2006.

123 The Respondent's evidence is that meanwhile:

"Based on the previous two settlements and the production of the Discharge of Mortgage documents for Lots 9 and 11 in September 2006 ... I expected Mr Boutros to again provide me with a discharge document from Eurofund for Lot 8. As part of the normal routine in the lead up to settlement, my legal secretary, Ms Huo contacted Mr Boutros for the discharge document."

124 The Solicitor obtained a title search of Lot 8 on 18 October 2006 and that revealed that the property was subject to a second mortgage to Eurofund protected by a caveat. The Respondent said in his affidavit:

"A contract of sale was drawn up in relation to Lot 8. The final purchase price was negotiated at $420,000 and the stamp duty payable was on this amount. Mr Boutros again entered into a private agreement with the purchaser to loan him back $95,000, which would be re-adjusted in the settlement figures."

125 The Respondent arranged settlement of the sale of Lot 8 to take place on 3 November 2006. On 2 November 2006, the Respondent received a telephone call from a male person. His evidence was that " the person identified himself only as 'Warwick' and said that he acted for Eurofund." The caller told the Respondent that Eurofund had not given authority for the discharge of the mortgage for Lots 9 and 11. The Respondent's evidence is, "I was quite shocked by his remarks and could not comprehend what he was saying. As I did not know where he was from, I asked him to put it writing to me."

126 That day the Respondent received a letter by facsimile from WKA Legal Pty Ltd. It referred to the sale of Lot 8 and the letter stated:

"We act for Eurofund and are advised that your clients have sold Unit 8 of 66-70 Baltimore Street, Belfield and settlement of the sale has been booked for 3.00pm on Friday 3 November 2006.

"At no time have we or our client been approached by anyone on behalf of your clients to advise us of the settlement or sought to make appropriate arrangements for the provision by our client of a discharge of its mortgage over the above property.

"We note that your client has sold Lots 9 and 11 of 66-70 Baltimore Street, Belford and at the settlement of those sales forged Discharges of our client's mortgages over those titles were provided presumably to the purchasers. In other words those sales proceeded without out client's knowledge or consent.

"We put you and your client on notice that our client has not authorised or executed any Discharge of Mortgage in respect to Lot 9, 66-70 Baltimore Street, Belfield that is due to settle on 3 November 2006. If you and your client attempt to settle the matter with a Discharge of Mortgage that is not expressly (in writing) authorised by us then our client will hold you and your clients liable in damages.

"Could you please advise us as soon as possible of your client's proposal in relation to discharging our client's mortgage in its entirety.

"Could you please also confirm that the settlement booked for the sale on 3 November 2006 has been cancelled."

127 The Respondent knew that WKA Legal Pty Ltd was the firm that had written the letter of 21July 2006 to Greg Smith (a copy of which he had received in September from Mr Boutros) and that that letter was written on behalf of Eurofund.

128 The Respondent did not telephone WKA to discuss the allegations in the letter of 2 November. He says that he immediately telephoned Mr Boutros and told him of the contents of the letter. He says that Mr Boutros responded:

"I don't owe Eurofund any money. I originally borrowed around $500,000 and I already repaid them an amount totalling $800,000. George [surname indistinct] at Parramatta have lent me money to pay off Eurofund and Eurofund have given George all the Discharge of Mortgage documents. Actually, I don't think I owe them any more money. In fact they are now bankrupt and is under the control of an administrator. They don't have any right to make as mortgagees. If you don't believe me, check for yourself."

129 The Respondent says that he told Mr Boutros, "Bring me whatever document you have between Eurofund and yourself as to what sort of arrangement you have."

130 The Respondent does not say that he was surprised or concerned that contrary to previous clear assertions by Mr Boutros that the whole of any monies payable to Eurofund had been paid. Mt Boutros had expressed some ambivalence in saying "Actually I don't think I owe them any more money." It is obvious that that statement should have caused concern by the Respondent that the whole of the moneys owing might not have been paid, and the discharges might not be authorised and might be forged.

131 The Respondent's evidence is that later at about 5.30pm Mr Boutros came to his office and discussed the matter. He again said that Eurofund was "bankrupt and don't exist anymore". The Respondent then had his secretary carry out a search of the ASIC on-line in relation to the company. That search revealed that since 19 August 2005 that company had been under external administration. It is clear that the discharge documents that the respondent used at the settlement on 26 September, which the Respondent had since been informed were forgeries and not authorised by Eurofund, did not purport to be executed by or with the authority of the company, its directors, an administrator or administrators or a receiver or receivers.

132 The Respondent did not reply to the letter he had received that afternoon from WKA Legal Pty Ltd or attempt to contact them to dispute their claims, to seek further information or to respond to their requests.

133 The Respondent says he then asked Mr Boutros who the administrator was. Mr Boutros apparently did not respond to that question and then telephoned a person he referred to as "George" and said, "George, you've got all the mortgage discharge documents from Eurofund right? I need to get it from you. Because my solicitor wants it for the settlement ... ah, so your solicitor has got it? ... they have organised, already arranged the Discharge of Mortgage? ..." The Respondent says that he then interjected and said, "Have they lodged the Discharge of Mortgage at the LPI [Land Property Information] already or are they still holding it in their office? As solicitors they are usually busy and they may still be holding the document themselves. Can you go and check with them? We don't have much time left."

134 The Respondent says that Mr Boutros then said on the telephone, "George, I'll come and see you". Mr Boutros then ended the telephone call and left, telling the Respondent that he was going "to see George". The Respondent impressed upon Mr Boutros the urgency of getting the original Discharge of Mortgage document.

135 The name shown for the witness on the forged discharges is "George Koovosis". The Respondent had copies of them. The Respondent does not say that at any time on 2 or 3 November he read the disputed documents or contemplated that "George" to whom Mr Boutros spoke by telephone, might be the same person who purportedly witnessed the forged discharges.

136 On 3 November 2006 Mr Boutros again attended on the Solicitor's office and delivered to him a copy of a record of ASIC notifying of the appointment of David Anthony Hurst as a joint administrator in respect of the company Eurofund (Australia) Pty Ltd. The date of the appointment was 19 August 2005. The Respondent then knew that the appointment occurred before the date of the alleged forged discharges, and knew the disputed discharges did not purport to be executed by, or by authority of, any administrator.

137 On 3 November Mr Boutros brought with him to the Respondent's office a bundle of documents that the Respondent said, "appeared to be original Discharge of Mortgage documents". Mr Boutros pointed to one of them, which was for Lot 8, and the Respondent says he observed that it was a faxed document because of a date/time stamp at the top. The respondent has annexed copy of the document to his affidavit. The Respondent says that he instructed Mr Boutros that he could not use the faxed copy and he would need to have the original. He asked him to deliver it to his office by 1pm and otherwise to take it to the city and meet the Respondent at the settlement location. He told him, " Call me on my mobile when you get to the city". His evidence is that Mr Boutros agreed to get the original.

138 It should be noted that the copy of the document provided by the Respondent did not indicate that it was executed by, or by authority of, any administrator or receiver. The execution is different to that of the documents provided by Mr Boutros to the Solicitor on 26 September 2006 in that there is an attestation clause:

"Certified correct for purpose of the Real Property Act, 1900 and executed on behalf of the corporation named below by the authorised person whose signature appears below pursuant to the authority specified.

Corporation: Eurofund (Australia) Pty Ltd ACN103899761, Authority: Section 3127 of the Corporations Act, 2001"

139 That is followed by a signature and below it the words "Sole director/secretary". Although the form provides for the name of the authorised person to be provided below the signature, no name is provided in the document.

140 The Respondent apparently did not recognise any reason for concern about the validity of the execution of the document or the possibility that it was a forgery. He did not contact WKA Legal Pty Ltd or Eurofund.

141 Mr Boutros did not return to the Respondent at his office that day. The Respondent went to the city. At 3pm he attended the settlement appointment and met with a person representing Suncorp-Metway. Mr Boutros did not arrive and then Mr Warwick Keay, the solicitor for Eurofund, approached the Respondent and informed him that Eurofund had not authorised the discharge of the mortgage over the Belfield Street units and that the discharges of mortgages over Lots 9 and 11 were forgeries. The settlement did not proceed.

142 The Respondent's evidence as to the conversation when Mr Keay arrived was that Mr Keay told him, "Our client has never given authority for the Discharge of Mortgage in any of the matters. In fact the settlement for Lots 9 and 11 Baltimore Street, Belfield was effected with a forged document". He briefly showed the Respondent the two mortgage discharge documents. The Respondent said, " Well, I suppose I have to take your word for it because I have no way of knowing if this is your client's signature or not ". The Respondent's evidence then is:

"58 Mr Keay became quite animated and aggressive in his manner ... because of this I was quite in shock and embarrassed.

59 At the beginning of our discussions, I briefly showed Mr Keay the papers I had brought for the settlement. He made notes of the details of the purchasing parties including the settlement cheques requested, and the settlement instructtion sheet. I said, 'In that case there is a problem with the previous settlement. I suppose we have to cancel the settlement today until everything can be verified.'

60 Together we then went and spoke to the purchasers' solicitors and the representative for the incoming mortgagee and advised them that the settlement has [sic] to be cancelled.

61 It was at this time that Mr Keay asked again to look at my documents. I was not prepared to show him my papers any further. I also thought I had a duty to my client to ensure his confidential materials were not publicly divulged.

62 He then became more aggressive and said, 'I'm going to call the Police to come here'. I then said, 'I understand that Eurofund is under administration and an administor has been appointed to look after the company's affairs. You are not acting for the Receiver, are you?"

63 Mr Keay was taken aback and did not respond. I then said, 'If your client is in liquidation only the Receiver will have the proper authority to deal with any mortgagees who may have an interest in the property. You must provide me with a copy of the alleged forged document in the earlier matter and I'll get some instructions in that regard'.

64 Mr Keay again did not respond. I then left without any further discussion with him."

143 File notes prepared by Mr Keay and his assistant, Nicole Vastas, who accompanied him that day to the settlement appointment, are attached to the Affidavit of Mr Gore. The contents of those file notes were not challenged and we prefer those versions to the extent that they contradict the version of the Respondent. Their evidence is that at the settlement appointment Mr Keay and Ms Vastas went to the settlement rooms and spoke with the officer representing Suncorp-Metway. The Respondent and a representative for the solicitors for the purchasers were there. The Respondent approached and the following conversation occurred:

Mr Keay: I am Warwick Keay from WKA Legal and I act for Eurofund. You are holding a forged Discharge. Eurofund did not authorise the execution of any Discharge that relates to Lot 8

Respondent: I require evidence that the Discharge I hold is not authorised by Eurofund.

Mr Keay: We are here to advise that our client did not authorise the release of Lot 8 and the Discharge you are holding is in fact a forgery.

Respondent: The debt to Eurofund was paid in full and the company went into liquidation and our client was dealing directly with Eurofund.

Mr Keay: No, the debt to our client is not paid in full. Can I see the Discharge that you hold?

Respondent: This is my client's file and I cannot show you the Discharge.

Mr Keay: But you were in a position to hand the Discharge over to the purchaser. This is now a matter for the Police.

Respondent: As this is a serious matter, we'd better cancel the settlement.

144 During the conversation the Respondent was holding his mobile phone. After the conversation he waited for a while and then left the premises.

145 The Respondent says that he did not attempt to settle the sale using a forged Discharge of Mortgage. The argument is that his conduct did not amount to an attempt to settle and he did not have a Discharge of Mortgage available and did not know that the Discharge, if it had been provided, would be a forgery.

146 It is clear that when the Respondent went to the city, he had already arranged for Mr Boutros to attend at the appointed place for the settlement and bring the original Discharge of Mortgage with him. It is clear that the purpose of the Respondent's attendance at that place was to settle the transaction using the Discharge of Mortgage he had asked Mr Boutros to provide.

147 It is clear that if Mr Boutros had provided the Discharge and the settlement had not been interrupted by Mr Keay, the Respondent would have proceeded to settle the matter.

148 Although the Respondent says that he did not know that the Discharge of Mortgage, if it had been provided, would be a forgery, we find that it is more likely than not that he did believe that if the original was provided, it would probably be a forgery. If we are wrong about that, the evidence certainly establishes that he did not care whether the document was valid or invalid or was a forgery. He did not take the time or trouble to put his mind to that issue. He seemed to just avoid it. Regardless of whether he knew that the document would be a forgery or just did not care whether it was, his conduct constituted an attempt to settle the matter on notice that the Discharge of Mortgage was unauthorised or a forgery. It was clearly unethical conduct.

149 In cross-examination on these matters, the Respondent presented as a very unreliable witness. He was often evasive and prevaricated. He volunteered unresponsive statements instead of answering questions. Even after a caution from the Presiding Member about evasion, the Respondent continued in his cross-examination to avoid questions.

150 In cross-examination, the Respondent conceded that if he had attended the settlement and Mr Boutros had provided a Discharge of Mortgage that looked genuine and was not challenged, he would have settled the sale. When it was put to him that the reason he attended the settlement appointment was in the expectation of Mr Boutros being there and providing the document and the matter then being settled, he avoided the question. When it was put to him a second time he said, "I don't know. I don't know whether I would or wouldn't settle" . When asked why he went to the settlement location at the appointed time, he avoided the question. When it was repeated, he said, "I would go and see what would happen" . He conceded that settlement was a possibility.

151 Then when he was asked whether he would have settled the sale if Mr Boutros had turned up with the Discharge of Mortgage and no-one from Eurofund attended, he avoided the question. When it was repeated, he said, "I wouldn't have settled". When asked why not, he said, "Because at that time there were too many issues. I don't even know what I should or shouldn't do." When asked why he should not have cancelled the appointment once Mr Boutros provided only a faxed copy of a Discharge, he said, "It would not be appropriate to cancel it because Mr Boutros says he's still coming up with documents - an original of the Discharge of Mortgage". Then he retreated from his previous evidence and said that if Mr Boutros had brought the original Discharge of Mortgage there was only a "possibility I would not have settled" . But subsequently when the inconsistency was drawn to his attention he reverted to his previous answer, "I wouldn't have settled".

152 When he was asked why he went to the settlement room if he was not going to settle the matter, he answered, "To find out exactly why settlement didn't take place". But when it was drawn to his attention that he knew why it would not settle, he was asked again why he went, he said, "Mr Boutros was pressuring me right up to the end". He said that Mr Boutros was "very imposing, intimidating". He said that he made threats - not physical. He said that Mr Boutros came in on numerous occasions to the office "to direct me to do this or do that and said if I didn't help him to do this or that then he would be in a lot of trouble and lose everything".

153 But later in his cross-examination he conceded that he went to the settlement appointment with the purpose of settling the sale. He conceded that in discussions he had on arrival at the appointment for settlement and the checking of documents and cheques, was all part of the settlement procedures.

154 The evidence establishes that the Respondent attempted to settle the sale of the property when he was on notice that the discharge of the mortgage to Eurofund was unauthorised or a forgery. It was only in cross-examination that the Respondent first alleged that he had asked Mr Boutros about the allegations of the discharges of the mortgage on Lots 9 and 11 being forgeries. He only did this when it was put to him:

"You didn't want to ask Boutros about the allegations of forgeries?"

and he replied,

"I did he said 'There's nothing wrong with those discharges'."

He said he was very concerned when a fellow practitioner notified him that the discharges were forgeries. When it was put to him that instructing Mr Boutros then to get the Discharge of Mortgage to him for Lot 8 was dismissing Mr Keay's information that any discharge of the mortgage was a forgery, he said,

"I didn't sincerely believe that what Mr Keay was saying was true. I thought he was lying." He conceded that he did not say that he would check with the Administrator of Eurofund...

It didn't cross my mind because the timing was very tight."

He did not offer any evidence capable of establishing that there was any reasonable basis for him believing the Mr Keay was lying. We do not accept his evidence that he thought Mr Keay was lying.

155 The Respondent conceded that when he realised that the purchaser was paying substantially less than the purchase price in the contract, he did not see that there was a problem with that or that there was anything wrong with it. He denied that it was misleading to not tell Galilee Solicitors of a change in the purchase price.

156 At the end of his cross-examination on 15 April 2011 the Respondent said that the hearing had been his:

"first opportunity to speak in front of real people. My writing is not good. In the past I only have opportunities to put it in writing. I attempted to settle without the Tribunal. I don't think I've handled the case well.

"It's been five years and every day every week it's been on the back of my mind. The past year I've had problems concentrating at work. Back in 2006 I had some hope that the Law Society would not pursue this.

"I've lost my focus. Mr Boutros is a very complicated client. I have never had experience of people like him before. Most of my clients are Mums and Dads of the suburbs. Mr Boutros' Lebanese culture and background - I find it difficult dealing with him. I don't know how I got myself into this hole."

157 He claimed he had ceased contract with Mr Boutros since the visit of Mr Gore. But the material in his declaration of 20 November 2006 discloses that he had "in the last couple of weeks" been acting for Mr Boutros in another matter notwithstanding:

• his knowledge that Mr Boutros had provided him with forged discharges and had not provided a genuine discharge to permit the sale of lot 8 to be completed,
• his stressful interactions with M Boutros when he had previously acted for him,
• his awareness that Mr Gore had already commenced investigations of the complaint that he attempted to settle the sale of lot 8 when on notice that any discharge would be unauthorised or a forgery; and
• Mr Gore had attended his practice reviewed the relevant files and interviewed him on 17 November about the complaint.

158 In that context he had not yet decided to refuse to act in any matter for Mr Boutros or on his instructions.

159 When he was asked questions about the requirements for the valid execution of the relevant Discharges of Mortgage, his evidence was confusing and somewhat contradictory. He was asked whether it occurred to him that the witness to the Discharges for Lots 9 and 11, George Koovosis could be the "George" that Mr Boutros spoke to by telephone in his presence. He said it did not, "not at that time". He was asked whether it does now, and he said, "It's possible".

160 His responses to questions about the legal effect of the appointment of Receivers and Managers of the interest on Mr & Mrs Boutros in Lot 8 were confused or inadequate. Similarly, there were concerns about his responses to questions about him obtaining instructions from Mrs Boutros and the cousin of Mr Boutros in relation to their interests in the various properties. Indeed, his evidence seemed to be that he did not meet Mr Boutros' cousin (a female). He spoke of not having met "him". He conceded that he had had no written authority from the cousin. Then when asked how he obtained instructions from her, he said that it was done by telephone, "She phoned me up".

161 In re-examination the respondent said that since the investigation the Law Society has made 10 visits to his office at irregular intervals and requested responses to questions.

162 Referring to the investigations and the proceedings against him he said:

"I believe in 'do the wrong; and serve your time'. This is like a cat and mouse game where you are - where you are not killed but played around with. I just wanted to have closure; one way or another."

UNSATISFACTORY PROFESSIONAL CONDUCT AND PROFESSIONAL MISCONDUCT

163 Sections 496, 497 and 498 of the Legal Profession Act 2004 provide:

496 Unsatisfactory professional conduct

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 .

497 Professional misconduct

(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, and

(b) conduct of an Australian legal practitioner whether occurring in connection with the practice of law or occurring otherwise than in connection with the practice of law that would, if established, justify a finding that the practitioner is not a fit and proper person to engage in legal practice .

(2) For finding that an Australian legal practitioner is not a fit and proper person to engage in legal practice as mentioned in subsection (1), regard may be had to the matters that would be considered under section 25 or 42 if the practitioner were an applicant for admission to the legal profession under this Act or for the grant or renewal of a local practising certificate and any other relevant matters.

498 Conduct capable of being unsatisfactory professional conduct or professional misconduct

(1) Without limiting section 496 or 497, the following conduct is capable of being unsatisfactory professional conduct or professional misconduct :

(a) conduct consisting of a contravention of this Act, the regulations or the legal profession rules ,

(b) charging of excessive legal costs in connection with the practice of law,

(c) conduct in respect of which there is a conviction for:

(i) a serious offence , or

(ii) a tax offence , or

(iii) an offence involving dishonesty,

(d) conduct of an Australian legal practitioner as or in becoming an insolvent under administration ,

(e) conduct of an Australian legal practitioner in becoming disqualified from managing or being involved in the management of any corporation under the Corporations Act 2001 of the Commonwealth,

(f) conduct consisting of a failure to comply with the requirements of a notice under this Act or the regulations (other than an information notice ),

(g) conduct of an Australian legal practitioner in failing to comply with an order of the Disciplinary Tribunal made under this Act or an order of a corresponding disciplinary body made under a corresponding law (including but not limited to a failure to pay wholly or partly a fine imposed under this Act or a corresponding law ),

(h) conduct of an Australian legal practitioner in failing to comply with a compensation order made under this Act or a corresponding law .

(2) Conduct of a person consisting of a contravention referred to in subsection (1) (a) is capable of being unsatisfactory professional conduct or professional misconduct whether or not the person is convicted of an offence in relation to the contravention.

CONCLUSIONS

164 We are satisfied that each of the established Grounds evidence a substantial failure by the Respondent to reach or maintain a reasonable standard of competence and diligence as a solicitor. Diligence, of course, involves maintaining ethical standards.

165 The clients, the public, other members of the profession and the courts are entitled to expect a solicitor to be a person of honesty and integrity and to conduct himself in an ethical manner, exercising all due competence, diligence and care. However, the Respondent failed in each of these grounds to achieve a reasonable level or competence and diligence. We are satisfied that his conduct in relation to each of the established grounds was unethical.

166 Further, in relation to Grounds 1 to 4 (inclusive), we are satisfied that the Respondent's conduct constituted a contravention of requirements of the Legal Profession Act 2004, including breaches of section 253(1), section 254(1), section 255(1), section 256, section 260(1) and section 674(1).

167 In addition, we are satisfied that the Solicitor's conduct in relation to Grounds 1, 3, 5, 6, 7 and 8 also involved his misleading others and/or acting dishonestly.

168 We find that the Respondent is guilty of professional misconduct with respect to each ground.

169 We have formed a view that the orders sought by the Applicant might not be sufficient to adequately protect the public and the reputation of the profession. We conclude that we should consider more serious sanctions, including considering whether the Respondent is not a fit and proper person to be engaged in legal practice and should be removed from the roll.

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Decision last updated: 13 February 2012