Administrative Decisions Tribunal New South Wales

• Medium Neutral Citation: Council of the Law Society of NSW v Pizzinga [2012] NSWADT 211
• Hearing dates: 9 July 2012
• Decision date: 16 October 2012
• Jurisdiction: Legal Services Division
• Before: M Chesterman, Deputy President; J Currie, Judicial Member; R Fitzgerald, Non-Judicial Member

Decision

1. The Respondent is guilty of professional misconduct and of unsatisfactory professional conduct as detailed in these reasons.

2. The name of the Respondent is to be removed from the Roll of local lawyers.

3. The Respondent is to pay the costs of the Applicant as agreed or assessed.

• Catchwords: Solicitor - disciplinary application - misappropriation - provision of misleading documents - misleading investigator -breach of trust account requirements - delay - failure to disclose costs - whether removal from Roll warranted
• Legislation Cited: Administrative Decisions Tribunal Act 1997; Legal Profession Act 2004; Legal Profession Regulation 2005
• Cases Cited: Allinson v General Council of Medical Education and Registration [1894] 1 QB 750; Brereton v Legal Services Commissioner [2010] VSC 378; Council of the Law Society of New South Wales v Clapin [2011] NSWADT 83; Council of the Law Society of NSW v Doherty [2010] NSWCA 177; Council of the Law Society of New South Wales v Simpson [2011] NSWADT 242; Dawson v Law Society of New South Wales, Unreported, Court of Appeal, 21 December 1989; Dupal v Law Society of New South Wales, Unreported, Court of Appeal, 26 April 1990; Law Society of New South Wales v Jones, Unreported, Court of Appeal, 29 July 1978; Law Society of New South Wales v Moulton [1981] 2 NSWLR 736; Peters v R (1998) 192 CLR 493; Prothonotary of the Supreme Court of New South Wales v Liverani [2012] NSWCA 325; A Solicitor v Council of the Law Society of New South Wales (2204) 216 CLR 253; [2004] HCA 1; Stanoevski v The Council of the Law Society of NSW [2008] NSWCA 93; Ex parte Tziniolis; Re The Medical Practitioners Act (1966) 67 SR (NSW) 448
• Category: Principal judgment
• Parties: Council of the Law Society of New South Wales (Applicant); Vincent John Pizzinga (Respondent)
• Representation: Counsel; C Birch SC (Respondent); C Groenewegen (Applicant); Cradock Murray Neumann (Respondent)
• File Number(s): 112022

decision

The Application instituting these proceedings

1 In an Amended Application for Original Decision filed on 4 May 2012, replacing an Application filed on 16 May 2011, the Council of the Law Society ('the Law Society') claimed that Vincent John Pizzinga, a solicitor (hereafter 'the Solicitor'), had engaged in professional misconduct. The Amended Application set out a number of Grounds for this claim, together with supporting Particulars.

2 The orders sought in the Amended Application were:-

1. That the solicitor's name be removed from the Roll.

2. That the solicitor pay the Costs of the Applicant as agreed or assessed.

3. Such further and other Order as the Tribunal deems appropriate.

3 Subject to deletion of some identifying details, the Grounds of the Amended Application and the accompanying Particulars were in the following terms:-

GROUNDS FOR APPLICATION (INCLUDING PARTICULARS)

Vincent John Pizzinga, while practising as a Solicitor, was guilty of Professional Misconduct. The Solicitor:

1. Misappropriated trust funds

2. Intermingled trust funds

3. Provided to the Trust Account lnvestigator and to a third party trust account statements or trust ledgers that did not disclose the true position in respect of trust monies

4. Misled the lnvestigator on numerous occasions during his investigation

5. Breached Sections 255(1), 259(1), 260, 262(1)(a), 261(1)(b), 264(2)(a), 264(2)(b) and 674 of the Legal Profession Act, 2004 ['the Act']

6. Breached clauses 68(4), 69(4), 70(9), 88(2), 88(3), 88(4) of the Legal Profession Regulation 2005 ['the Regulations']

7. Breached Rules 12 and 34 of the Revised Professional Conduct and Practice Rules 1995 ['the Rules']

8. Delayed the Cremen matter

9. Failed to disclose his costs

10. Failed to provide an itemised bill for costs to Mr Cremen for a period of 4 months

PARTICULARS

In these Particulars:-

"The Society" means The Law Society of New South Wales

"The solicitor" means Vincent John Pizzinga

"The lnvestigator" means Ronald Dunlop employed by the Society's Trust Accounts Department who prepared a report dated 20 October 2010

"Trust Account" means Account... in the name of Pizzinga & Associates Solicitors Trust Account which is used for the law practice

"Tax Trust Account" means Account... in the name of Vincent John Pizzinga Tax Trust which is used for the solicitor's tax accounting practice

"Overdraft Account" means Account... in the name of Vincent John Pizzinga Overdraft Cheque Account. This account has a variety of uses including as the law practice's office account, as a general tax accounting account, for margin calls on share trading and for personal banking

"Anvin Account" means Account... in the name of the solicitor's private company Anvin Pty Ltd

"Comsec Margin Loan Account" means Margin Loan Account... with Commonwealth Securities in the name of Vincent J & Angela Pizzinga

"ANZ Investment Lending Account" means ANZ Investment Lending Account... in the name of Vincent J & Angela Pizzinga

A. Estate Late Winifred Madge Nightingale

i. The solicitor misappropriated trust funds

ii. The solicitor provided to the Trust Account lnvestigator and to third party trust account statements or trust ledgers that did not disclose the true position in respect of trust monies

iii. The solicitor misled the lnvestigator on numerous occasions during his investigation

iv. The solicitor breached Sections 255(1), 259(1), 260, 264(2)(a), 264(2)(b) and 674 of the Act

v. The solicitor breached clauses 88(2), 88(3), 88(4) of the Regulations

vi. The solicitor breached Rule 34 of the Rules

1. The solicitor acted for Steven Greenfield and Nicole Greenfield ['the Executors'] as Executors of the Estate of the late Winifred Madge Nightingale ['the deceased'].

2. The solicitor received the sum of $150,000.00 on behalf of the Estate which he deposited into his Trust Account.

3. On 27 October 2008 the sum of $145,000.00 was paid from the Trust Account. When asked by the Investigator the purpose of this payment the solicitor stated that it was a loan to Anvin. Such statement was false.

4. On 27 October 2008 the solicitor drew a cheque on the Trust Account for $145,000.00. The cheque butt described the payment as being to "Estate of late Winifred Madge Nightingale". The Trust Ledger Account for the deceased described the debit entry as "Paid to Estate of Late Nightingale" and the reason for the payment as being "investment". The Trust Payments Cash Book describes the payment as "Paid to Anvin Pty Ltd" and the reason for payment as being for "Investment Monies".

Such misdescriptions were in breach of s.264(2)(b) of the Act.

5. In breach of s.255(1), s.260 and s.262(2) of the Act the cheque for $145,000.00 along with other moneys was paid into the Tax Trust Account.

6. On 20 January 2010 the sum of $50,000.00 was repaid by Anvin to the Trust Account.

In breach of s.674 of the Act the solicitor advised the lnvestigator that the money was a loan from Anvin to the Estate whereas the true position was that the money previously misappropriated was being repaid by the solicitor to the extent of $50,000.00.

7. By April 2010 the balance outstanding [$95,000.00] had been repaid.

8. On 4 February 2010 the solicitor forwarded a letter bearing this date to the NSW Trustee and Guardian with a Trust Account Statement purporting to include all transactions up to 8 November 2008. Such statement omitted to display the entry for the payment of $145,000.00 on 27 October 2008 and showed a credit balance of $145,452.00 rather than the correct balance of $452.00.

The statement also omitted to display transactions that had occurred in the subsequent period to 4 February 2010.

Such action on the part of the solicitor was in breach of Rule 34 of the Rules.

9. The solicitor produced to the lnvestigator a copy of a trust ledger for the Estate which recorded the amount misappropriated as being a payment to the Estate for "investment".

Such misdescription was in breach of s.264(2)(b) of the Act.

10. On 3 March 2010 the solicitor drew a cheque on the Trust Account for $400,000.00. The cheque butt described the payment as being to "N Greenfield" for "Estate Distribution". The Trust Ledger Account for the deceased described the related debit entry as "Paid to Nicole Greenfield" and the reason for the payments as being "Distribution".

The aforementioned cheque was not forwarded to Nicole Greenfield.

In breach of s.255(1), s.260 and s.262(1) of the Act it was deposited, along with other moneys, to the Tax Trust Account.

11. On 17 March 2010 the solicitor transferred $350,000.00 from the Anvin Account to the bank account of Nicole Greenfield.

12. On 20 April 2010 the solicitor transferred $60,000.00 from the Overdraft Account to the bank account of Nicole Greenfield thereby finalising the amount due to her.

13. On 8 March 2010 the solicitor drew a cheque on the Trust Account for $395,000.00. The cheque butt described the payment as being to "S Greenfield" for "Distribution re Estate of Nightingale". The Trust Ledger Account for the deceased described the related debit entry as "Paid to S Greenfield" and the reason for the payment as being "Distribution".

The aforementioned cheque was not forwarded to Mr Greenfield.

In breach of s.255(1), s.260 and s.262(1) of the Act it was misappropriated to the Tax Trust Account.

14. On 8 March 2010 the solicitor deposited the cheque for $395,000.00 to the Overdraft Account.

15. On 30 March 2010 a cheque in the sum of $410,026.58 was drawn on the Overdraft Account to enable a purchase by Mr Greenfield to proceed.

16. On 29 April 2010 the solicitor withdrew from the Trust Account $75,000.00 by transfer to the Overdraft Account. As the amount withdrawn was in excess of the amount due part of it was repaid by the solicitor to the Trust Account.

Such withdrawal was without the authority of the clients and in breach of s.261(1)(b) and 262(1)(a) of the Act and clauses 88(2) and either 88(3)or 88(4) of the Regulations.

B. Estate Late Shirley Rumball

i. The solicitor misappropriated trust funds

ii. The solicitor provided to the Trust Account lnvestigator trust account statements or trust ledgers that did not disclose the true position in respect of trust monies

iii. The solicitor misled the Investigator on numerous occasions during his investigation

iv. The solicitor breached sections 255(1), 259(1), 262(1)(a), 264(2)(a), 264(2)(b) and 674 [of the] Act

v. The solicitor breached clauses 68(4), 69(4), 70(9) of the Regulations

vi. The solicitor breached Rule 12 of the Rules

1. The solicitor acted for Clive Kirkpatrick and Mark Rumball ['the Executors'] as Executors of the Estate of the late Shirley Rumball ['the Deceased'].

2. The solicitor acted on behalf of the Executors with respect to the sale of the Deceased's property at North Turrarnurra and received the sale proceeds.

3. On 21 May 2010 the solicitor drew a cheque on the Trust Account for $377,743.23. The cheque butt described the payment as being to "C Kirkpatrick" for "Proceeds of Estate of late Shirley Rumball". The Trust Ledger Account for the deceased described the related debit entry as "Paid to C Kirkpatrick and the reason for the payment as being "distribution".

4. On 8 June 2010 the solicitor transferred the sum of $377,743.23 from the Overdraft Account by depositing to the bank accounts of CJ & SJ Kirkpatrick and Mark and Debra Rumball the sum of $188,871.61and $188,871.62 respectively.

5. On 4 August 2010 the solicitor drew a cheque on the Trust Account for $118,456.46 in favour of Anvin, thereby overdrawing the trust ledger by $74.30. The cheque butt described the payment as being to "Anvin Pty Ltd" for "The Estate of S O Rumball -distribution of Estate on behalf of Exec". Such description was untrue and in breach of s.264(2)(b) of the Act.

6. This cheque payment and a deposit on behalf of this Estate on 3 August 2010 were not entered in the trust payments cash book, the trust receipts cash book or the trust ledger account for this Estate within 5 working days.

Such failure breached of s.264(2)(a) of the Act and clauses 68(4), 69(4) and 70(9) of the Regulations.

7. The transactions referred to in paragraph 5 were subsequently entered into the records. The payment of $118,456.46 was described as "Paid to Anvin Pty Ltd" and the reason for the payment described as "For Distribution to Beneficiaries by Direct Deposit".

Such description was untrue and in breach of s.264(2)(b) of the Act.

8. On 18 August 2010 when asked by the Investigator the purpose of the payment of $118,456.46 to Anvin, the solicitor stated that it was a loan. Such statement was false.

9. On 19 August 2010 when asked by the Investigator why Anvin had borrowed the sum of $118,456.46 the solicitor stated that "the intention was to transfer the money to the Beneficiaries by BPay" and "it was sitting in Anvin's Account until repaid today to the Trust Account".

Such statement was untrue and in breach of s.264(2) of the Act as by 9 August 2010 the Bank statements for the Anvin Account disclosed that all except $428.49 of the $118,452.46 had been used for other purposes.

10. On 5 August 2010 a cheque was drawn by Anvin in favour of ING Bank. Such payment was on account of moneys due by clients of the solicitor [Ramino Pagkaliwagan and Rowena Rosales] in order to effect a discharge of a Mortgage following the sale of a property owned by them at Guildford.

Ramino Pagkaliwagan and Rowena Rosales had earlier in February 2000 lent Anvin the sum of $1 20,000.00 after the solicitor received funds on their behalf following the sale of another property owned by them at Toongabbie.

Such loan to Anvin was in breach of Rule 12 of the Rules.

C. Purchase by Mr & Mrs Cannon

i. The solicitor intermingled trust funds

ii. The solicitor breached s.260 of the Act

1. On 1 April 2010 Mr & Mrs Cannon purchased a property at Wahroonga and thereafter the solicitor acted on their behalf.

2. On 5/6 July 2010 for settlement on 14 July 2010 it was arranged that funds held by Mrs Donna Cannon by way of Term Deposit with the Newcastle Permanent Building Society ['NPBS'] would be used.

The Term Deposit was due to mature on 12 July 2010 and the amount required from Mrs Cannon was $308,411.45.

3. On 6 July 2010 an employee of the solicitor provided to NPBS the account details for the Overdraft Account.

4. On 12 July 2010 the sum of $308,411.45 was transferred by the NPBS to the solicitor's Overdraft Account and not his Trust Account.

5. On 14 July 2010 settlement occurred.

D. Purchase by George Popovic

i. The solicitor intermingled trust funds

ii. The solicitor breached s.260 of the Act

1. On 27 March 2010 George Popovic ['Mr Popovic'] purchased a property at Concord and thereafter the solicitor acted on his behalf.

2. On 21 April 2010 Mr Popovic paid an amount by direct deposit to the Anvin Account.

3. The solicitor prepared a Schedule for the Investigator and this deposit is described as "21-Apr-I0 received from George for settlement 46,000".

4. On 10 May 2010 the matter settled using funds deposited to the Anvin Account rather than the Trust Account.

E. John Cremen

i. The Solicitor has failed to disclose his costs

1. The solicitor received instructions to act on behalf of John Cremen ['Mr Cremen'] in a Family Law matter.

2. On 18 September 2009 the solicitor forwarded to Mr Cremen a Costs Agreement.

3. On 29 September 2009 following complaint from Mr Cremen the solicitor forwarded to him an Amended Costs Agreement.

4. Neither of the Costs Agreements sent by the solicitor to Mr Cremen complied with s.309(1) of the Act.

ii. Delay

iii. Failure to provide an itemised bill for costs for a period of 4 months

1. On 18 February 2010 Mr Cremen informed the solicitor by email that his Retainer was terminated and requested an ltemised Account.

2. On I9 February 2010 the solicitor sent a letter to Mr Cremen which said in part "We shall prepare a final itemised account and forward same to you shortly".

3. On 2 June 2010 Mr Cremen received a Tax Invoice from the solicitor dated 31 May 2010.

4. On 3 and 10 June 2010 Mr Cremen sent to the solicitor emails requesting an ltemised Account.

5. On 11 June 2010 Mr Cremen received an ltemised Account dated 10 June 2010.

6. Pursuant to s.332A(2) of the Act a solicitor is required to furnish an itemised account within 21 days of request.

4 At the hearing of these proceedings, which took place before us on 9 July 2012, the Law Society indicated that the payment referred to in Particular A7 was in fact made on 20 January 2010. It indicated also that it did not press Ground 8 (delay in the Cremen matter) or Particular B8.

The Amended Reply filed by the Solicitor

5 The Solicitor filed a Reply on 2 December 2011 and an Amended Reply at the hearing on 9 July 2012. In the Amended Reply, he stated that he opposed Order 1 sought by the Law Society, but did not oppose Order 2. His response to all of the ten Grounds except Grounds 8 and 9 included a claim that he did not intend to commit the breaches of common law or statutory duties described in them. He sought to explain this claim by referring to specific paragraphs in a response, dated 23 December 2010, that he had made to the complaint by the Law Society (dated 5 November 2010) from which most of the allegations contained in the Amended Application were derived. This response was not in evidence before us, but what appears to be a later version, dated 16 May 2012, was annexed to an affidavit tendered by the Law Society.

6 This way of framing the Reply and Amended Reply has made it difficult to identify with certainty the matters in relation to which the Solicitor claimed not to have intended to commit any breach of common law or statutory duties. When, however, the Amended Reply is read alongside the Solicitor's response to the complaint, one outcome of significance is apparent. It is that the Solicitor, in replying to the most serious Ground advanced against him - misappropriation of trust funds - did not make this specific claim with respect to one of the most serious allegations made in the Amended Application - namely, that in the circumstances outlined in Particulars A3, A4 and A5 he withdrew the sum of $145,000 from the Nightingale estate. Although in response to other allegations of misappropriation of trust funds made in the Amended Application he asserted that he had no intention to misappropriate them, he did not make this assertion with regard to his withdrawal of this amount of $145,000.

7 In both versions of the Reply, the Solicitor did not admit Ground 8 (which, as just mentioned, was withdrawn at the hearing) or Ground 9.

8 With regard to Section A of the Particulars (Estate Late Winifred Madge Nightingale), the Solicitor in the Amended Reply admitted the following without qualification: A1, A2, A7 (as amended at the hearing), A11, A12, A14 and A15. He admitted the following with the qualification that he did not intend to commit the breaches of common law or statutory duties described in them: A3 to A5, A8 to A10, A13 and A16.

9 In relation to Particular A6, the Solicitor, in both the Reply and the Amended Reply, admitted 'initially advising the Investigator' that the payment of $50,000 referred to in the Particular was a loan by Anvin Pty Ltd to the estate. He added that he did not intend to mislead the Investigator. But as explained below, his evidence given at the hearing included a statement withdrawing this admission.

10 With regard to Section B (Estate Late Shirley Rumball), the Solicitor, in his Amended Reply, admitted Particulars B2 to B4 without qualification. He admitted the following Particulars with the qualification that he did not intend to commit the breaches of common law or statutory duties described in them: B5 to B7 and B9. He admitted B10, with the qualification that he was not aware that his conduct was in breach of the Revised Professional Conduct and Practice Rules 1995 (Solicitors' Rules). He did not admit B1 or B8 (which was, as just mentioned, withdrawn at the hearing).

11 With regard to Section C (Purchase by Mr and Mrs Cannon) and Section D (Purchase by John Popovic), the Solicitor admitted all the Particulars (C1 to C5 and D1 to D4) with the qualification that he did not intend to commit the breaches of common law or statutory duties described in them.

12 With regard to Section E (John Cremen), he admitted all of the Particulars except E(i)(4).

The evidence

13 At the hearing, Ms Cora Groenewegen, who appeared for the Law Society, tendered an affidavit sworn by Ms Anne-Marie Foord (the solicitor for the Society) on 21 May 2012 and an affidavit sworn by Mr Ronald Dunlop on 18 May 2012.

14 Exhibited to the latter affidavit was a volume containing extracts from a report on the Solicitor's affairs ('the Dunlop Report') that had been prepared by Mr Dunlop in his capacity as a Trust Account Investigator in the employ of the Law Society. This report included copies of handwritten notes, made apparently by Mr Dunlop, of a number of interviews of the Solicitor. In typed form, passages from these notes formed part of an

executive summary of the report. Also included were copies of numerous documents obtained from the Solicitor's office.

15 These affidavits were admitted without objection. Mr Birch SC, who appeared for the Solicitor, stated that although the Solicitor disputed some of the matters alleged in Mr Dunlop's report, neither deponent would be required for cross-examination.

16 Mr Birch tendered an affidavit sworn by the Solicitor on 3 April 2012, to which a number of documents were exhibited. This was admitted without objection. The Solicitor gave brief supplementary testimony and was briefly cross-examined.

17 Included in the material exhibited to the Solicitor's affidavit was a report dated 8 February 2011 by Dr Stephen Allnutt, a forensic psychiatrist, setting out his assessment of the Solicitor's psychiatric condition.

18 Mr Birch also tendered (a) a statement dated 21 June 2012 signed by Associate Professor Ross Menzies, a clinical psychologist, setting out his assessment of the 'psychiatric status and current functioning' of the Solicitor and (b) five affidavits constituting testimonials in the Solicitor's favour. Subject to some deletions of short passages in some of the affidavits, this evidence was admitted.

Statutory provisions and professional conduct rules

19 The following provisions of the Legal Profession Act 2004 ('the Act') are of relevance in this case:-

255 Holding, disbursing and accounting for trust money

(1) A law practice must:

(a) hold trust money deposited in a general trust account of the practice exclusively for the person on whose behalf it is received, and

(b) disburse the trust money only in accordance with a direction given by the person.

259 Protection of trust money

(1) Money standing to the credit of a trust account maintained by a law practice is not available for the payment of debts of the practice or any of its associates.

260 Intermixing money

(1) A law practice must not, otherwise than as permitted by subsection (2), mix trust money with other money.

Maximum penalty: 100 penalty units.

(2) A law practice is permitted to mix trust money with other money to the extent only that is authorised by the Law Society Council and in accordance with any conditions imposed by the Law Society Council in relation to the authorisation.

261 Dealing with trust money: legal costs and unclaimed money

(1) A law practice may do any of the following, in relation to trust money held in a general trust account or controlled money account of the practice for a person:...

(b) withdraw money for payment to the practice's account for legal costs owing to the practice if the relevant procedures or requirements prescribed by this Act and the regulations are complied with...

262 Deficiency in trust account

(1) An Australian legal practitioner is guilty of an offence if he or she, without reasonable excuse, causes:

(a) a deficiency in any trust account or trust ledger account...

Maximum penalty: 200 penalty units.

(2) A reference in subsection (1) to an account includes a reference to an account of the practitioner or of the law practice of which the practitioner is an associate.

(3) In this section:

cause includes be responsible for.

deficiency in a trust account or trust ledger account includes the non-inclusion or exclusion of the whole or any part of an amount that is required to be included in the account.

264 Keeping trust records

(1) A law practice must keep in permanent form trust records in relation to trust money received by the practice.

Maximum penalty: 100 penalty units.

(2) The law practice must keep the trust records:

(a) in accordance with the regulations, and

(b) in a way that at all times discloses the true position in relation to trust money received for or on behalf of any person, and

(c) in a way that enables the trust records to be conveniently and properly investigated or externally examined, and

(d) for a period determined in accordance with the regulations.

Maximum penalty: 100 penalty units.

309 Disclosure of costs to clients

(1) A law practice must disclose to a client in accordance with this Division:

(a) the basis on which legal costs will be calculated, including whether a fixed costs provision applies to any of the legal costs, and

(b) the client's right to:

(i) negotiate a costs agreement with the law practice, and

(ii) receive a bill from the law practice, and

(iii) request an itemised bill after receipt of a lump sum bill, and

(iv) be notified under section 316 of any substantial change to the matters disclosed under this section, and

(c) an estimate of the total legal costs if reasonably practicable or, if that is not reasonably practicable, a range of estimates of the total legal costs and an explanation of the major variables that will affect the calculation of those costs, and

(d) details of the intervals (if any) at which the client will be billed, and

(e) the rate of interest (if any), whether a specific rate or a benchmark rate, that the law practice charges on overdue legal costs, whether that rate is a specific rate of interest or is a benchmark rate of interest (as referred to in subsection (1A)), and

(f) if the matter is a litigious matter, an estimate of:

(i) the range of costs that may be recovered if the client is successful in the litigation, and

(ii) the range of costs the client may be ordered to pay if the client is unsuccessful, and

(g) the client's right to progress reports in accordance with section 318, and

(h) details of the person whom the client may contact to discuss the legal costs, and

(i) the following avenues that are open to the client in the event of a dispute in relation to legal costs:

(i) costs assessment under Division 11,

(ii) the setting aside of a costs agreement or a provision of a costs agreement under section 328 (Setting aside costs agreements or provisions of costs agreements),

(iii) mediation under Division 8, and

(j) any time limits that apply to the taking of any action referred to in paragraph (i), and

(k) that the law of this jurisdiction applies to legal costs in relation to the matter, and

(l) information about the client's right:

(i) to accept under a corresponding law a written offer to enter into an agreement with the law practice that the corresponding provisions of the corresponding law apply to the matter, or

(ii) to notify under a corresponding law (and within the time allowed by the corresponding law) the law practice in writing that the client requires the corresponding provisions of the corresponding law to apply to the matter.

332A Request for itemised bill

(1) If a bill is given by a law practice in the form of a lump sum bill, any person who is entitled to apply for an assessment of the legal costs to which the bill relates may request the law practice to give the person an itemised bill.

(2) The law practice must comply with the request within 21 days after the date on which the request is made.

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.

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...

674 Obstruction or misleading of investigator

(1) A person must not, without reasonable excuse, obstruct or mislead an investigator exercising a power under this Act.

Maximum penalty: 100 penalty units.

(2) In this section:

obstruct includes hinder, delay, resist and attempt to obstruct.

676 Obligation of Australian lawyers

(2) An Australian lawyer must not mislead an investigator or a Council in the exercise of:

(a) any power or function under this Chapter...

(4) An Australian lawyer who contravenes subsection (2)... is guilty of professional misconduct.

20 The following provisions of the Legal Profession Regulation 2005 ('the Regulations') are relevant:-

68 Trust account receipts cash book

(4) The particulars in respect of a receipt must be recorded within 5 working days counting from and including the day the receipt was made out.

69 Trust account payments cash book

(4) The particulars in respect of a payment must be recorded within 5 working days counting from and including the day the payment was made out.

70 Recording transactions in trust ledger accounts

(9) The particulars in respect of a receipt, payment or transfer of trust money must be recorded within 5 working days counting from and including the day the receipt was made out, the payment was made or the transfer was effected, as the case may be.

88 Withdrawing trust money for legal costs-section 261 (1) (b) of the Act

(1) This clause prescribes, for the purposes of section 261 (1) (b) of the Act, the procedure for the withdrawal of trust money held in a general trust account or controlled money account of a law practice for payment of legal costs owing to the practice by the person for whom the trust money was paid into the account.

(2) The trust money may be withdrawn in accordance with the procedure set out in either subclause (3) or (4).

(3) The law practice may withdraw the trust money:

(a) if:

(i) the money is withdrawn in accordance with a costs agreement that complies with the legislation under which it is made and that authorises the withdrawal, or

(ii) the money is withdrawn in accordance with instructions that have been received by the practice and that authorise the withdrawal, or

(iii) the money is owed to the practice by way of reimbursement of money already paid by the practice on behalf of the person, and

(b) if, before effecting the withdrawal, the practice gives or sends to the person a request for payment, referring to the proposed withdrawal.

(4) The law practice may withdraw the trust money:

(a) if the practice has given the person a bill relating to the money, and

(b) if:

(i) the person has not objected to withdrawal of the money within 7 days after being given the bill, or

(ii) the person has objected within 7 days after being given the bill but has not applied for a review of the legal costs under the Act within 60 days after being given the bill, or

(iii) the money otherwise becomes legally payable.

21 The following provisions of the Revised Professional Conduct and Practice Rules 1995 (Solicitor's Rules) (hereafter 'the Rules') are relevant:-

12 - Practitioner and client - Borrowing transactions

12.1 A practitioner must not borrow any money, nor assist an associate to borrow any money from a person -

12.1.1 who is currently a client of the practitioner, or the practitioner's firm;

12.1.2 for whom the practitioner or practitioner's firm has provided legal services, and who has indicated continuing reliance upon the advice of the practitioner, or practitioner's firm in relation to the investment of money; or

12.1.3 who has sought from the practitioner, or the practitioner's firm, advice in respect of the investment of any money, or the management of the person's financial affairs.

12.2 This Clause does not prevent a practitioner, or an associate of a practitioner borrowing from a client, which is a corporation or institution described in the Schedule to this Rule, or which may be declared by the Council of the Law Society to be exempt from this Rule.

12.3 A practitioner must not maintain a private finance company and invite, directly or indirectly, the deposit of money with the company on the basis of a representation that -

12.3.1 the money is repayable at call, or on short notice, if that is not assured when the money is deposited; or

12.3.2 that the deposit of the money is, or will be, secured, unless the money is specifically secured by an instrument identifying the lender, the amount deposited, and the security.

12.4 A practitioner must not borrow any money, or permit or assist an associate to borrow any money, from a private finance company which is operated or controlled by the practitioner or the associate of the practitioner.

12.5 A practitioner must not cause or permit a private finance company to pay to any depositors of money to the company a rate of interest on their deposits which is less than the rate charged by the company to borrowers.

34 - Communications

A practitioner must not, in any communication with another person on behalf of a client:

34.1 represent to that person that anything is true which the practitioner knows, or reasonably believes, is untrue; or

34.2 make any statement that is calculated to mislead or intimidate the other person, and which grossly exceeds the legitimate assertion of the rights or entitlement of the practitioner's client; or

34.3 threaten the institution of criminal proceedings against the other person in default of the person's satisfying a concurrent civil liability to the practitioner's client; or

34.4 demand the payment of any costs to the practitioner in the absence of any existing liability therefor owed by the person to the practitioner's client.

Factual background

22 The Solicitor was admitted as a solicitor of the Supreme Court on 20 December 1989. During most of the period between 31 January 1994 and 28 October 2010, he was the sole principal of a law and tax accounting practice called Pizzinga & Associates. On 28 October 2010, following receipt of the Dunlop Report by the Law Society, his practising certificate was suspended.

23 Before he obtained his legal qualifications, the Solicitor commenced practice as an accountant. Within the firm of Pizzinga & Associates, he conducted his law practice and his tax accounting practice in the same premises and using the same staff. He also maintained the Trust Account, the Tax Trust Account, the Overdraft Account and the Anvin Account for the purposes outlined near the commencement of the Particulars. After his practising certificate as a solicitor was suspended, he continued to practise as an accountant.

24 According to his affidavit, during 2005 he started borrowing money from clients, through his company Anvin Pty Ltd ('Anvin'). He believed that the principles governing borrowing by solicitors from clients did not apply to any loan made to him by any client of either his accounting or his law practice, unless at the time he was engaged in a legal matter on behalf of the client.

25 Following, and seemingly as a result of, the deaths of his parents and his grandmother in the period between October 2006 and January 2007, the Solicitor developed symptoms which, according to Dr Allnutt, indicated that he was suffering from a depressive disorder. One consequence of this was that he worked unduly long hours and took very little time off work. Dr Allnutt, who saw him during December 2010, formed the opinion that his depression became particularly severe during a period in October 2008 when, in circumstances outlined below, a share market collapse associated with the global financial crisis put him under very great pressure. He 'started to feel less depressed' in January 2009 following a revival of the share market, but in December 2010 his symptoms of depression were still evident. Dr Allnutt also expressed the opinion that the Solicitor had 'an inherent neediness for his clients' positive feedback'.

26 According to Associate Professor Menzies, who saw the Solicitor on seven occasions between November 2011 and June 2012, he displayed 'a range of symptoms of stress and depression' at initial assessment, but responded well to a treatment program. By June 2012, he no longer met the criteria for major depression. His opinions and those of Dr Allnutt were not challenged by the Law Society.

27 During 2007, the Solicitor started investing in shares, for the purpose of which he opened the account described in the Particulars as the Commsec Margin Loan Account. By mid 2007, he was trading frequently in shares on every weekday. During November 2007, he took out a loan of $2.5 million from Commsec in order to purchase shares. By 9 October 2008, the amount lent to him by Commsec had increased to $4.7 million. His shares at that date were worth about $6.5 million. The equity in these shares represented the money that he had borrowed from clients.

28 Between 10 October and late November 2008, the value of these shares dropped dramatically on account of the global financial crisis. He received many telephone calls from Commsec requiring him to sell shares to meet margin calls or to top up his account at Commsec in order to avoid meeting these calls. He fell into 'a state of panic'. Being reluctant to sell shares for less than he had paid for them, he borrowed large sums secured on his home and on an investment property. According to his affidavit, he also borrowed about $200,000 from clients.

29 The matters just outlined are of particular significance when considering the first transaction outlined in the Particulars, namely, the Solicitor's conduct in withdrawing $145,000 from the Nightingale estate on 27 October 2008.

30 The Investigator, Mr Dunlop, was appointed following the receipt by the Legal Services Commissioner of a complaint by Mr John Cremen on 5 July 2010. Some of the matters raised in this complaint formed the basis of Grounds 8, 9 and 10 of the Application. Mr Dunlop commenced his investigation on 18 August 2010. On that day and on subsequent occasions, he interviewed the Solicitor at the Solicitor's office.

31 With reference to the Law Society's allegations that the Solicitor misled the Investigator, the Solicitor stated in his affidavit that he was under very great stress during these interviews because of the seriousness of the matters being raised and because the investigation took place at a particularly busy time of the year. He asserted that he was 'in a state of shock', that he felt like 'a rabbit in the headlights' and that 'sometimes' his answers were 'the first thing' that came into his mind. The Law Society did not challenge these assertions.

32 We turn now to the specific allegations made against the Solicitor.

Estate Late Winifred Madge Nightingale

33 Matters relating to the withdrawal of $145,000 from the trust account for the estate on 27 October 2008 (Particulars A1 to A9). For reasons already outlined, the Solicitor's Reply and Amended Reply must be taken to have admitted the Law Society's allegation that the Solicitor's withdrawal of this sum amounted to misappropriation of trust funds and was accompanied by an intention to misappropriate them. Indeed, the Solicitor admitted that he deposited the withdrawn amount into his Commsec account in order to pay margin calls. He did so both in his affidavit and eventually (though not initially) during the investigation of his affairs by Mr Dunlop.

34 The Solicitor stated in his affidavit that before he withdrew the $145,000 Mr Steven Greenfield, one of the executors of the Nightingale estate, authorised him to invest funds of the estate after being informed that they would not attract interest while in his trust account. He said to Mr Greenfield that he would invest these funds at 4%.

35 The Solicitor stated further that he 'always' intended to repay the sum that he withdrew, with interest at 4%. Although there is some uncertainty in the evidence as to when the process of repayment by instalments was completed, it was no later than April 2010 and may (as the Law Society seemed to accept) have been as early as January 2010. It was not until late in August 2010, following Mr Dunlop's investigation of his affairs, that he paid interest at 4% in accordance with his claimed intention to do so.

36 Mr Birch argued that because the Solicitor repaid the withdrawn amount with interest, as had always been his intention, the withdrawal did not amount to 'unmitigated theft'. He relied also on the fact that the Solicitor had authority to invest the funds of the estate. In addition, his submissions included the proposition, which is of significance when considering other withdrawals from trust accounts effected by the Solicitor, that an allegation of misappropriation against a legal practitioner in disciplinary proceedings is not made out unless 'dishonesty' is proved. But despite these submissions Mr Birch did not seek to dispute the Law Society's claim that the withdrawal of $145,000 from the Nightingale estate amounted to misappropriation.

37 Ms Groenewegen's submissions included the propositions, with which we agree, that (a) the request by Mr Greenfield to invest estate funds did not authorise the Solicitor to withdraw a substantial sum from the trust account, without providing any security, in order to meet pressing debts of his own, even if he intended in due time to repay the money with 4% interest and (b) that while any part of the withdrawn amount remained outstanding, the death or bankruptcy of the Solicitor would create a real risk that it could never be recovered by the estate.

38 We accordingly find this important allegation by the Law Society to have been established. Moreover, to quote the well-known formulation in Allinson v General Council of Medical Education and Registration [1894] 1 QB 750, the Solicitor's misappropriation of this sum of $145,000 would clearly be regarded as 'disgraceful and dishonourable' by reputable members of the legal profession. In addition, we consider it to be 'conduct of an Australian legal practitioner... occurring in connection with the practice of law... that would... justify a finding that the practitioner is not a fit and proper person to engage in legal practice'. It therefore amounted to professional misconduct, both at common law and under section 497(1)(b) of the Act.

39 With regard to Particular A3, the Dunlop Report records both (a) a statement by the Solicitor that the withdrawn amount of $145,000 was lent to Anvin and (b) a subsequent admission that in fact he used the money to pay margin calls made on him by Commsec. The Report indicates that these two contradictory statements were made on separate occasions, but does not state how much time elapsed between them.

40 In his Reply, his Amended Reply and his affidavit, the Solicitor admitted making the earlier false statement, but claimed that in so doing he did not intend to mislead the Investigator. Mr Birch's submissions did not include any argument specifically directed to the veracity of this claim.

41 We are bound to state that, even allowing for the Solicitor's stress and anxiety during his interviews with Mr Dunlop, we find it improbable that at that time he genuinely believed the withdrawal to have been a loan to Anvin. He put forward no reason why he should have thought that such a loan might have been contemplated by him. The stock market crash of late October 2008 was, as he said in his affidavit, of huge significance for his finances. It caused him to borrow about $200,000 from clients in order to meet margin calls. There are good grounds for believing that when he falsely stated that the withdrawn amount was paid to Anvin as a loan, he knew that this was not the case and his intention was to mislead Mr Dunlop.

42 We do not, however, make a finding to this effect, because it was not alleged, either in the Grounds or in the Particulars of the Amended Application, that the Solicitor, on the 'numerous' occasions in which he misled the Investigator, had an intention to do so. In oral submissions, Ms Groenewegen confirmed that this was the position taken by the Law Society.

43 Ms Groenewegen also submitted that the stress and anxiety suffered by the Solicitor when he made the relevant false statements to Mr Dunlop should not be held to constitute a 'reasonable excuse' within the meaning of this phrase in section 674(1) of the Act. We agree with this submission. The stress and anxiety that will often afflict a legal practitioner who is being questioned by an Investigator cannot, without more, amount to a 'reasonable excuse' for providing a misleading answer. It was always open to the Solicitor, if he wished, to ask the Investigator for time to consider any matter about which he felt uncertain and/or for permission to consult relevant documents. His evident duty was to take all reasonable care to ensure that as far as possible his answers were correct.

44 For these reasons, the allegation in Particular A3 is made out. The Solicitor's conduct constituted a breach of section 674 of the Act and was therefore capable, under section 498(1)(a) of being professional misconduct or unsatisfactory professional conduct. It also constituted a breach of section 676(2). We find that it amounted to professional misconduct under section 676(4).

45 The Solicitor admitted the misdescriptions of this withdrawal of $145,000 that are outlined in Particular A4. They constituted breaches of his obligation under section 264(2)(b) of the Act to keep trust records 'in a way that at all times discloses the true position in relation to trust money'.

46 The Solicitor claimed, however, in his Reply and Amended Reply that it was not his intention to breach this provision. In his affidavit he stated as follows:-

I described the payments as an investment loan to record what I had done with the money. I intended to and did repay the money...

I did not believe my book entries demonstrated an attempt to hide that the $145,000 was a loan from the client. Any payments back into the Trust Account in relation to the $145,000 that amount (sic) were already recorded as loan repayments.

47 There are in our opinion strong grounds for believing that the Solicitor intended to contravene section 264(2)(b). On his own admission, he withdrew the relevant trust money in order to meet demands being made on him to pay margin calls, yet he entered up the withdrawal in two documents (the cheque butt and the trust account ledger) as a payment to the clients for whom the money was held on trust (i.e., the executors of the Nightingale estate), and in a third document (the trust payments cash book) as a payment to Anvin for investment purposes. The inference could readily be drawn that these entries were made in the knowledge that they were false and for the purpose of concealing what in fact he had done with the money.

48 Furthermore, we regard his statements on this matter in his affidavit as misleading. This is for the following reasons: (a) only one of the three entries that he made actually described the payment as 'an investment loan'; (b) to describe as an 'investment loan' a payment made to himself, without any security, in order to meet a financial emergency of his own caused by a dramatic decline in the value of his shares paints a manifestly false picture; and (c) none of the entries in fact recorded what he had 'done with the money'.

49 The Law Society did not however allege that the breaches of section 264(2)(b) of the Act were accompanied by an intention to breach this provision. We therefore do not make a formal finding to this effect. It is clear however that the Solicitor's misdescriptions of this withdrawal of funds displayed, to say the least, a lamentable failure to comply properly with his statutory obligations. Our conclusion is that his behaviour amounted to professional misconduct under section 498(1)(a).

50 The Solicitor admitted that, as alleged in Particular A5, his payment of the amount of $145,000 into his tax trust account was made 'in breach of s. 255(1), s.260 and s.262(2) of the Act'. The relevant provision within section 262, stating that an Australian legal practitioner who 'without reasonable cause, causes a deficiency in a trust account' is guilty of an offence, was in fact subsection (1), not subsection (2). Subsection (2) contains a reference to subsection (1) and extends its operation to a limited extent. In these circumstances, we do not believe that this error in Particular A5 precludes a finding of breach of section 262(1) by the Solicitor.

51 The Solicitor claimed not to have intended to breach these provisions. The basis for this claim seems to be that he was not aware of the obligations imposed by them and that, as mentioned earlier, he had been authorised by Mr Greenfield to invest funds held on behalf of the Nightingale estate.

52 It is evident, however, that he intentionally performed the acts that constituted breaches of each of these provisions. In addition, for reasons given earlier, we do not regard the authorisation given to him by Mr Greenfield as permitting him to withdraw the $145,000 for the purpose to which he actually applied this sum.

53 For these reasons, we find that the Solicitor's admitted breaches of sections 255 and 260 of the Act and his breach of section 262(1) were accompanied by an intention to engage in the relevant conduct and that they amounted to professional misconduct under section 498(1)(a).

54 The disputed allegation in Particular A6 was that the Solicitor misled the Investigator by stating that a payment of $50,000 made on 20 January 2010 by Anvin to the trust account of the Nightingale Estate was a loan provided by Anvin. The true position was that the amount of $145,000 previously withdrawn by the Solicitor was being repaid in part.

55 Mr Dunlop's notes of an interview of the Solicitor included the following passage:-

I said: "What was $50,000 deposited to this Estate's (trust ledger) account #27231 on 22/1/09 for?"

He said: "The receipt was on 22/1/10 not 22/1/09. It was money lent by Anvin to the Estate for early distribution pending receipt of monies from the Protective Commissioner..."

56 In both the Reply and the Amended Reply the Solicitor, as indicated above, admitted 'initially' providing an answer such as Mr Dunlop recorded. In his affidavit sworn on 3 April 2012, however, the Solicitor stated: 'I do not recall saying to Mr Dunlop that the $50,000... was money lent by Anvin to the estate for early distribution to the beneficiary, Natasha Rosner...'

57 In view of the admissions made in both versions of the Reply and of the tentative nature of the Solicitor's different statement in his affidavit ('I do not recall...'), we prefer the evidence supplied by Mr Dunlop's handwritten notes of the interview.

58 A further statement by the Solicitor on this matter is however recorded in Mr Dunlop's notes of what appears to have been the same interview. In the course of answering questions about his withdrawal of the sum of $145,000 from the Nightingale estate account, the Solicitor admitted for the first time that he had used this sum for the purposes of his share transactions. He then said to Mr Dunlop that he had repaid all of the $145,000 by instalments during the next 14 months and described the first instalment as follows: '$50,000 came back in January 2010 to pay Rosner.'

59 This last statement by the Solicitor indicates that, as he claimed in his Reply and Amended Reply, he corrected his initially misleading statement about the $50,000 after he had made it. The lapse of time between the initial statement and the correction appears to have been relatively short. We accordingly find that the allegation in Particular A6 that the Solicitor misled the Investigator is not supported by the evidence.

60 The gist of the matters alleged in Particular A8 is that on 4 February 2010 the Solicitor sent to the NSW Trustee and Guardian ('the Guardian') a trust account statement for the Nightingale estate which (a) did not refer to the withdrawal of $145,000 on 27 October 2008 and (b) did not include all of the transactions occurring between that date and 4 February 2010.

61 The covering letter to the Guardian, headed 'Estate of the Late Winifred Madge Nightingale', described this document simply as 'copy of our Trust Account Statement'. A comparison of copies (forming part of the Dunlop Report) of this statement with relevant pages in the trust account ledger reveals that the statement gave a seriously misleading picture. As alleged in Particular A8, it omitted the withdrawal of the sum of $145,000 on 27 October 2008. In consequence, the credit balance that it showed on 8 November 2008 was $145,452.00, whereas the actual credit balance on that date, as recorded in the trust account ledger, was only $452.00. The date of the last entry recorded in the statement was 8 November 2008. The statement therefore omitted the payments, already mentioned, of $50,000 from Anvin on 22 January 2010 and of the same amount to N Rosner on 28 January 2010.

62 These three omissions in the trust account statement were the only omissions. All the other debit and credit transactions recorded in the trust account ledger during the period purportedly covered by the statement (i.e.

from 27 August 2008, the date of Mrs Nightingale's death, until 4 February 2010) were shown in the statement. The statement was in a similar format to the ledger.

63 The Solicitor admitted sending the trust account statement to the Guardian, together with the covering letter dated 4 February 2010, and that the contents of the statement were inaccurate. In the Reply and Amended Reply, he claimed, however, that he did not intend to mislead the Guardian. In his affidavit, he elaborated on this claim as follows:-

I provided the document to comply with my undertaking given when the matter settled at mediation to send the Guardian a sealed copy of the orders and request for payment of funds held by the Guardian. I did not intentionally set out to deceive the Trustee and until Mr Dunlop pointed out to me the effect of what I had done, I did not think that I had. I accept the effect of what I did was to mislead the Guardian and anyone else who read that letter.

64 We are not impressed by this explanation. The trust account statement seriously misdescribed the financial situation of the estate. It made no mention of the misappropriation of the substantial sum of $145,000 that the Solicitor had effected about fifteen months earlier, or of the recent repayment of part of this sum ($50,000). His omission of these matters appears to be an attempt to reduce the risk that his misappropriation might be detected. His assertion that, when sending to the Guardian a document that to his knowledge so grossly misrepresented the true situation, he had no intention of misleading the Guardian is difficult to believe.

65 We reject also a contention expressed as follows in the written outline of submissions prepared by Mr Birch: 'The trust account statement does not expressly purport to record all of the transactions that had taken place, rather it appears in the form of a balance sheet indicating how the monies have been dispersed.' In fact, however, the statement did not possess any of the distinguishing features of a balance sheet. It did not, for example, record the values of the estate's assets and liabilities, or the amount by which the assets exceeded or fell short of the liabilities. Furthermore and more importantly, because it possessed the same format as a ledger, it conveyed clearly the impression that it recorded all the transactions relating to the trust account.

66 In this instance, the Law Society did not explicitly allege an intention to mislead. But the relevant provision within Rule 34 - i.e., Rule 34.1 - requires that a practitioner 'must not, in any communication with another person on behalf of a client... represent to that person that anything is true which the practitioner knows, or reasonably believes, is untrue' (emphasis added). The Solicitor's admission that he breached this provision must therefore be taken to incorporate an admission that he knew, or reasonably believed, that the statement that he forwarded to the Guardian was untrue. His concurrent denial of any intention to breach the Rule cannot assist him to escape from the implications of his admission of breach.

67 For the foregoing reasons, we find as follows: (a) the matters alleged in Particular A8 are made out; (b) the Solicitor, in breach of Rule 34.1 of the Rules, provided to a third party a trust account statement that to his knowledge did not disclose the true position; and (c) his conduct in so doing amounted to professional misconduct under section 498(1)(a) of the Act.

68 Particular A9, which the Solicitor admitted subject to the qualification that he did not intend any breach of statutory duty, in essence repeats one of the allegations made in Particular A4: namely, that the Solicitor breached section 264(2)(b) by describing the debit entry in his trust account ledger relating to his withdrawal of the $145,000 as 'Paid to Estate of Late Nightingale' for 'Investment'. This duplication arises from the fact that two slightly differing versions of the relevant page of the ledger are included in the Dunlop Report. They both have handwritten annotations, of which one reads 'received from external examiner 24/8/10' and the other reads 'rec'd 11/10/10'.

69 This allegation in Particular A9 does not materially add to the relevant allegation in A4 and may, for practical purposes, be left out of account.

70 Matters relating to the transfers of $400,000 and $395,000, on 3 March 2010 and 8 March 2010 respectively, from the trust account into the tax trust account (Particulars A10 to A15). In relation to each of these two transfers of trust funds, the Solicitor admitted the alleged breaches of sections 255(1), 260 and 262(1) of the Act, but claimed that he did not intend these breaches. He did not admit the misappropriation alleged in Particular A13 with respect to the second transfer.

71 In his affidavit, the Solicitor stated that his intention in making each of these transfers to have cleared funds available for use on his client's behalf. He explained that at the time he wrongly believed that he could not arrange direct debits from his trust account.

72 The $400,000 transferred to the tax trust account on 3 March 2010 formed the bulk of a total sum of $410,000 remitted to Ms Nicole Greenfield, a beneficiary of the Nightingale estate, by instalments on 17 March 2010 and 20 April 2010. The $395,000 transferred on 8 March 2010 formed part of an amount of $410,026.58 applied to the purchase of property for Mr Greenfield, another beneficiary.

73 In his affidavit and through his counsel, the Solicitor acknowledged that he derived benefit from the presence of these funds in his tax trust account for limited periods. But Mr Birch argued that the transfers were not made with any dishonest intention or for the purpose of conferring personal benefits on the Solicitor and that therefore did not warrant the label 'misappropriation'. He argued also that, in the circumstances, to employ descriptions for the transfers such as 'Estate Distribution' or 'Paid to S Greenfield' did not misrepresent them, since in substance they showed what was actually done with the funds.

74 As we understand Ms Groenewegen's submissions, she did not contest these propositions advanced by Mr Birch to any significant degree.

75 It is not strictly correct to say, as the Solicitor claimed, that he 'did not intend' to contravene the relevant provisions of the Act, since evidently he did perform the acts amounting to contravention. We accept Mr Birch's submission, however, that he had no dishonest intention and that the transfers therefore did not involve misappropriation on his part.

76 Under section 498(1) of the Act, the admitted breaches of sections 255(1), 260 and 262(1) alleged in Particulars A10 and A13 are 'capable of being unsatisfactory professional conduct or professional misconduct'. Having regard to the preceding discussion, we consider that they are properly characterised as unsatisfactory professional conduct as defined in section 496. They involved irregularities that a competent solicitor could easily have averted.

77 Matters relating to the withdrawal of $75,000 on 29 April 2010 from the trust account to pay costs, without authority from the executors and in breach of statutory requirements (Particular A16). The Solicitor admitted that in making this withdrawal he breached sections 261(1)(b) and 262(1)(a) of the Act and clause 88(2) and clause 88(3) or 88(4) of the Regulations. He claimed in his Reply and Amended Reply that he did not intend these breaches. He did not, however, make any claim to the effect that the executors, Mr and Ms Greenfield, authorised him to withdraw funds on account of costs without notice to them.

78 The Solicitor stated as follows in his affidavit: (a) he withdrew the amount of $75,000, instead of the amount of $60,000 that he had agreed with the executors, because he was 'confused about the amount that he had paid counsel in the estate matter' and therefore made 'a mathematical mistake'; (b) he only ever intended to charge the executors the agreed figure of $60,000 for his costs; and (c) he refunded $15,000 to rectify his mistake and indeed complied with a later request from the executors to pay back a further sum of $5,000.

79 Documents annexed to the Dunlop Report show (a) that a costs agreement sent by the Solicitor to the executors on 7 August 2009 did not contain any clause authorising him to withdraw funds from the estate's trust account in order to pay his costs, (b) that his withdrawal of $75,000 occurred on 29 April 2010 and (c) that the dates of his repayments of $15,000 and $5,000 were 24 and 29 August 2010 respectively. In addition, a statement signed on 28 August 2010 by Mr Greenfield for the purposes of the investigation included assertions that (a) he did not authorise the withdrawal of any amount for costs and disbursements and (b) in consequence of a conversation that he had with the Solicitor on or about 30 March 2010, he had 'expected that the total costs and disbursements would be between $50,000 and $60,000'.

80 The Law Society did not contest the Solicitor's claims regarding the amount that he could properly charge for his costs ($60,000) and the reasons (involving a 'mathematical mistake') why he withdrew an amount exceeding this sum by $15,000.

81 In his submissions, Mr Birch referred to an extract from Mr Dunlop's record of an interview with the Solicitor in which Mr Dunlop, having observed that the withdrawal of $75,000 took place 'without the authority of the clients', made reference to 'the amount that had been verbally agreed between Mr Pizzinga and the clients'. Mr Birch submitted that we should infer from this that the clients knew that a withdrawal on account of costs would take place without them necessarily being notified.

82 We do not think that this inference should be drawn. Mr Greenfield stated expressly that he did not authorise any withdrawal. There is no evidence to suggest that his co-executor, Ms Greenfield, authorised the withdrawal. Mr Dunlop made an express finding that no authority was provided. Furthermore, contrary to the Solicitor's assertion (made to Mr Dunlop and more recently in his affidavit) that the amount of $60,000 for costs had been 'agreed' between him and his clients, Mr Greenfield stated only that at the time of the withdrawal he 'expected' that the figure would be 'between $50,000 and $60,000'. This is consistent with the fact that he later requested a reduction in the amount charged, which the Solicitor granted, bringing the final figure down to $55,000.

83 We accordingly find that neither in the costs agreement nor by virtue of any other arrangement between him and the executors did the Solicitor obtain authority to make withdrawals without notice from the trust account in order to pay his costs.

84 We note also that in consequence of the Solicitor's mistake in calculating the amount properly due to him he had the benefit of the excess amount, ultimately settled at $20,000, for about four months.

85 Under section 498(1) of the Act, the Solicitor's admitted breaches of the Act and the Regulations are 'capable of being unsatisfactory professional conduct or professional misconduct'. The question arising is which, if any, of these two characterisations should be applied to his behaviour.

86 The following passage in the Tribunal's decision in Council of the Law Society of New South Wales v Clapin [2011] NSWADT 83 at [206 - 209] provides guidance:-

206 During a period of about eight years (from 1999 to 2007), the Solicitor extracted funds to pay his own costs and (in some instances) disbursements from no less than fifteen trust accounts without at any time observing the requirements of the relevant legislation...

207 In some instances... the Solicitor obtained authorisation from the client to withdraw funds on account of costs. But this was not enough to relieve him of the statutory obligation to notify the client - for example, by sending an invoice - of his intention to take this step. He consistently failed to comply with this obligation.

208 All these withdrawals accordingly amounted to breaches of section 61(2) of the [Legal Profession Act 1987] or of section 255(1) of the [Legal Profession Act 2004]. Under section 498(1)(a) of the latter Act, they were capable of amounting to professional misconduct. In the circumstances of the present case we hold that they in fact did so.

209 Their significant effect was in each case to deprive the client of the opportunity to give consideration to, and possibly raise questions about, the scale of the costs being charged at the time when they were charged.

87 The conduct here described is manifestly more serious than the Solicitor's behaviour that we are now considering. But in view particularly of the Tribunal's observation in the last paragraph of this extract from Clapin, we conclude that the Solicitor, because he both lacked authority to make any withdrawals from the trust account to pay his costs and failed to provide any bill or other notice of his intention to make such a withdrawal, must be held to have engaged in professional misconduct. Given that only one instance of this specific kind of behaviour has been alleged against him, we would add that it was professional misconduct at the lower end of the scale.

Estate Late Shirley Rumball

88 Matters relating to the withdrawal of $377,743.23 from the trust account for the estate on 21 May 2010 (Particulars B1 to B4). The Solicitor admitted the alleged breach of section 262(4)(b) of the Act, but claimed that he did not intend this breach. In his affidavit, he stated that his intention in making the transfer was to have cleared funds available for use on his clients' behalf, and that at the time he wrongly believed that he could not arrange direct debits from his trust account.

89 Mr Birch submitted, without opposition from Ms Groenewegen, that the Solicitor's conduct in this instance was on all fours with his conduct described in Particulars A10 to A15, and should be similarly characterised.

90 Accepting this submission, we find that the Solicitor's admitted breach of the Act alleged in particulars B1 to B4 amounted to unsatisfactory professional conduct.

91 Matters relating to the alleged transfer of $118,456.46 from the trust account to the Anvin account on 4 August 2010 (Particulars B5 to B7, B9). The omission of B8 from this group of Particulars follows from the Law Society's advice to us (mentioned above) that it did not press this Particular. It may be added here that, according to bank statements annexed to the Dunlop Report, the sum withdrawn was $118,452.46, not $118,456.46.

92 The most important claim by the Law Society regarding this withdrawal was that it amounted to misappropriation. Ms Groenewegen relied on evidence in the Dunlop Report establishing the following: (a) the transfer of $118,452.46 to Anvin was effected on 4 August 2010 without authority from the executors of the estate (Mr Clive Kirkpatrick and Mr Clive Rumball); (b) by 9 August 2010, all of this sum (except for the small amount of $428.49) had been the subject of a number of transfers out of the Anvin account for purposes benefiting the Solicitor; and (c) the most substantial of these transfers was of the sum of $74,419.30, representing partial repayment of a loan that the Solicitor had obtained from two clients, Mr Ramino Pagkaliwagan and Ms Rowena Rosales.

93 The Solicitor made the following statements in his affidavit:-

It was never my intention to misappropriate those monies. However, I admit that what I did was wrong...

The cheque for $118,456.46 was drawn on 4 August 2010. I believe that the cheque was withdrawn to pay funds owing by Anvin to Ramena Pagtalinesen (sic) and Rowena Rosales. I admit that the effect of what I did was to misappropriate those funds although it was always my intention and I did repay those funds...

94 In his evidence in chief at the hearing, the Solicitor stated that at the time of the withdrawal for the purposes of a loan to Anvin, he believed that Mr Kirkpatrick, whom he had known for about 16 years, would have approved such a loan. He relied also on the fact that on 19 August 2010 the amount of $118,452.46 was repaid by Anvin to the estate's trust account, and on an assertion contained in a statement, dated 26 August 2010, that Mr Kirkpatrick had provided to Mr Dunlop. Mr Kirkpatrick said there that although he did not authorise the withdrawal of this amount or its payment to Anvin, he had been made aware of the repayment and was 'entirely comfortable' with the situation.

95 Mr Birch's submissions included the propositions that (a) Mr Kirkpatrick's ratification ex post facto of the loan could support an argument that there was, after all, no misappropriation and (b) the Solicitor's intention, which he put into effect, to repay the withdrawn sum of $118,452.46 constituted a mitigating factor.

96 In deciding whether the Solicitor, in withdrawing this sum and applying almost all of it for his own purposes, engaged in misappropriation, we take into account the principle, stated by the Supreme Court of Victoria in Brereton v Legal Services Commissioner [2010] VSC 378 and applied by this Tribunal in Council of the Law Society of New South Wales v Simpson [2011] NSWADT 242 and Council of the Law Society of New South Wales v Clapin [2011] NSWADT 83, that an allegation of misappropriation against a legal practitioner in disciplinary proceedings is not made out unless 'dishonesty' is proved.

97 In Brereton, Bell J gave the following explanation of the concept of 'dishonesty', at [53 - 54]:-

53 While an allegation of dishonesty requires consideration of the person's mental state, in neither the criminal nor the civil context is it necessary to establish that the person subjectively knew or believed that the actions concerned were dishonest. What must be established is that the person subjectively intended to do the acts which are said to be objectively dishonest by the ordinary standards of reasonable and honest people... Thus the course to be adopted in determining whether conduct is dishonest was explained by Toohey and Gaudron JJ in Peters v R (1998) 192 CLR 493 as follows (at 503-504):

In a case in which it is necessary for a jury to decide whether an act is dishonest, the proper course is for the trial judge to identify the knowledge, belief or intent which is said to render that act dishonest and to instruct the jury to decide whether the accused had that knowledge, belief or intent and, if so, to determine whether, on that account, the act was dishonest ... If the question is whether the act was dishonest according to ordinary notions, it is sufficient that the jury be instructed that that is to be decided by the standards of ordinary, decent people.

54 The steps involved in this formulation are: (1) identify the knowledge, belief or intent which is said to render the acts dishonest; (2) determine whether the accused (or defendant in the civil context) subjectively had that knowledge, belief or intent; and (3) determine whether, on that account, the acts were objectively dishonest according to the standards of ordinary and decent (that is reasonable and honest) people.

98 We agree with the following argument on this question advanced by Ms Groenewegen: (a) the Solicitor knew that his duty with regard to the funds in the trust account was to retain them and, in due course, to distribute them among, or at the direction of, the beneficiaries; (b) to his knowledge, his undisclosed withdrawal of the sum of $118,452.46 and his use of most of this sum for his own benefit constituted breaches of this duty; (c) even though he intended to repay the money that he had withdrawn to its rightful owners, his appropriation of it without obtaining their consent would be regarded as dishonest by 'ordinary and decent' people in the people.

99 We accordingly find that this important allegation of misappropriation made by the Law Society has been established. Furthermore, the Solicitor's misappropriation of this sum of $118,452.46 would clearly be regarded as 'disgraceful and dishonourable' by reputable members of the legal profession. In addition, we consider it to be 'conduct of an Australian legal practitioner... occurring in connection with the practice of law... that would... justify a finding that the practitioner is not a fit and proper person to engage in legal practice'. It therefore amounted to professional misconduct, both at common law and under section 497(1)(b) of the Act.

100 We turn now to consider the other matters arising from the Solicitor's conduct in withdrawing $118,452.46 from the trust account for the Rumball estate.

101 The Solicitor admitted the alleged breaches of section 264(2)(a) and (b) of the Act and of clauses 68(4), 69(4) and 70(9) of the Regulations, but claimed not to have intended these breaches. The only observation that he made on this matter in his affidavit was the following: 'I described the cheque in the way that I did as a record of my dealings with the money'.

102 The description to which he referred was that recorded on the cheque butt. As stated in Particular B5, the payment was depicted as being to Anvin for 'The Estate of S O Rumball - distribution of Estate on behalf of Exec'.

103 Our findings on the allegations in Particulars B5 and B7 are similar to those that we made with regard to Particular A4 (see [45 - 49] above). Once again, we do not see how the Solicitor can plausibly claim not to have intended to contravene section 264(2)(b). On his own admission, he withdrew the relevant trust money 'in order to pay funds owing by Anvin' to two of his clients, yet he entered up the withdrawal in two documents (a cheque butt and a trust account statement) as constituting a distribution of funds to the beneficiaries of the estate.

104 Accordingly, there are strong grounds for believing that these entries were made in the knowledge that they were false and for the purpose of concealing what in fact he had done with the money. In addition, we regard as misleading his brief statement on this matter in his affidavit. We find it hard to believe that he regarded the entry on the cheque butt as a genuine record of what he 'did with the money'.

105 Because the Law Society did not allege an intention to breach section 264(2)(b) of the Act, we do not make a formal finding to this effect. But his breaches must be treated as displaying, to say the least, a lamentable failure to comply properly with his statutory obligations. Our conclusions are that the Solicitor committed breaches of this provision as alleged in Particulars B5 and B7 and that these breaches amounted to professional misconduct under section 498(1)(a).

106 In our opinion, the failures of the Solicitor, alleged in Particular B6, to make required entries in the trust payments cash book, the trust receipts cash book or the trust ledger account relating to the estate within 5 working days would not, standing alone, amount to professional misconduct or unsatisfactory professional conduct. In so ruling, we take into account the possibility that some or all of these entries might have been made soon after the expiry of the 5-day time limit.

107 The Solicitor admitted the statements attributed to him in Particular B9, but claimed not to have intended to mislead the Investigator when making them. He made them on 19 August 2010. They were to the effect that when Anvin borrowed the sum of $118,456.46 from the Rumball estate, 'the intention' was to transfer it to the beneficiaries by BPay, and that this money was 'sitting in Anvin's account' until it was repaid on that day to the trust account.

108 In dealing with this matter in his affidavit, the Solicitor stated:-

I was trying to transfer monies to the clients pursuant to their instructions. Ms Pagkaliwagan and Ms Rosales required repayment of their loan from Anvin to settle their sale to meet a shortfall on the discharge of their mortgage to ING Bank. I admit that I used the funds from the Rumball Estate to meet that shortfall.

109 In addition to the factual matters already outlined, the following are of particular relevance in the present context. By 9 August 2010, virtually all of the amount of $118,452.46 that the Solicitor had transferred from the trust account to the Anvin account had been paid out of the latter account for purposes benefiting him. As is revealed in a bank statement relating to this account included in the Dunlop Report, between 9 and 18 August 2010 the credit balance in the account remained relatively low. The highest figure that it reached was $18,156.62 (on 17 August). On 19 August, a sum of $140,000 was deposited into the account. This made it possible for the repayment of $118,452.46 to the trust account to occur later that day.

110 These additional facts are of particular significance when considering the Solicitor's representation to the Investigator that the sum of $118,452.46 withdrawn from the trust account was 'sitting in Anvin's account' until it was 'repaid today' (i.e., on 19 August 2010). In fact, the money had not been 'sitting in' the Anvin account at all. Virtually all of it had been withdrawn within five days of its receipt (i.e., by 9 August) and applied for the Solicitor's benefit. The injection of funds needed to make possible the repayment to the trust estate did not occur until the very day of repayment: 19 August. This was also the day on which the Solicitor told Mr Dunlop that 'the money' had been 'sitting in' the account.

111 The circumstances here resemble those surrounding the Solicitor's misleading of the Investigator, as alleged in Particular A3, as to the purpose of his withdrawal of $145,000 from the Nightingale estate (see [39 - 44] above). We find it highly improbable, even allowing for the Solicitor's stress and anxiety during his interviews with Mr Dunlop, that at that time he genuinely believed in the truth of his assertion that 'the money' had been 'sitting in' the Anvin account.

112 Despite these considerations, however, we do not make a finding to the effect that the Solicitor intended to mislead the Investigator. Our reason is that this was not alleged, either in the Grounds or in the Particulars of the Amended Application. In oral submissions Ms Groenewegen confirmed that the Law Society made no such allegation.

113 In the present context, we accept once again her submission that the stress and anxiety suffered by the Solicitor when responding to Mr Dunlop's questions does not constitute a 'reasonable excuse' under section 674(1) of the Act.

114 For the foregoing reasons, the allegation in Particular B9 is made out. The Solicitor's conduct constituted a breach of section 674 of the Act and was therefore capable, under section 498(1)(a) of being professional misconduct or unsatisfactory professional conduct. It also constituted a breach of section 676(2). We find that it amounted to professional misconduct under section 676(4).

115 The final matter arising in relation to the Rumball estate is the allegation made in Particular B10. This is that the loan that the Solicitor repaid from the Anvin account, in the circumstances just outlined, was a loan of $120,000 that Anvin had obtained, pursuant to an agreement dated 5 February 2010, from two clients of the Solicitor (Ramino Pagkaliwagan and Rowena Rosales), in breach of Rule 12 of the Rules. This loan followed the Solicitor's receipt of funds on their behalf when acting for them in a sale of property owned by them. This sale was settled on 29 January 2010.

116 The Solicitor admitted the allegation of breach of Rule 12, adding that he did not intend the breach. Mr Birch stated at the hearing that the Solicitor accepted that the agreement for the loan was 'probably' made before the settlement of the sale of the clients' property. On this basis, the provision within Rule 12 that was breached was Rule 12.1.1.

117 Under section 498(1) of the Act, this admitted breach of a clause of the Rules is 'capable of being unsatisfactory professional conduct or professional misconduct'. It has frequently been emphasised (see for example the judgment of Hope JA in Law Society of New South Wales v Moulton [1981] 2 NSWLR 736 at 739-740) that a solicitor who borrows money from a client will run a serious risk of being held guilty of professional misconduct at common law unless a number of steps are taken to ensure the fairness of the transaction. These include, by way of example, ensuring that the client receives independent legal advice.

118 In the present case, however, we have no evidence as to whether or not any such steps were taken. Furthermore, the Law Society has not alleged that the Solicitor's conduct in receiving the loan amounted to professional misconduct at common law, or indeed under section 497(b) of the Act. It has alleged only that there was a breach of Rule 12.

119 In view of these factors, we consider that this breach should be characterised as an instance of the lesser of the two disciplinary 'offences', i.e., as unsatisfactory professional conduct.

Purchase by Mr and Mrs Cannon

120 The Solicitor admitted that on 12 July 2010 he intermingled trust funds in breach of section 260 of the Act, as alleged in Particular C4, but claimed not to have intended to do so. He said in his affidavit that his purpose was to ensure that cleared funds were available for completing the purchase by Mr and Mrs Cannon on the due date. It was, he stated, a transaction in which time was of the essence.

121 We accept Mr Birch's submission, which Ms Groenewegen did not oppose, that the Solicitor could not have sought to obtain any personal advantage from managing his clients' funds in this way.

122 Having regard to the terms of section 498(1)(a) of the Act, we find that this breach of section 260 amounts to unsatisfactory professional conduct.

Purchase by George Popovic

123 The Solicitor admitted that on 21 April 2010 he intermingled trust funds in breach of section 260 of the Act, as alleged in Particular D3, but claimed not to have intended to do so. He testified that at the time when Mr Popovic paid $46,000 into Anvin's account as part of the price of the property being purchased at Concord, Anvin was in debt to Mr Popovic for money previously borrowed. His sole aim, to which he adhered, was to use the $46,000, along with the money owed by Anvin, to complete the purchase on Mr Popovic's behalf.

124 We accept Mr Birch's submission, which Ms Groenewegen did not oppose, that the Solicitor had 'marshalled' into the Anvin account all of the funds needed for the purchase, and that he could not have sought to obtain any personal advantage from managing his client's funds in this way.

125 Having regard to the terms of section 498(1)(a) of the Act, we find that this breach of section 260 amounts to unsatisfactory professional conduct.

John Cremen

126 Failure to disclose costs (Particulars E(i)(1) to (4)). In his Reply and Amended Reply, the Solicitor did not admit the Law Society's allegation in the last of these Particulars. This was that the two costs agreements sent by him to Mr Cremen (on 18 and 29 September 2009 respectively) did not comply with subsection (1) of section 309 of the Act.

127 In his outline of submissions, however, Mr Birch conceded on the Solicitor's behalf that the agreements did not contain the matters required by paragraphs (b)(iii), (b)(iv), (g), (i), (j), (k) and (possibly) (l) of this subsection. At the same time, he argued that the agreements did contain what he called 'the most important pieces of information': namely, the basis and rates of the charges for the work to be done by the Solicitor's firm, an estimate of the total fees that would be payable and the identity of the contact person within his firm.

128 Having regard to the terms of section 498(1)(a) of the Act, we find that the Solicitor's breaches of section 309(1) amount to unsatisfactory professional conduct.

129 Failure to provide an itemised bill of costs within 21 days (Particulars E(ii)(1) to (6)). The Solicitor admitted that, in contravention of section 332A of the Act, he failed to provide to Mr Cremen an itemised bill of costs within 21 days of receiving a request to do so on 18 February 2010 - i.e. on or before 11 March 2010. He did not provide a bill until 11 June 2010.

130 Having regard to the terms of section 498(1)(a) of the Act, we find that this breach of section 332(A) amounts to unsatisfactory professional conduct.

Summary of our findings

131 Our findings against the Solicitor, classified by reference to the nine Grounds alleged by the Law Society, may be summed up as follows. References to relevant clients, Particulars and paragraphs in the foregoing reasons are included.

132 1. Misappropriated trust funds. Two findings of professional misconduct, both at common law and under section 497(1)(b) of the Act, in Nightingale (A3 to A5: [38]) and Rumball (B5 to B7, B9: [99]).

133 2. Intermingled trust funds. Our findings under this Ground are incorporated with those made under Ground 5, since they derive from section 260 of the Act.

134 3. Provided to the Trust Account lnvestigator and to a third party trust account statements or trust ledgers that did not disclose the true position in respect of trust monies. One finding of professional misconduct under section 498(1)(a), in Nightingale (A8: [67]). This also involved a breach of Rule 34 of the Rules, and therefore falls under Ground 7 as well as Ground 3.

135 4. Misled the lnvestigator on numerous occasions during his investigation. Two findings of professional misconduct under section 676(4), in Nightingale (A3: [44]) and Rumball (B9: [114])

136 5 and 6. Breached Sections 255(1), 259(1), 260, 262(1)(a), 261(1)(b), 264(2)(a), 264(2)(b) and 674 of the Legal Profession Act, 2004 ['the Act'], and breached clauses 68(4), 69(4), 70(9), 88(2), 88(3), 88(4) of the Legal Profession Regulation 2005 ['the Regulations']. Six findings of professional misconduct under section 498(1)(a), comprising three in Nightingale (A4, A5, A16: [49], [53], [87]) and three in Rumball (B3, B5, B7: [90], [105]). Also five findings of unsatisfactory professional misconduct under section 498(1)(a), comprising two in Nightingale (A10, A13: [76]), one in Rumball (B6: [106]), one in Cannon (C4: [122]) and one in Popovic (D2: [125]).

137 7. Breached Rules 12 and 34 of the Revised Professional Conduct and Practice Rules 1995 ['the Rules']. One finding of unsatisfactory professional conduct under section 498(1)(a), in Rumball (B10: [119]), in addition to the finding noted above under Ground 3.

138 8. Delayed the Cremen matter. This Ground was not pressed.

139 9. Failed to disclose his costs. One finding of unsatisfactory professional conduct under section 498(1)(a), in Cremen (E(1)(iv): [128]).

140 10. Failed to provide an itemised bill for costs to Mr Cremen for a period of 4 months. One finding of unsatisfactory professional conduct under section 498(1)(a) (E(ii)(v): [130]).

141 A different, and ultimately more revealing, way to depict these findings is to point out that all except one of the twelve findings of professional misconduct and several of the eight findings of unsatisfactory professional misconduct relate directly or indirectly to two acts of misappropriation from trust funds committed by the Solicitor: his withdrawal of $145,000 from the Nightingale estate on 27 October 2008 and his withdrawal of $118,452.46 from the Rumball estate on 4 August 2010. The only instance of professional misconduct occurring independently of these two misappropriations was the Solicitor's unauthorised withdrawal (on 29 April 2010) of $75,000 from the Nightingale estate to pay his costs. The remaining findings of unsatisfactory professional conduct related to the Solicitor's conduct in borrowing money from Mr Pagkaliwagan and Ms Rosales on 5 February 2010, intermingling trust funds belonging to Mr Popovic (21 April 2010) and to Ms Cannon (12 July 2010) and in contravening regulatory provisions relating to costs during his dealings with Mr Cremen (29 September 2009 and 11 March 2010).

Consequential orders: discussion

142 The general principles to be applied. In support of the Law Society's claim for an order under section 562(2)(a) of the Act removing the name of the Solicitor from the Roll, Ms Groenewegen drew our attention to well-known authorities emphasising the protective and, as she put it, 'educative' role of the jurisdiction being exercised.

143 With specific reference to the allegations of misappropriation of clients' funds, which we have found to have been established, she relied in her outline of submissions on a number of decisions of the Court of Appeal. It is sufficient for present purposes if we refer to four of them.

144 First, she quoted the following passage in the judgment of Street CJ (with whom Reynolds and Samuels JJA concurred) in Law Society of New South Wales v Jones, Unreported, Court of Appeal, 29 July 1978:-

Reliability and integrity in the handling of trust funds are fundamental prerequisites in determining whether an individual is a fit and proper person to be entrusted with the responsibilities belonging to a solicitor. Members of the public, many of them wholly inexperienced and unskilled in matters of business or of law, inevitably must put great faith and trust in the honesty of solicitors in the handling of moneys on their behalf. The Court must ensure that this trust is not misplaced.

145 A second case to which Ms Groenewegen referred was Bolster v Law Society of New South Wales, Unreported, Court of Appeal, 20 September 1982 (BC8211696). In that case, the Court of Appeal confirmed an order of removal from the Roll made against a solicitor whose conduct was described by Moffitt P as follows (BC8211696 at p 1):-

... he mixed his own affairs with those of his clients, principally by his participation, as their solicitor, in the lending by them of money to a finance company in which he had an interest and which then made advances to himself and his family and companies in which they had an interest. He acted as solicitor for these clients in these transactions without making a full and proper disclosure of his interest and without advising his clients to take independent legal advice.

146 The Court held that this conduct was professional misconduct and that removal from the Roll was warranted even though the solicitor's actions did not cause his clients to lose money.

147 Thirdly, Ms Groenewegen quoted the following passages from Dupal v Law Society of New South Wales, Unreported, Court of Appeal, 26 April 1990:-

In an appeal such as the present, the Court disposes of the case before it by reference to criteria of general application. They should be clear and simple. They should be such as to leave no doubt in the mind of a practitioner in financial difficulties, exposed to the temptation of using without clear authority the funds of another, the consequences that will flow for the right to practise when such misuse of funds is discovered. (Kirby P, at p 1)

... the normal consequence of the misuse of entrusted funds by a solicitor, and a finding of wilful breaches of the statutory prohibition in that regard, is removal of the name of the solicitor from the roll. (Kirby P, at pp 2-3)

This Court would be departing from a long course of authority if it were to allow the appeal and substitute a period of suspension for the order of the Tribunal removing the appellant from the roll. Counsel were not able to refer us to any case where a solicitor found guilty of misappropriation or wilful contraventions of s41(1) [the then equivalent of section 255(1) of the Act] has not been struck off the roll. Any decision to the contrary would signal to the profession and the community that this Court was no longer insisting on solicitors maintaining the highest standards of personal honesty and integrity in their dealings with clients and the public and in the handling of monies entrusted to their charge. (Handley JA, with whom Priestley JA agreed, at p 12)

148 The fourth case amongst those cited by Ms Groenewegen is one that we have already mentioned, Law Society of New South Wales v Moulton [1981] 2 NSWLR 736. In that case, the respondent solicitor systematically borrowed money from clients. The interest that he paid was at a significantly lower rate than would normally have been paid on such loans. At no time did he suggest to any of the clients that they should obtain independent legal advice. There was no finding that he had exerted influence on any of the clients to persuade them to agree to these transactions.

149 Two specific aspects of the judgment of Hope JA are pertinent in the present context. The first is that, in line with Moffitt P's ruling in Bolster, he treated as irrelevant the fact that, ultimately, the clients of the respondent solicitor suffered no loss (see his judgment at 748-749). The second is his ruling that solicitors could not rely on their failure to realise that conduct of the type involved in the case was improper as a defence in proceedings for professional misconduct. On this matter, Hope JA said (at 740-741):-

A failure to understand and appreciate the care that must be taken by a solicitor who wants to make use of his trusting client's money for his own purposes would generally show an unfitness to remain on the roll. In so far as Mr Moulton's ignorance should be treated as a lack of knowledge rather than a lack of standards, it was not ignorance of some esoteric or difficult corner of the law; it was an ignorance of general principles applicable to common activities of a solicitor in which, for the most part, Mr Moulton was regularly engaged, and it was an ignorance which he took no steps to remedy.

150 In his submissions, Mr Birch did not significantly contest the principles emerging from these authorities, except in relation to one matter. He pointed out that in a comparatively recent decision, Council of the Law Society of NSW v Doherty [2010] NSWCA 177, the Court of Appeal displayed a distinctly more flexible attitude than is discernible in Dupal to the question whether removal from the Roll is required when a finding of misappropriation has been made.

151 The proceedings in Dupal came to the Court on appeal from this Tribunal. The Tribunal made a number of findings of professional misconduct against the respondent solicitor, including that he had 'misappropriated the sum of $35,000 belonging to Mr Rafter'. It rejected the claim of the Law Society that the respondent should be struck off and made a number of less serious orders by way of 'penalty'. The Law Society appealed unsuccessfully against this decision regarding 'penalty'.

152 In the judgment of Young JA, with whom Tobias and Campbell JJA agreed, the following passages are relevant to the present proceedings:-

30 However, the Law Society submitted that once the findings to which the Court referred at [5] above were made, on those findings alone, the Tribunal had little alternative but to strike the name of the respondent from the roll.

31 The Tribunal did not accept that submission. At paras [46]-[48] of its second judgment, it said that that proposition was not a proper summary of the authorities as each case depended on its own facts and the Tribunal and the Court always retained a discretion as to what order should be made for the protection of the public.

32 Before this Court, it was clear that the Law Society was submitting that in the ordinary case, where there is a finding of misappropriation by a solicitor, the appropriate order is one of striking off the roll, see, particularly Dupal v Law Society (Court of Appeal of New South Wales, 26.4.1990, unreported, per Kirby P and Handley JA).

33 However, it would appear that the Tribunal construed this submission as one to the effect that where there is a finding of misappropriation there must be an order for striking off. It properly rejected that idea.

34 The Law Society's submission was that this was at least the ordinary case and that when one added all the other unsatisfactory aspects of the conduct of the respondent, in particular that the respondent still does not appear to recognize the gravity of his misconduct, striking off was the only possible outcome of the proceedings.

35 It is not necessary to examine all the authorities referred to by the Tribunal or in the written submissions on this point. However, for myself, I would not agree that, in view of the strong words of the judges in Dupal, it was open to the Tribunal, based on its own previous decisions, to reach the view it expressed at [141] that, even in an "ordinary" case (of misappropriation) an order for striking off might not be appropriate.

36 However, whatever might be meant by the expression "ordinary case", it was open to the Tribunal (and to this Court) to say that the present is less serious than the "ordinary" case.

37 The respondent contended that, although "technically" there was a misappropriation of Mr Rafter's $35,000, he genuinely believed that he was entitled to use the money the way he did.

38 The remarks of the Tribunal on this point are not entirely consistent. It seems to have accepted that the respondent genuinely believed that he was able to employ Mr Rafter's $35,000 in the Byron Bay project. However, it took the view that there was no rational basis for such belief. At [105] of the first judgment, it indicated that if there was such a belief it was "not founded on the contract or on reality" and that the respondent in his own mind had constructed a scenario which he considered relieved him from refunding Mr Rafter's $35,000.

39 The respondent says that he had a bona fide belief that he could use the money and that he had no fraudulent intent.

40 The Law Society accepted that it never alleged fraud. However, the transaction revealed that the respondent was commercially unsophisticated, motivated by greed, blind to his basic duties as a solicitor and to the risks of professional practice and inclined to prefer his own interests to that of his clients. This is a prime example of its submission that the respondent even now has no proper appreciation of his duties as a solicitor.

41 There was discussion both before the Tribunal and before us as to the width of the word "misappropriation". The base meaning of the word is "wrongful conversion" (Stroud's Judicial Dictionary, 7th ed, vol 12 at 1689). It must be noted that in most cases of appropriation of the property of another, claim of right is a good defence and to establish a claim of right, all the accused need show is that he or she had an honest belief in the claim and not also that that belief was based on logic or reason: R v Nundah (1916) 16 SR (NSW) 482, a proposition that has never been doubted.

42 Mr Lindsay complains that the respondent cannot both not cross appeal against the finding of misappropriation and take the view on "penalty" that there was no real misappropriation. He submits that the respondent's submissions are a collateral attack on the Tribunal's findings on "liability" which should not be permitted in the deliberate absence of a cross appeal.

43 I do not sustain that complaint. It seems to me that the respondent is saying that whilst he accepts the finding, it is wrong to class every finding of misappropriation in the same light when considering the proper order to be made and that that is within his rights. As the word "misappropriation" has a wide ambit of meanings, this must be correct.

44 As the Tribunal points out, there have been a number of cases where "misappropriation" has been found, but no striking off order has been made. Although some of these decisions may be a tad suspect, others are not...

59 There are a variety of orders which can be made if a solicitor is found guilty of professional misconduct ranging from a reprimand to striking off the roll.

60 The authorities justify the proposition that an order for striking off is made when the court considers that the Law Society has established that the solicitor is "permanently unfit to practice," or as this Court more precisely held in Stanoevski v The Council of the Law Society of NSW [2008] NSWCA 93, he or she is likely to be unfit to practice for the indefinite future...

65 Complaint (B) involved a finding of misappropriation. As noted earlier, the authorities establish that in the "ordinary case", where a solicitor has been found to have been guilty of misappropriation, the result is an order for striking off the roll absent exceptional circumstances.

66 It seems to me that as good an approach as any to the proper order is to look at the hypothetical "ordinary" case and examine whether the present case is more or less serious than such a case and then consider whether the Tribunal's order was "within the range" for such a case...

69 The factors pointing the other way are that the misappropriation of the $35,000 was a one off case and is at least coloured by the surrounding circumstances...

71 Although I have considered this a borderline case, I consider that the material does not justify me being satisfied that the respondent is unfit to practice as a solicitor for the indefinite future.

153 We agree with Mr Birch that these observations in a recent decision of the Court of Appeal must be taken to have diluted, to some degree, the propositions stated in Dupal. At the same time, the Court in Doherty did state (at [65]) that 'in the "ordinary case", where a solicitor has been found to have been guilty of misappropriation, the result is an order for striking off the roll absent exceptional circumstances'.

154 We draw attention also to the Court's restatement, at [60], of the criterion for a striking off order formulated in Stanoevski v The Council of the Law Society of NSW [2008] NSWCA 93. There must be a finding that the practitioner is 'likely to be unfit to practice for the indefinite future'.

155 It is well recognised that this question of fitness to practise must be determined as at the time of the hearing, not the time or times when the relevant misconduct occurred: see e.g. A Solicitor v Council of the Law Society of New South Wales (2204) 216 CLR 253; [2004] HCA 1 at [21]. The approach to be adopted by a court or tribunal when determining whether a practitioner who has engaged in professional misconduct at an earlier time should be held to be unfit to practise at the time of the hearing and 'for the indefinite future' has been the subject of a number of decisions in the High Court and Court of Appeal decisions.

156 We obtain guidance on this matter from a passage in the judgment of McColl JA (with whom Campbell and Meagher JJA agreed) in a very recent decision of the Court of Appeal, Prothonotary of the Supreme Court of New South Wales v Liverani [2012] NSWCA 325. It was delivered on 9 October 2012, after the hearing in these proceedings. At [34 - 36], her Honour said:-

34 As I have said, the question whether the opponent is a fit and proper person to remain on the Roll of local lawyers must be determined at the time of hearing. The same is true of the question of "good fame and character": Ex parte Tziniolis; Re The Medical Practitioners Act (1966) 67 SR (NSW) 448 (at 475) per Holmes JA.

35 As to whether historic misconduct demonstrates present unfitness or absence of good fame and character, Walsh JA (with whom Wallace P agreed) said in Ex parte Tziniolis; Re The Medical Practitioners Act (at 461):

"Reformations of character and of behaviour can doubtless occur but their occurrence is not the usual but the exceptional thing. One cannot assume that a change has occurred merely because some years have gone by and it is not proved that anything of a discreditable kind has occurred. If a man has exhibited serious deficiencies in his standards of conduct and his attitudes, it must require clear proof to show that some years later he has established himself as a different man."

His Honour's remarks were also approved in Health Care Complaints Commission v Litchfield (1997) 41 NSWLR 630 (at 637) per Gleeson CJ, Meagher and Handley JJA.

36 In Dawson v Law Society of New South Wales (New South Wales Court of Appeal, unreported, 21 December 1989, at 6 - 7) Mahoney JA said:

"Repentance is relevant, at least in the ordinary case, because it assists the conclusion that the applicant has left his previous standards or values and adopted more appropriate ones. Without that, his conduct in the future is unlikely to be acceptable."

157 Specific features of the Solicitor's misconduct. In this connection, the matters emphasised by Ms Groenewegen in her outline of submissions included the following. In his misappropriations of the funds of the Nightingale and Rumball estates, the Solicitor, 'in a substantial and sustained way', mixed his clients' affairs with his own. He 'grossly preferred his own interests' to theirs, to their 'potential financial detriment'. Indeed, he 'used entrusted client monies as a cheap reservoir of unsecured funds'. He did not advise his clients about these transactions and paid 'scant regard to documenting or securing' them. His claims that he did not realise that he was contravening the Act, the Regulations and the Rules either were not to be believed or showed that he was so lacking in elementary knowledge and understanding of his duties as a solicitor that he was and is 'unfit to be such'.

158 The features of the Solicitor's misconduct to which Mr Birch referred were as follows: (a) the Solicitor's belief (subsequently proved to be correct) that the withdrawal of $118,452.46 from the Rumball estate would have been permitted by the executors if they had been asked about it; (b) the Solicitor's legitimate concern, exemplified by some of his breaches of trust account requirements in the Nightingale, Rumball, Cannon and Popovic matters, to ensure that funds would be available as necessary to settle transactions on behalf of his clients; (c) the fact that the Solicitor repaid the funds misappropriated from the Nightingale and Rumball estates before Mr Dunlop's investigation commenced; and (d) the fact that no client suffered any loss from any of the Solicitor's breaches of duty.

159 Our own conclusions on this aspect of the case commence with the observation that the third of these four submissions advanced by Mr Birch is not wholly supported by the evidence. The Solicitor did not in fact repay the amount of $118,452.46 misappropriated from the Rumball estate until 19 August 2010, which was the day following his first interview by Mr Dunlop.

160 In our opinion, the following further aspects of the Solicitor's misconduct should also be brought into consideration: (a) he did not pay any interest on the $145,000 improperly withdrawn from the Nightingale estate until Mr Dunlop questioned him about it, nearly two years after the withdrawal; (b) his misdescriptions of this withdrawal and of the withdrawal of $118,452.46 from the Rumball estate in trust account records maintained by him (Particulars A4, B5 and B7) involved, at best, lamentable failures to comply with his statutory obligations as a solicitor, or alternatively constituted deliberate attempts to conceal the truth; and (c) the trust account statement that he sent to the Guardian contained representations that he knew to be untrue (this follows, as we explained above, from his admission of Particular A8).

161 The Solicitor's psychiatric condition. The expert evidence relating to this is summarised above at [25 - 26].

162 Ms Groenewegen's principal submissions based on this evidence were twofold: (a) the report by Associate Professor Menzies indicated that the Solicitor's depression had lifted, but other underlying problems had not been resolved; and (b) one of these problems was that his 'inherent' need for 'positive feedback' from his clients, as diagnosed by Dr Allnutt, would induce him again to adopt irregular procedures in handling client's funds (as, for example, in the Cannon matter) if he were permitted to resume legal practice.

163 Mr Birch contended that Dr Allnutt's report revealed 'the abnormal mental state and stress' to which the Solicitor was subject at the time of his misconduct, but that according to the recent report by Associate Professor Menzies he had largely recovered from his psychological problems. It followed, according to Mr Birch, that behaviour such as has prompted these proceedings would be unlikely to recur if, subject to appropriate restrictions, the Solicitor were again to practise. He contested Ms Groenewegen's claim that there were still personality defects, such as an inherent need for positive feedback from clients, that would give rise to further problems.

164 We make two observations about these submissions. First, we do not attach great significance to the question whether the Solicitor still has a need for 'positive feedback from clients'. The misconduct of prime importance in this case was not the consequence of any such 'need'. Secondly, Mr Birch's submission that the Solicitor was found by Dr Allnutt to have been subject to 'abnormal mental state and stress' at the time of his misconduct is undermined, to a degree, by Dr Allnutt's comment that the depression started to diminish in January 2009. This was about 18 months before the second of the two withdrawals of money by the Solicitor constituting misappropriation of trust funds.

165 The Solicitor's attitude regarding his misconduct, following its disclosure. Ms Groenewegen argued in her outline of submissions that 'the Tribunal should be unimpressed by Mr Pizzinga's claims that he has now become enlightened as a result of the sage advice of a Trust Account Inspector and that he has a new appreciation of his duty.' She maintained that 'his claims that he never intended any harm or to deprive his clients of monies simply highlight the fact that Mr Pizzinga lacks in a visceral way an understanding of the importance and extent of his duty to his clients, if not in a technical sense then in an ethical sense'.

166 Mr Birch pointed out that the Solicitor had made 'detailed admissions' to the Investigator, to the Professional Committee of the Law Society during its investigation of the matter and to the Tribunal. He drew attention also to evidence (in the Solicitor's affidavit) that the Solicitor had completed training courses in trust accounting and ethics at the College of Law and had 'sought out established professionals in the accounting industry' to provide professional support.

167 Mr Birch's chief submissions on this issue were that the Solicitor had (a) gained insight into the factors that contributed to his breaches of duty, particularly those of 'excessive workload' and failing to keep 'appropriate separation' between his practice as a solicitor, his accounting practice, his financial dealings and his borrowings from clients; (b) come to recognise the importance of peer support and of paying 'careful attention to professional and ethical rules and limitations'; and (c) shown genuine contrition and regret for his misconduct.

168 It appears to us, however, that the 'insights' gained by the Solicitor since the Investigation commenced do not include a sufficient understanding of the scale of his misconduct and that his 'contrition and regret' have not brought him to the stage where he fully accepts responsibility for it. The evidence for this chiefly comprises three misleading statements in his affidavit, about which we made critical observations earlier in these reasons (see [46 - 48], [63 - 64] and [101 - 104]).

169 In the first place, he alleged that the three entries regarding the withdrawal of $145,000 from the Nightingale estate described it as 'an investment loan'. In fact, (a) only one entry used this phrase and (b) the phrase gave a wholly false picture of the matter. Secondly, the reasons that he gave in his affidavit for claiming not to have intended to mislead the Guardian when he provided the seriously misleading trust account statement for the Nightingale estate entirely lacked credibility. Thirdly, he claimed that the entry that he made on a cheque butt relating to the withdrawal of $118,452.46 from the Rumball estate constituted 'a record of my dealings with the money'. Patently, this was not the case.

170 Each of these three statements in the Solicitor's affidavit, along with a great number of other statements by him, were initially made in the Response, dated 5 November 2010, that he sent to the Law Society following receipt of its complaint against him. When he swore his affidavit for these proceedings on 3 April 2012, he had ample opportunity to correct what he had previously said. But so far as these three statements are concerned, he did not make any use of this opportunity. He continued to put forward, in a sworn statement, these unconvincing excuses for misconduct that he had formally admitted in his Reply.

171 For these reasons, we are not persuaded by the submission of his counsel that he has shown genuine contrition, and we believe that he has not yet fully understood the scale of his misconduct or accepted full responsibility for it.

172 The consequences of permitting the Solicitor to resume practice. In this connection, the principal submission put by Ms Groenewegen was that, since the Solicitor still maintained his practice as an accountant, authorising him to practise again as a solicitor would again create opportunities for him to enter into impermissible transactions with his legal clients. It would, she submitted, be undesirable to permit him to conduct these two types of practice side by side.

173 In lieu of removal from the Roll, the Solicitor, through his counsel, sought an order that he be permitted to resume practice under a conditional certificate that would require supervision of him by a 'mentor'.

174 Two of the witnesses who provided affidavits in the nature of testimonials for him, Anthony Sakr and Christine Turnbull, also stated that they would be prepared to take on this supervisory role. Each of them proposed that it would involve fortnightly visits to the Solicitor's office, during which they would review his files and financial records and discuss professional issues with him and with his employees. From time to time, they would also 'randomly visit' his office without notice in order to review his files. When his practising certificate, subject to appropriate restrictions, was granted, they would meet him to 'put in place appropriate systems, practices and procedures.

175 Mr Sakr and Ms Turnbull indicated in their affidavits that they were solicitors of long standing, that they were acquainted with the Solicitor and that they knew of the matters alleged against him by the Law Society.

176 Mr Birch proposed that if a restricted practising certificate were issued, the Solicitor would also be required to undertake not to borrow from any clients, legal or accounting.

177 Testimonials. The three principal testimonials put before us were from Dr George McIvor, a radiologist; Dr Philip Vladica, also a radiologist; and Mr Joseph Silva, an employer relations manager. They stated that they were accounting clients, and also formerly legal clients, of the Solicitor.

178 These three deponents testified that they were long-standing personal friends of the Solicitor and that, although they knew of the allegations against him, they continued to have complete confidence in him. They regarded him as an honest person of good character and as very capable professionally. Dr McIvor stated that he continued to value his professional relationship with the Solicitor, that he had recommended the Solicitor to many colleagues and that none of them had 'ever been let down' by the Solicitor.

179 Mr Sakr's affidavit included a statement that he believed the Solicitor to be an 'honest person'. Ms Turnbull stated that she did not believe him to be dishonest, but that he lacked 'a certain amount of knowledge and direction in the area of practice management'.

Our orders

180 Having carefully considered the foregoing evidence and arguments, we have determined that we should make the order sought by the Law Society, namely, that the name of the Solicitor be removed from the Roll of local lawyers.

181 This follows from our conclusion that he is 'likely to be unfit to practise for the indefinite future'. This conclusion is chiefly based on the following considerations: (a) we have found him guilty of two separate acts of misappropriation of trust funds, occurring nearly two years apart from each other and both involving dishonesty on his part; (b) associated with this conduct by him were a number of breaches of the Act (including misleading an Investigator) that we found to be serious enough to warrant characterisation as professional misconduct; (c) a breach of the Rules by him took the form of conveying a statement to a public body (the Guardian) that he knew to be untrue; (d) the evidence as to his psychological condition does not explain the extent to which his depression might have been an operating factor in relation to the later of his two acts of misappropriation; (e) this evidence also does not fully explain the extent to which he is still subject to depression; (f) the period since his later act of misappropriation is not substantial (a little over two years); and (g) his affidavit sworn only six months ago suggests that he has not shown genuine contrition and has not fully understood the scale of his misconduct or accepted full responsibility for it.

182 In Council of the Law Society of NSW v Doherty [2010] NSWCA 177 at [65], Young JA stated that 'in the "ordinary case", where a solicitor has been found to have been guilty of misappropriation, the result is an order for striking off the roll absent exceptional circumstances'. Even allowing for the submission by Mr Birch that the Solicitor's intent to repay the misappropriated funds was a mitigating factor, the repayment in one instance occurred after many months and in the other instance may well have been prompted by the Investigation. These must, we believe, be regarded as 'ordinary cases' of misappropriation and any mitigating circumstances are clearly not 'exceptional'.

183 In the passage quoted above from Prothonotary of the Supreme Court of New South Wales v Liverani [2012] NSWCA 325, McColl JA emphasised the importance of evidence of 'repentance' by practitioners during the period between any serious misconduct committed by them and a hearing where their fitness for legal practice is being determined. For the reasons that we have given, the evidence of 'repentance' by the Solicitor is unpersuasive.

184 We recognise that the suggested restrictions on any practising certificate issued to the Solicitor and the proposal for 'mentoring' him give grounds for believing that the risk of further misconduct would be significantly reduced. But as we understand the authorities to which we have just referred, considerations such as these are insufficient to displace the principles stated in them.

185 We accordingly order that the name of the Solicitor be removed from the Roll of local lawyers.

186 Under section 566(1) of the Act, a legal practitioner who has been found guilty of professional misconduct must pay the costs of the applicant unless there are 'exceptional circumstances'. There being no such circumstances (as indeed the Solicitor admitted), we make an order to this effect against him.

 

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Decision last updated: 16 October 2012