Administrative Decisions Tribunal New South Wales

• Medium Neutral Citation: Legal Services Commissioner v Kumar [2013] NSWADT 34
• Hearing dates: 1 December 2011, 2, 3 and 4 April 2012, 31 July 2012, 1 August 2012
• Decision date: 08 February 2013
• Jurisdiction: Legal Services Division
• Before: J Currie, Judicial Member; S Hale, Judicial Member; E Hayes, Non-judicial Member

Decision

The Respondent is guilty of professional misconduct as alleged in Grounds 1, 3 and 4 of the Application.

The Tribunal orders that:

1. The matter be listed for Directions Hearing on 7 March 2013 at 9.30am.

2. The hearing of the compensation claim be adjourned to a date to be fixed.

3. The hearing and determination of further orders including costs be adjourned to a date to be fixed.

• Catchwords: Legal Profession Act 2004 - Professional Misconduct - Misappropriation of client moneys on settlement of a conveyance - Obstruction or misleading of an investigator - Alleged deliberate misleading of the Court and deliberate misleading of the Legal Services Commissioner - Compensation order
• Legislation Cited: Legal Profession Act 2004
• Cases Cited: Allinson v General Council of Medical Education and Registration [1894] 1 KB 750; Council of the Law Society of NSW v Gray [2011] NSWADT 139; Johns v Law Society of NSW [1982] 2 NSWLR 1; Law Society of NSW v McNamara [1980] 47 NSWLR 72; Law Society of NSW v Moulton [1981] 2 NSWLR 736; Legal Services Commissioner v Thurairajah [2011] NSWADT 287; Re a barrister and Solicitor (1979) 40 FLR 1; Re a Practitioner (1984) 36 SASR 590
• Texts Cited: Riley's Solicitors' Manual paras [35,045.1] and [35,065.5]
• Category: Principal judgment
• Parties: Legal Services Commissioner (Applicant); Vijay Kumar (Respondent)
• Representation: N J Beaumont (Applicant); C Waterstreet (Respondent); L Muston, Office of the Legal Services Commissioner (Applicant)
• File Number(s): 112018

reasons for decision

The case in summary

1 This case involves an assertion by the Legal Services Commissioner of New South Wales ("the Commissioner") that by reason of certain conduct the Respondent is guilty of professional misconduct, or in the alternative he is guilty of unsatisfactory professional conduct. The Respondent is a solicitor currently suspended from practice.

2 The Commissioner seeks an order that the Respondent's name be removed from the roll of practitioners, that he be publicly reprimanded or fined and that he be ordered to pay compensation of $12,000 to one of his former clients.

3 The orders are sought on 4 grounds set out in detail in the Application. They are in summary that the Respondent:

(a) obstructed or misled an investigator exercising a power under the Legal Profession Act 2004 (Ground 1);

(b) deliberately misled the Court about his whereabouts on 1 February 2011 (Ground 2);

(c) deliberately misled the Commissioner about his whereabouts on that date (Ground 3); and

(d) misappropriated $12,000 from one of his clients from the proceeds of sale of that client's property at Eagle Vale, New South Wales (Ground 4).

4 The Application did include a fifth ground, but this was not pressed by the Commissioner.

5 The Respondent's case in respect of each Ground, is in summary as follows:

(a) whilst admitting many of the facts alleged in the Application in relation to Ground 1, he denies that his actions amounted to the obstruction or misleading of an investigator contrary to section 674 of the Legal Profession Act 2004 and contends that this ground as pleaded cannot disclose any breach of the relevant legislation because the pleading wrongly accumulates a series of allegations about different facts and circumstances and is thereby bad for duplicity and unfairness;

(b) whilst admitting some of the allegations of fact in grounds 2 and 3, the Respondent says that his conduct did not amount to any misleading of the Court or of the Commissioner and in any case any misleading was not deliberate; and

(c) in relation to ground 4 admits some of the allegations of fact in the particulars. He also concedes that there had been, as his Counsel put it, a misappropriation in the "un-emotive" sense". This needs some careful explanation. As the Tribunal understands it, the Respondent's case is there was this "un-emotive" type of misappropriation by reason of money ($12,000) being misdirected to and received by a particular party (a finance company) who should not have received it in those circumstances. It is conceded that this result occurred because of a direction to pay given by or at least arranged by the Respondent on completion of a conveyance. It is also conceded that the finance company had no connection with that conveyance and was at that time a pressing creditor of the Respondent. However, the Respondent's case is that this all occurred without the intention necessary to ground a "misappropriation" for the purposes of establishing any professional misconduct or unsatisfactory professional conduct and that the $12,000 was intended to be paid to the finance company by the Respondent from other sources.

Organisation of these Reasons

6 These Reasons commence with an account of the aborted hearing on 1 December 2011 and the orders made on that date. Each of the four grounds is then addressed, in each case firstly by describing the particulars provided in the Application and the evidence adduced by the Commissioner, then by explaining what the Tribunal understands to be the Respondent's response to the allegations and any further contentions on behalf of the parties in relation to that Ground. There follows the Tribunal's analysis of the evidence and contentions, its findings on those matters for that particular Ground and a determination as to whether or not the Respondent's conduct as alleged in that Ground amounted to professional or unsatisfactory professional conduct.

7 The claim for compensation is dealt with at the conclusion of these Reasons.

8 Finally, the Reasons summarise the findings in respect of the Respondent, its orders and gives directions as to the further conduct of the matter.

9 In dealing with the Grounds, Ground 4, the allegation of misappropriation of $12,000 from a client, is dealt with first. This was the order in which the Grounds were considered, by consent of the parties, at the hearing. It is also appropriate because Ground 4 raises what are agreed to be most serious allegations of breaches by the Respondent of his professional obligations. The allegations and Particulars for Grounds 2 and 3 are similar and so are dealt with together.

The Respondent's preparation of his case and the aborted hearing on 1 December 2011

10 The Respondent's preparation of his case for hearing was beset with delays and excuses.

11 Initially, the Respondent was appearing on his own behalf and was therefore granted reasonable indulgence by the Tribunal in the filing of his pleadings and evidence. There were two Directions Hearings, on 7 September 2011 and 2 November 2011, at which directions were given as to due dates for filing of evidence and at the second of these, the matter was listed for hearing on 1 December 2011.

12 However it was quite apparent at the opening of the proceedings on 1 December 2011 that despite the directions of the Tribunal at previous directions hearings the preparation of the Respondent's case was woefully incomplete. He had not filed a complete Reply (it was unclear and omitted the Respondent's contact details, which had not been made known to the Commissioner), he had not filed the affidavit evidence upon which he had intended to rely, including an affidavit by himself, he had not in some cases even approached the witnesses whom he identified as important for his case and he had not briefed counsel. The Respondent indicated he had approached counsel but had not delivered a brief. However, when asked, he could not remember the name of the barrister he had approached or which Chambers he was from.

13 The Respondent sought an adjournment of the hearing on 1 December 2011.

14 Ms Muston, appearing on that occasion for the Commissioner, indicated that the Application had been served on the Respondent on 21 July 2011, over 4 months earlier. She contended that the Respondent was in breach of directions given by the Tribunal as well as breaches of the Rules. Ms Muston conceded that there would be no prejudice to the Commissioner by reason of an adjournment and noted that the Respondent was suspended from practice.

15 The Tribunal agreed that the Respondent was in breach of the directions and of the Rules. It indicated to the Respondent that it regarded his lack of readiness for hearing as grossly discourteous to the Tribunal. However the Tribunal was prepared to allow an adjournment of the hearing on the basis that:

(a) there appeared to be no prejudice to the Commissioner and no public risk element in granting the adjournment;

(b) the Respondent wished to be represented by Counsel, which the Tribunal viewed as advantageous in terms of effecting a fair and efficient hearing; and

(c) the Respondent was prepared to give an undertaking to the Tribunal and the Commissioner that he would comply with a strict timetable on the understanding that there could be no reliance by the Respondent on any material filed by him in contravention of that timetable. The Respondent gave that undertaking to the Tribunal and acknowledged that understanding.

16 On that basis, but with reluctance, the Tribunal allowed the adjournment and set the matter down for hearing on 2, 3 and 4 April 2012. The costs of the aborted hearing on 1 December 2011 were reserved.

17 These matters are not raised in support of any findings that the Tribunal might make on any issue other than costs.

GROUND 4: ALLEGED MISAPPROPRIATION OF $12,000

Particulars of the allegation

18 Paragraphs 4.1 to 4.6 of the Particulars in the Application disclose the basis for this Ground.

19 They allege that in around November 2010, a Mr Muhammad Malik agreed to sell his property at 4 Pyrite Place, Eagle Vale and engaged the Respondent to act on the completion of the sale; contracts for sale apparently having been exchanged prior to the engagement of the Respondent by Mr Malik. It is said that on 29 November 2010 the Respondent faxed a letter to the purchaser's solicitor containing directions as to how cheques were to be drawn on settlement. That direction included, as item 6, a direction to draw a cheque to Permanent Custodians Limited ("Permanent Custodians") in the sum of $12,000.

20 It is alleged that the purchaser's solicitor, in the usual way, instructed the purchaser's incoming mortgagee, FirstMac Limited, to draw cheques in accordance with the direction and that at settlement on 30 November 2010 the settlement cheques as set out in the direction were handed to the Respondent. It subsequently emerged, and was conceded, that the Respondent attended settlement personally accompanied by one of his employees. The $12,000 cheque to Permanent Custodians was banked on 3 December 2010.

21 It is alleged that the Respondent's client, Mr Malik, did not authorise the Respondent to direct any part of the proceeds of settlement to Permanent Custodians, that Permanent Custodians had no connection whatsoever with the sale transaction and that Mr Malik has never had any involvement with Permanent Custodians.

The Commissioner's evidence

22 The Commissioner's case in relation to Ground 4 was based on several affidavits admitted into evidence. These included:

(a) The affidavit of Steven Anthony Mark declared on 8 July 2011. Mr Mark is the Legal Services Commissioner and his lengthy affidavit provided a general account of the Commission's investigation of complaints about the Respondent and annexed correspondence and documents providing more detailed information on this.

(b) A further affidavit by Mr Mark declared on 10 November 2011, which annexes correspondence and file notes directly related to the chain of transactions whereby the cheque for $12,000 paid over on settlement was paid to the benefit of GEL Custodians Pty Limited and confirmation that that company arranged to credit the payment to the mortgage account of the Respondent.

(c) Affidavits by Cherie May Alexander, Stephen Michael Close, Murray Blanch and Deborah Lindsay, all of which provide explanation of the chain of transactions by which the $12,000 came to be paid to the credit of a home loan account of or associated with the Respondent.

(d) Two affidavits of David Pashley sworn on 16 March and 30 March 2012. Mr Pashley is the Chief Compliance Officer of the Office of the Commissioner. His affidavits annex respectively a printout from the Land and Property Information ("LPI") register as at 8 March 2012 showing the Respondent as the registered proprietor of land at Bradbury which is subject to a mortgage to Permanent Custodians and a printout from the National Personal Insolvency Index as at 30 March 2012 showing that as at that date the Respondent was an undischarged bankrupt.

(e) The affidavit of Vibha Barve sworn on 12 March 2012. The deponent is the Customer Service Officer of Pepper Australia Pty Limited. That company was at the time of settlement the manager of a loan to the Respondent. That affidavit amongst other things annexes the deponent's letter to the Commissioner dated 25 August 2011. That letter confirms that the loan to the Respondent was in arrears on 3 December 2010 in the amount of $9,569.12 and significantly that upon payment of $12,000 being credited to that loan account on 3 December 2010 the arrears were cleared. It also confirms that the loan was operated through a trust, the trustee of which at the relevant time was Permanent Custodians.

(f) The affidavit of Muhammad Nawaz Malik sworn on 9 November 2011. Mr Malik was the client for whom the respondent was acting on the sale of the property at Eagle Vale and from whom it is alleged the Respondent misappropriated the $12,000.

23 There are also two most significant and in the Tribunal's view accurate and reliable affidavits which form part of the Commissioner's case. These are the affidavit of Kasey Ann Mercieca sworn on 9 November 2011 and the affidavit of Sheree Hayden sworn on 12 November 2012. These affidavits are significant because they provide what appear to be reliable contemporaneous accounts, verified by other documentation, as to conversations with the Respondent immediately before and after the settlement about the direction in favour of Permanent Custodians. In particular the affidavits deal with questions then being raised about how the direction to pay $12,000 to Permanent Custodians came to be given at the settlement. Ms Mercieca was at the relevant time a legal secretary in the office of the solicitor for the purchaser of the Eagle Vale property and participated in the carriage of the transaction. Ms Hayden is a licensed conveyancer who was engaged on 8 December 2010 to represent Mr Malik to enquire as to the shortfall of $12,000 in the amount he had been expecting as the proceeds of settlement.

24 Ms Mercieca deposes that following an enquiry from the incoming mortgagee FirstMac Limited as to the explanation for the direction for $12,000, on 30 November 2010 she telephoned the Respondent and asked whether he knew what that $12,000 was for. The Respondent replied:

"My client authorised me to draw it."

25 Ms Mercieca alleges that she then asked the Respondent whether it was a personal loan, to which he replied:

"Something like that."

26 The Tribunal found Ms Mercieca's evidence to be credible and reliable. Her evidence was not challenged and she was not required to attend for cross-examination.

27 Ms Hayden's affidavit contains a detailed account, for the most part in direct speech, of her telephone conversations with the Respondent, particularly those on 8 December 2010 and 16 December 2010. Her account is an impressive and persuasive one, particularly because her affidavit is supported by annexed detailed file notes of her conversations with the Respondent in both handwritten and typed form. Her account of the conversations is clear, consistent and credible. Again her evidence was not challenged and she was not required to attend for cross-examination.

28 Ms Hayden says that having been engaged on 8 December 2010 she telephoned the Respondent on that day, introduced herself and asked questions about the $12,000 and why it had not been accounted to her client Mr Malik. In answer to a direct question as to what had happened to the money, the Respondent said:

"My secretary made a mistake and made a cheque out to someone else by mistake in the amount of $12,000 ... I'm trying to get the money back, the client should have it by Friday ... I have to find the money."

29 Ms Hayden goes on to give a detailed account of a telephone conversation with the Respondent on 16 December 2012. Ms Hayden says that in this conversation, the Respondent repeated his claim that the $12,000 was directed to Permanent Custodians because of an error by a secretary. The conversation is alleged to have continued as follows:

Ms Hayden:" C'mon, you and I know that mistakes like that don't happen ....All you have to do is give Mr Malik back his money."

The Respondent: "He's going to the LSC ... and this could destroy me."

Ms Hayden: "What's happened to the money, where is it? Tell me where it is, so I can calm Mr Malik down by explaining what happened to it and that you will be paying it back to him."

The Respondent: "I can't. I don't have it ... It was a mistake, she paid it to Permanent Custodians Limited."

Ms Hayden: "Well get it back if it was a mistake. Hang on, who is Permanent Custodians Limited? The client's discharging mortgagee is Suncorp"

The Respondent: "It's my personal lender, it was put in my bank by mistake."

Ms Hayden: "Are you for real? That's not a mistake. I suggest you get that money and pay it back today."

The Respondent: "That will destroy me. I don't have it... This could make me lose my license."

30 Ms Hayden deposes to a later conversation, at 4.06pm that same day in which she confirmed to the Respondent that she had told Mr Malik to go to the Legal Services Commissioner about the matter. It is alleged that the Respondent became angry with her and said that his predicament was Ms Hayden's fault. The conversation is alleged to have proceeded as follows:

Ms Hayden: "Don't you dare blame me. You took his damn money."

The Respondent: "You can't do that. It was only for a short time. I was going to give it back. I've got it coming in."

The Respondent's case and the Tribunal's analysis of the evidence

31 The Tribunal has made substantial efforts, both at the hearing and in the preparation of these Reasons, to understand the Respondent's case in answer to these most serious allegations.

32 It should be added for completeness that the Respondent filed an affidavit by Arunesh Avinash Ram, sworn on 20 February 2012, and Mr Ram gave evidence at the hearing. Mr Ram was the employee who accompanied the Respondent to the settlement of the Eagle Vale sale on 30 November 2010. Mr Ram's affidavit evidence, in respect of which there was nothing inconsistent in his oral evidence, is that the cheque directions for the settlement were physically produced by Mr Ram following a telephone conversation with the Respondent in which the Respondent gave him instructions on precisely how to prepare the direction including specifically the direction that Permanent Custodians receive $12,000. It appears from Mr Ram's evidence that the direction was signed by (in Mr Ram's words): "a young lady who worked in the office whom I believe had some knowledge of conveyancing." The unequivocal evidence of Mr Ram was that the Respondent authorised and directed the preparation of the direction including the payment of the $12,000 to Permanent Custodians. The Tribunal accepted Mr Ram's evidence as credible.

33 The obvious question is how does the Respondent explain the issuing by his firm under his authority and by his precise direction of a direction to pay $12,000 from settlement of a transaction for his client (Mr Malik) to a party (Permanent Custodians) which had no connection whatsoever with that transaction, in circumstances where the payment of that amount would to his knowledge discharge his own personal indebtedness to Permanent Custodians under a mortgage loan?

34 The Respondent's affidavit, sworn on 4 February 2011, insofar as it addresses this ground consists largely of an attack on the evidence of Mr Malik and in particular on Mr Malik's statement of 1 June 2011, that statement being an attachment to Mr Mark's first affidavit. A similar pattern emerged from the cross-examination of Mr Malik. There was a general attack on the credit and reputation of Mr Malik but nothing emerged from that, or indeed from the Respondent's counsel's address which provided any feasible or credible explanation for the misdirection of the $12,000.

35 On a generous approach to the Respondent's case, there are two allegations raised by the Respondent which might be seen as a possible route to an explanation for the misdirection of the $12,000 and which are therefore worthy of exploration.

36 The first of these is the allegation in the Respondent's affidavit, at paragraph 15, that Mr Malik knew in advance of the direction to pay. The Tribunal assumes, for the purposes of this analysis at least, that that would include an allegation that Mr Malik consented to or at the very least acceded to the direction to pay Permanent Custodians.

37 However such an assertion strains credibility, at least insofar as it is read as meaning that Mr Malik consented or acceded to the misdirection of the $12,000. Why would a client and vendor in Mr Malik's position consent to the direction of $12,000 which was rightfully his, towards payment of a personal loan obligation owed by his solicitor? There was nothing adduced by the Respondent by way of oral or written evidence or by way of the cross-examination of Mr Malik to provide an explanation for such behaviour by Mr Malik. Additionally, such an assertion is simply not borne out by the subsequent evidence and in particular the Respondent's own assertions as to Mr Malik's allegedly threatening visit to his office after settlement. Nor does it survive a comparison with the account of the Respondent's subsequent conversations with Ms Mercieca and particularly those with Ms Hayden, as outlined in paragraphs 23 to 30 above. In this regard, the Tribunal prefers the account of Ms Mercieca and Ms Hayden to that of the Respondent.

38 The second possible route to an explanation is the suggestion that the preparation of the direction to pay Permanent Custodians $12,000 was an error by the Respondent's secretary. On the basis of Ms Hayden's unchallenged evidence, this excuse was proffered by the Respondent to Ms Hayden on 8 December 2010, as recited in paragraph 20 of Ms Hayden's affidavit, where the Respondent is alleged to have said:

"My secretary made a mistake, she prepared/drew a cheque for $12,000 by mistake.";

and later:

"It was a mistake. She paid it to Permanent Custodians."

39 Such an explanation is only credible if it is accepted that the secretary, in error, completed the direction to pay in just such a manner as to result in Permanent Custodians being paid out the amount it needed in order to clear the debt owed by the Respondent. It would have indeed been a remarkable fortuitous error for the Respondent.

40 But that explanation simply does not survive comparison with other reliable and credible evidence, in particular Ms Mercieca's unchallenged account of a conversation with the Respondent on 30 November 2010, when she asked for an explanation of the payment of the $12,000 and the Respondent's reported response was:

"My client authorised me to draw it."

41 If the assertion of secretarial error is to be given any value it would need to be supported. This might be done for example by adducing evidence from the secretary herself or perhaps from some other employee of the firm who was aware of the alleged error which the secretary made. However, there was no such evidence. Not only was the secretary not called as a witness but there was no affidavit evidence from her and indeed the Respondent told the Tribunal under oath that he could not recall her name.

42 The Respondent's own oral evidence did not assist his case in relation to this Ground. The Tribunal took account of the fact that the Respondent appeared to have a halting, imprecise and at times rushed and unclear manner of expressing himself. Due allowance was made for this. Considerable latitude was granted to the Respondent to repeat or clarify some of his answers. Despite all this the Respondent emerged as a patently unpersuasive witness. In giving his evidence he was at times evasive, he often failed to accept reasonable propositions, he often rushed into an answer and then sought to retract it. The Tribunal agrees with the contentions of Counsel for the Commissioner that overall the Respondent's evidence was such that in critical aspects it could not be accepted without clear and reliable corroboration.

43 In this central aspect of the reason for the settlement direction and the payment of $12,000 to Permanent Custodians, the Respondent failed to provide that corroboration.

44 In particular the Respondent's response to Ms Hayden as to the suggestion that he had taken his client's money, cited at paragraph 30 above is damning. The response was:

"It was only for a short time. I was going to give it back."

The Tribunal accepts Ms Hayden's evidence in this regard as credible and reliable.

The Tribunal's findings on Ground 4 : Professional misconduct

45 On the basis of its findings as to the evidence and the credibility of various witnesses as discussed in the previous section, the Tribunal finds that the Respondent misappropriated $12,000 from his client Mr Malik as alleged by the Commissioner in Ground 4. In order to cover any suggestion that this finding allows for a construction that this was not misappropriation in its usual sense and that it was somehow done innocently, the Tribunal finds that this misappropriation was a deliberate and dishonest act by the Respondent.

46 It is clear from the authorities and the learned commentators on this area that deliberate or dishonest misappropriation is to be characterised as professional misconduct. Riley's Solicitors' Manual at paragraph [35,065.5] opens with the statement that fraudulent misappropriation of money received on behalf of a client "is clearly professional misconduct". There are several cases cited in Riley in support of that proposition, including Re a barrister and Solicitor (1979) 40 FLR 1 at 20-2; Law Society of NSW v Moulton [1981] 2 NSWLR 736 at 748 per Hope JA; Johns v Law Society of NSW [1982] 2 NSWLR 1 at 14-15 per Moffitt P and Re a Practitioner (1984) 36 SASR 590 at 591-2 per King CJ.

47 Additionally, it is well settled that the statutory definition of professional misconduct does not exclude the common law definition emerging from the oft-cited case of Allinson v General Council of Medical Education and Registration [1894] 1 KB 750. That is conduct:

"...would be 'reasonably regarded as disgraceful or dishonourable' by the lawyer's 'professional [colleagues] ..."

48 The Tribunal has considered the scope of that phrase on several occasions; in particular in Council of the Law Society of NSW v Gray [2011] NSWADT 139 at [24] and the authorities cited in that case.

49 In this case the Tribunal considers that the findings of fact indicate behaviour which is dishonest and which resulted in a misappropriation of a client's money. That behaviour is clearly such as to reasonably be regarded as disgraceful or dishonourable by professional (colleagues) of good repute and competency and therefore is professional misconduct.

GROUND 1: ALLEGED OBSTRUCTION OF OR MISLEADING AN INVESTIGATOR

Particulars of the allegation

50 The Particulars outline a course of conduct between 23 March 2010 and 3 March 2011 which it is alleged amounts to a breach of section 674 of the Legal Profession Act 2004. That section provides that:

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

(2) In this section.. "Obstruct" includes hinder, delay, resist, and attempt to obstruct."

51 The Applicant alleges that the conduct of the Respondent captures at least the inclusive concepts of hindering, delaying, resisting and attempting to obstruct.

52 Without reproducing all the Particulars set out in paragraphs 1.1 to 1.40 of the Application, the allegations are in summary set out in the following paragraphs, which also contain cross-references to the relevant paragraphs of the Particulars in the Application.

53 The course of conduct began with the Respondent being notified of the Commissioner's intention to conduct an audit of his practice on 23 March 2010 and concluded with the Commissioner's staff attending the Respondent's practice office at Campbelltown on 3 March 2011 to attempt to conduct an audit: a period of over 11 months.

54 On 1 April 2010 arrangements were made with the Respondent for the audit to occur on 10,11,15, 16 and 17 June 2010 and this was confirmed shortly afterwards and copies of financial statements of the practice requested. (Particulars 1.1 to 1.3). However on 7 June 2010 the Respondent sought to postpone the audit due to pressures of work. By letter of 15 June 2010 the Commissioner requested an explanation of this and information regarding the postponement. (Particulars 1.4 and 1.5). The agreed date for a response, 30 June 2010, was subject to a request for extension from the Respondent. The date for that explanation and information was extended by agreement to 15 July 2010, but on 6 July 2010 the Respondent, without having provided the information requested, indicated he would be available for the audit in mid-September 2010. (Particulars 1.6 to 1.8). On 13 August 2010 the Respondent provided a partial but incomplete response to the request for information. (Particular 1.9).

55 The Commissioner confirmed to the Respondent arrangements for attendances for the audit from 27 September to 1 October 2010 but on 7 September 2010 the Respondent requested a further postponement. (Particulars 1.11 and 1.12). In response the Commissioner indicated that his staff would attend the practice on the week commencing 11 October 2010, but on 21 September 2010 the Respondent requested a further 2 week delay and a week later, on 28 September 2010, he requested a further postponement. The Commissioner subsequently indicated that his staff would visit the practice on 8-12 November 2010. (Particulars 1.13 to 1.16).

56 What had by now become a pattern was followed on 30 September 2011 when the Respondent requested that the audit be moved once again, by one day. It was rescheduled for 9 to 12 and 15 November 2010. The Respondent did fax some (but not all) of the outstanding information to the Commissioner on 7 November 2010. (Particulars 1.17 and 1.18).

57 At around 4.30pm on 8 November 2010 the Respondent indicated to officers of the Legal Services Commission ("the Commission") that he would be unable to attend the audit commencing on 9 November 2010. The Respondent produced a medical certificate indicating that he was receiving medical treatment from 8 to 12 November and would be unfit to conduct his usual profession. (Particular 1.20)

58 On 6 December 2010 the Respondent indicated that he would not be able to attend work on 7 and 8 December 2010 as he was sick but would be back on 9 and 10 December 2010 but that he had a matter in the Family Court at Parramatta on Friday 10 December 2010. The Commissioner's response was that Commission staff would attend the Respondent's office at 9.30 am on 9 December 2010 to commence the audit. (Particulars 1.21 to 1.24).

59 The day before that appointment the Respondent provided some further documentation to the Commission in response to its enquiries but indicated that due to his medical condition he could not attend an audit and sought a postponement until the new year. (Particular 1.25). Officers of the Commission attended Parramatta Family Court on 10 December 2010. They were informed at the registry that no solicitor with the Respondent's name was appearing in any matter on that day. (Particular 1.26).

60 On 10 January 2011 the Respondent stated that he would not be back at work until 17 January due to a "family tragedy". However on that day, 17 January, the Respondent informed the Commissioner that the re-opening of his office had been postponed for yet another week and he sought a postponement of the audit until late March, early April or May 2011. (Particulars 1.27 and 1.28.).

61 At this stage the patience of those concerned at the Commission appears to have worn thin. The Commissioner informed the Respondent that his latest request for postponement was refused, that the Commissioner's officers would be in attendance at the Respondent's office on 1 and 2 February 2011 and that no further postponements would be granted. (Particular 1.29).

62 Shortly thereafter the Respondent requested a further postponement of the audit on the ground that he would be in Liverpool Local Court on 1 February 2011 in relation to a hearing for a named client. Upon the Respondent being informed by the Commission that no case with that name was listed at Liverpool on that day, the Respondent indicated that the hearing would in fact be at Bankstown Local Court. On 27 January 2011 the Commission told the Respondent that notwithstanding any hearing commitments which he might have, Commission staff would be at the Respondent's offices in Campbelltown on 1 and 2 February 2011 to commence the audit and that he could attend the matter in Bankstown Court but should leave the office accessible to the audit officers. (Particulars 1.30 to 1.32). On 31 January 2011 the Respondent indicated that he would not be in his office on either 1 or 2 February 2011 as "it is impractical". (Particular 1.33).

63 Two officers of the Commission attended the Respondent's head office on 1 February 2011 and attempted to gain entry between 9am and 9.40am. No one was there. They then drove to Bankstown Court where the named case referred to in paragraph 56 was listed for 10am. They arrived at about 10.40am. They were then informed by a Police Prosecutor that the defendant had attended Court in person unaccompanied by the Respondent and had indicated that his solicitor, the Respondent, was "sick or something" and the hearing had been adjourned until 24 February 2011. (Particulars 1.34 and 1.35).

64 There was then an important but indistinct telephone call between Mr Collins of the Commission and the Respondent at about 10.50am. The exact words used in that conversation are in dispute. Mr Collins and his assistant Ms Bedggood understood the Respondent to say that he was "in" Bankstown Court at the time. In the pleadings the Respondent does not admit this, and this evidentiary conflict is discussed in more detail at paragraph 98 below.

65 The final chapter opens on 28 February 2011 when the Commission confirmed to the Respondent that its officers would be in attendance at the Respondent's offices to conduct the audit on 3 March 2011. On 2 March 2011 the Respondent indicated that he was on sick leave until 4 March 2011. However on 3 March 2011 the Commission did attempt to commence the audit. Its officers attended the Respondent's premises between 10.05 and 10.15am to attempt to commence the audit. No one was there. (Particulars 1.37 to 1.40).

The Commissioner's evidence

66 The Commissioner relied on the first affidavit of Mr Steven Mark, referred to at paragraph 22 (a) above, and also extensive affidavits from Mr Ray Collins and Ms Bedggood as to the extended course of events leading up to the audit and two affidavits from Mr David Pashley, an officer of the Commission as to statements made at various stages by the Respondent. None of the Commissioner's deponents to affidavits relevant to this Ground were required to attend for cross-examination.

The Respondent's case

67 Significantly the Respondent by his Reply admits nearly all the paragraphs of the Particulars relating to Ground 1. The exceptions to this are:

(a) Paragraph 26, which the Respondent says he can neither admit nor deny. This paragraph alleges that when the Commission's officers attended Bankstown Court on 10 December 2010 a registry clerk advised there was no solicitor of the Respondent's name appearing on that day;

(b) Paragraph 1.36, which intriguingly, is" not admitted". In that paragraph the Commissioner alleges that in a telephone conversation with Mr Collins at about 10.50am on 1 February 2011 the Respondent stated that he was "in" Bankstown Court. It is significant that this allegation is not denied. That would have clarified the Respondent's position as to exactly what he said in the important phone conversation with Mr Collins and Ms Bedggood of the Commission, as related in detail at paragraph 58 above. This is also of relevance to Ground 3 and is discussed at paragraph 98 below.

(c) Paragraph 1.37 which is also not admitted. That paragraph alleges that on 2 February 2011the Registry at Bankstown Court advised that the Respondent had not appeared in Court on 1 February 2011 and that the defendant in person had informed the Court that the Respondent was unable to attend as he was in hospital.

(d) Paragraphs 1.39 and 1.40, which, unhelpfully, are not even addressed in the Reply. These are the allegations that on 2 March 2011 the Respondent stated that he was on sick leave until Friday 4 March 2011(paragraph 1.39), and that on 3 March the Commission attended the Campbelltown office of the Respondent to attempt to carry out an audit but no one was present(Paragraph 1.40).

68 As the Tribunal understands it the Respondent's case in response to Ground 1 is based on three contentions as to why the behaviour set out in the Particulars ( or at least so much of it as is admitted) does not amount to a breach of section 674 of the Legal Profession Act 2004.

69 The first of these is a contention that the Respondent had a reasonable excuse for acting as he did; that is, that the Respondent acted properly or at least reasonably in seeking a delay of the audit on the various grounds which he proffered in the eleven month period recounted above at paragraphs 47 to 58. It is most strongly suggested on behalf of the Respondent that it was reasonable for the Respondent to seek a delay on the grounds that he was unwell.

70 The second contention is that each incident particularised in the Application which resulted in a postponement of the Commission's requirement should be examined separately, that is, severally, and that it follows that each time the Commission agreed to a postponement of the commencement of the audit (albeit with what appears to have been increasing reluctance), that should be treated as something in the nature of a release or forgiveness of any delays up to that point, or at the very least should be an indication that any delay or hindrance of the investigator up to that point should not be able to ground a charge of breach of section 674.

71 The third contention is that this ground as pleaded cannot disclose any breach of the relevant legislation because the pleading wrongly accumulates a series of allegations about different facts and circumstances and is thereby bad for duplication and unfairness.

The Tribunal's analysis of the contentions and the evidence

72 "Reasonable excuse". Dealing firstly with the "reasonable excuse" contention, the Tribunal acknowledges that the Respondent may have had some medical problems at particular stages during the 11 month period between the initial correspondence and the attempted audit. However the medical evidence tendered by the Respondent was very general and not specific as to diagnosis or prognosis, in particular as to the extent to which his incapacity would prevent the Respondent from carrying on his professional business. In any case the Respondent's medical problems appear to have been debilitating, if at all, towards the end of the period only.

73 There was very little explanation given as to the family tragedy alleged by the Respondent. Such an event deserves a sympathetic response and there is no reason for the Tribunal to think that that was not forthcoming. However, again, a reasonable allowance for delay from that cause only accounts for a short portion of the eleven month period.

74 The Tribunal cannot ascertain any reasonable excuse for many of the incidents under consideration during the 11 month period up to commencement of the audit whereby the best efforts of the investigation team from the Commission to conduct an audit of the Respondent's practice were thwarted. By way of non-exhaustive example, the Tribunal is unable to ascertain from the Respondent's case as presented or from any other source, any reasonable excuse for the following conduct:

(a) the length of the Respondent's requested postponement on 7 June 2010 until September 2010 due to pressure of work (Particular 1.4);

(b) the Respondent's delay in responding to the request from the Commission for an explanation of the request referred to in (a) above (Particulars 1.5, 1.6, 1.7 and 1.8);

(c) the Respondent's delay in responding to requests for further information (Particulars 1.6, 1.7, 1.9, 1.10, 1.18);

(d) the "last minute" nature of many of the Respondent's requests for an extension of time or other postponement , even after making a generous allowance for events for which longer notice could not reasonably be given, such as illness or family tragedy. (Particulars 1.4, 1.7,1.12, 1.15, 1.25, 1.28, 1.30 and 1.33);

(e) the circumstances and the Respondent's conduct as described in paragraphs 57 and 58 and 59 second sentence to 60 above (Particulars 1.21 to 1.33) covering the period 6 December 2010 to early February 2011; or

(f) the Respondent's obfuscation and attempts to delay or hinder the process in his telephone conversations with the Commission's officers on the day of the Bankstown Court attendances, 1 February 2011. (Particular 1.36). In this regard the Tribunal accepts the evidence of the Commission's officers Mr Ray Collins and Ms Esther Bedggood, who participated in the relevant conversations on speaker phone. Mr Collins' affidavit as a whole, and Ms Bedggood's file note, which is annexed at page 4 of Mr Collins' affidavit, are accepted as truthful and reliable accounts of what happened and what was said. Ms Bedggood's file note reports that during the conversation, whenever Mr Collins asked the Respondent which Court he was in or what he was doing at the time, the Respondent would say he could not hear or would attempt to cut the conversation short or would obfuscate by praising Mr Collins' reputation as a solicitor.

For these reasons the Tribunal is satisfied that the Respondent did not have a reasonable excuse for most of the incidents of conduct referred to in the Particulars for Ground 1.

75 "Release of each 'obstruction' by the granting of a further extension". The Respondent's contention was as set out in paragraph 69 above and requires firstly an examination of each event or incident of alleged "obstruction" (in the broad sense of that term contemplated by section 674) and secondly a construction that whenever the Commission allowed an extended time for an event (most regularly, the commencement of the audit), that must be seen as a release or forgiveness by the Commissioner of any obstruction which had accrued up to that time.

76 The Tribunal is not persuaded by this contention. In the first place, the Tribunal is not persuaded that this is a valid way of assessing whether "obstruction", especially in the sense of delay, hindrance or attempts to obstruct, should be viewed. The very nature of the concepts of delay, resistance and hindrance is that they are temporal concepts. They occur or exist over time. They are, of their very nature, enlarged or increased by repetition. That very strongly suggests that in assessing "at the end of the day" (that is, at the conclusion of a particular period or passage of events) whether there has been delay, resistance or hindrance, it must be necessary to be able to have regard to any delaying resisting or hindering "along the way".

77 Additionally, there are some items of the Respondent's conduct in the relevant 11 month period for which such an analysis is not appropriate. These are instances of conduct which is capable of extension, release or forgiveness by their very nature. For example, the Respondent's obfuscation and avoidance in the 1 February telephone conversation with Mr Collins and Ms Bedggood on 1 February 2011 and the "last-minute" nature of some of the Respondent's pleas for extension of time (even after making allowances for more genuine "last minute" excuses such as the family tragedy).

78 For these reasons the Tribunal rejects the Respondent's contentions.

79 Accumulation of charges, duplication and unfairness. The Respondent's third contention is as set out in paragraph 70. The Tribunal takes the view that paragraphs 1.1 to 1.40 of the Particulars in the Application do not set out a number of individual charges. It seems to us clear that the paragraphs were intended to constitute a narrative account of conduct by the Respondent which viewed as a whole indicates the extent to which the Commission's investigator was hindered and delayed by the Respondent in attempting to conduct an audit of his practice and the extent to which the Respondent might be seen as resisting or attempting to obstruct the investigator from achieving that task.

80 Once again the temporal nature of the alleged offence is important in assessing the validity of such a pleading technique. Hindering, delaying, resisting and attempting to obstruct is conduct which can conceivably occur by reason of one act or omission but is more likely to occur as a continuing course of conduct, particularly in the context of an investigation involving audit of a legal practice. The Tribunal sees no obligation on the pleader in the latter situation to identify each particular act or omission as either constituting or not constituting the breach. That is the situation we have here. In the Tribunal's view, therefore, the relevant paragraphs are properly pleaded and the Respondent's contentions to the contrary are rejected.

81 The facts pleaded at paragraphs 1.1 to 1.40 of the Particulars are largely admitted by the Respondent, the exceptions to that having been noted at paragraph 61 above.

82 The Tribunal is satisfied on the evidence and particularly the unequivocal and corroborated evidence of Mr Collins and the admissions made by the Respondent that between about 23 March 2010 and 3 March 2011 the Respondent engaged in a course of conduct which hindered and delayed an investigator in the course of his seeking to conduct an audit of the Respondent's practice and that he did this without reasonable excuse.

Professional Misconduct or Unsatisfactory Professional Conduct

83 As noted in relation to Ground 4 at paragraph 47 above, it is well settled that the statutory definition of professional misconduct does not exclude the common law definition emerging from the oft-cited case of Allinson v General Council of Medical Education and Registration [1894] 1 KB 750). That is conduct : "..which would reasonably be regarded as disgraceful or dishonourable by professional [colleagues]."

84 The Tribunal has given consideration to the existence of professional misconduct in a recent case in which obstruction was alleged. That is Legal Services Commissioner v Thurairajah [2011] NSWADT 287 at [165]-[170].

85 The role of investigators is an extremely important one and one which is widely recognised within the profession. The Law Society has on numerous occasions, mainly through its Law Society Journal and by other public means reminded its members of the importance of the investigator's role. The success which investigators have had in significant cases of misconduct by solicitors is well-known in the profession and many solicitors follow those cases closely, notwithstanding the unfortunate demise of the so called "Blue Book" of regular reports of such cases. In the Tribunal's view, solicitors of good repute and competence would find the Respondent's conduct, constituting as it does a concerted and extended course of hindrance and delay of an investigator as disgraceful dishonourable and that would be a reasonable view of the established facts of this case.

86 It must follow that the Respondent is guilty of professional misconduct in relation to Ground 1.

GROUND 2: ALLEGED DELIBERATE MISLEADING OF THE COURT ABOUT THE RESPONDENT'S WHEREABOUTS ON 1 FEBRUARY 2011 AND GROUND 3: ALLEGED DELIBERATE MISLEADING OF THE COMMISSIONER ABOUT THE RESPONDENT'S WHEREABOUTS ON 1 FEBRUARY 2011

Particulars of the allegations and the evidence

87 The Commissioner's allegations relating to these Grounds are as set out in Particulars 1.30 to 1.37. The allegations in both Grounds surround the events which occurred mainly on 1 February 2011. That was the date set for commencement of the audit. The Respondent had told the Commissioner on 27 January 2011 that he was unable to attend the audit on 1 February as he was in court in relation to a matter involving his client Mr Hejaaz Karem. It is alleged at Particular 1.20 that on 27 January 2011 the Respondent had said that he was representing Mr Karem in Liverpool Court, but he subsequently corrected that and said that the appearance was at Bankstown Court. The response of the Commission's officers was to inform the Respondent that that they would be at his Campbelltown office on 1 and 2 February and they confirmed that he should attend to his court matter but would need to leave the offices accessible to enable the audit to commence. It appears that later, on 31 January 2011, the Respondent informed the officers that "it would be impractical" to commence the audit on that date.

88 On 1 February 2011 Mr Collins and Ms Bedggood of the Commission attempted to gain entry to the Respondent's office between 9.00 and 9.40am. They were apparently unsuccessful as no-one was present. They then attended Bankstown Court. They noticed that Mr Karem's matter was listed at 10am. They approached the Police Prosecutor who told them that the defendant, Mr Karem had appeared in person without the Respondent and had told the Magistrate that the Respondent was "sick or something" and the matter had been adjourned to 24 February 2011. The Particulars as pleaded up to this point are all admitted by the Respondent.

89 The Commissioner alleges that there was a telephone conversation between the officers of the Commission and the Respondent at approximately 10.50am. That conversation is critical and we shall return to it in more detail. It is then alleged that the Court Registry advised the Commission's officers on 2 February 2011 that the defendant Mr Karem had advised the Court that the Respondent was unable to attend because he was in hospital. These allegations are not admitted by the Respondent. However there was attached to Mr Steven Mark's first affidavit a copy of the Court's cover sheet for the hearing of the Karem matter on 1 February 2011, which reads in part:

"P and D seek adj - granted. Lawyer in hospital. P didn't know in for hrg."

The cover sheet is signed by a "J. Trad" who could be the Magistrate or the clerk to the magistrate. "P and D" is fairly clearly a reference a reference to the Prosecutor and Defendant.

90 The most significant allegations in this Ground relate to the telephone conversation between the Commission's officers and the Respondent at about 10.50am on that day. Particular 1.36 alleges that in that conversation:

"the (Respondent) stated he was in Bankstown Court."

91 That statement is most significant in two respects. The first of these is its timing. In Ms Bedggood's file note dated 1 February 2011 she records that she and Mr Collins arrived at Bankstown Court at around 10.40am and then spoke to the Police Prosecutor as described above in paragraph 87 and then, at about 10.50am made this call to the Respondent. The call was on the speakerphone in the Commission's car so Ms Bedggood heard it. Ms Bedggood records that Mr Collins asked whether the Respondent was available for the officers to attend his office and conduct the audit. The Respondent said that he was very busy and he would not be finished until late. Ms Bedggood's file note continues, in relevant respects, as follows:

"(Mr Collins) then told (the Respondent) that the audit could not be put off and that he wanted to do it today. (Mr Collins) asked (the Respondent) what time he would be finished in court. (The Respondent) stated that it would be very late, around 4 or 5pm."

92 A little later it is recorded that:

"(Mr Collins) then asked (the Respondent) which court he was in and asked whether he was at Liverpool Court. (Mr Collins) had to ask the question several times. (The Respondent) then said that he was not at Liverpool Court, "I am in Bankstown Court".

The Respondent's case

93 It is convenient to deal with the Respondent's evidence as to his conduct in respect of these two Grounds together, as they relate to a similar period and identical conversations for the most part. There are two separate but connected aspects: what the Court was told about the Respondent's whereabouts and the timing and content of the telephone call between the Respondent and Mr Collins.

What the Court was told about the Respondent's whereabouts

94 Mr Hejaaz Karem, who was the client in the Bankstown Court proceedings, deposed in his affidavit sworn on 18 February 2012 that the Respondent called him in the afternoon of 31 January and said:

"I am not feeling well; I have back pain. Could you please seek adjournment of your matter if you want me to continue with the matter".

95 Mr Karem's affidavit goes on to state that the Respondent then said words to the effect:

"... I may be going to see the doctor tomorrow. I would advise you tomorrow as to whether or not I can attend Court."

96 Mr Karem says that telephone reception for that call was not very clear. He says he may have misunderstood the Respondent. Importantly he says:

"I had believed that he was going to the hospital the next day."

97 As indicated at paragraph 88 above the Court record clearly shows that the Magistrate was informed that the Respondent was in hospital when the matter was mentioned at about 10am.

98 Under cross-examination, the Respondent denied that he had told Mr Karem at any time that he would be in hospital or that he was going to hospital.

The timing and content of the telephone call between the Respondent and Mr Collins

99 The Respondent claimed under cross-examination that when in response to Mr Collins' question in that phone discussion at 10.50am he said "I am in Bankstown Court" he meant the answer as a clarification for Mr Collins as to which Court the Karem matter was listed in. That at least is the Tribunal's best interpretation of the Respondent's lengthy and somewhat unclear answers in cross-examination on this subject, as recorded in the Transcript for 31 July 2012, p96 at line 35 and the following lines. The Respondent went on to claim in cross-examination that he drove to Bankstown Court and took the phone call from Mr Collins as he was parking his car "in the vicinity in Bankstown Court". It is evident to the Tribunal that Mr Kumar often interposes the words "in" and "at" in his speech.

100 In his affidavit, sworn on 4 February 2011 (that is only three days after the events in question) the Respondent says as follows:

"28. ...I received the call from Mr Collins on February 1, 2011 and say that I did say to Mr Collins that the matter is in Bankstown Court. I have not provided any wrong information to Mr Collins at all. The time that he called the reception was not good and I could not hear him well and the mobile battery was about to die.

29. ...Despite being sick I still went to Bankstown Court and upon arrival I did call the client and was advised that the matter has been dealt with and has been adjourned ... I have not deliberately misled the Commissioner about my whereabouts."

The Tribunal's analysis : Ground 2 (Mislead the Court)

101 The Tribunal has concluded that there is insufficient evidence for it to be reasonably satisfied on the balance of the probabilities that the Court was misled by the Respondent as to his whereabouts.

102 There seems little doubt that the Court was indeed misled about the Respondent's whereabouts, to the extent that it believed and recorded that the Respondent was in hospital. However, we do not think that the source of this misinformation can conclusively be traced back to the Respondent. Mr Karem himself is not prepared to say that the Respondent told him that, or told him to say that, only that:

"I had believed that he was going to the hospital the next day."

103 Mr Karem says the phone line connection was poor when he was speaking to the Respondent. The Tribunal regards it as significant that in Ms Bedggood's reliable and credible file note, the Police Prosecutor who appeared at the mention at 10am, is reported to have told Mr Collins a short time later that the solicitor (that is, the Respondent) "was sick or something". (Emphasis added). The Respondent, under cross-examination was adamant in denying that he had told Mr Karem at any time that he would be in hospital or was going to hospital.

104 On the basis of that evidence the Tribunal cannot be reasonably satisfied that this Ground is made out.

The Tribunal's analysis : Ground 3 (Mislead the Commissioner)

105 Having reviewed the evidence in detail, the Tribunal has reached the conclusion that on the balance of probabilities it is satisfied that the Respondent did mislead the Commissioner as to his whereabouts on 1 February 2011.

106 The timing of the relevant events is important here, as is the fact that there is no evidence (and it has never been suggested by the Respondent) that he had any court commitments on 1 February 2011 other than Mr Karem's matter at Bankstown Court at 10.00am. The Court cover sheet indicates that Mr Karem's matter was a traffic prosecution for failure to give way to a vehicle. The Tribunal would find it very hard to accept that even a meticulous and painstaking defence of such a charge would occupy a full day of hearing.

107 Critically, Ms Bedggood's file note of 1 February 2011, which the Tribunal accepts as accurate and reliable, indicates that in the telephone conversation at approximately 10.50am Mr Collins asked the Respondent what time he would be finished in Court. It will be recalled that at this stage there had been delays in arranging the audit for well over 7 months and Mr Collins had indicated to the Respondent that the audit could not further be postponed and would have to commence that day. The Respondent replied to Mr Collins' question by saying he would be finished in Court "very late, around 4 or 5pm".

108 There is some doubt as to whether this conversation occurred before or after the Respondent's conversation with Mr Karem in which the Respondent was informed of the adjournment. If the conversation with Mr Collins was after the conversation with Mr Karem, then patently, the Respondent has misled Mr Collins as to the time during which he would be committed in Court. However, even if the conversations occurred in the opposite order, the Respondent must have known that there was a reasonable chance that the Karem matter would be adjourned and even if it were not and he were prepared to appear in it (which seems unlikely given his claims of illness) a case of that nature could not have occupied him until 4 or 5pm. On either construction of the facts the Respondent has misled the Commissioner.

109 As noted in paragraph 105 above, there is no evidence, (and it has never been suggested by the Respondent) that he had any court commitments other than the Karem matter that day. All the evidence indicates that the contrary is true. Indeed the Respondent himself in his affidavit of 4 February 2011 refers (in paragraph 26) to waking up "hoping to go to court to represent the client who I had not seen before nor taken instructions...". This is patently a reference to Mr Karem. In paragraph 27, he says that:

"... despite being sick on the day I still attempted to go to the court but the matter was dealt with and the hearing was adjourned till February 24, 2011" (Emphasis added).

The clear conclusion to be drawn is that the only matter which was a court commitment for the Respondent on 1 February 2011 was the Karem matter.

110 Further support for the Karem matter being the Respondent's only Court commitment on 1 February 2011 comes from the following passage of the cross-examination of the Respondent, in the transcript for 31 July 2011 at page 96 lines 36-45:

Q. You didn't go to Court though sir?

A. I did. I did. 1 February, are you talking 1 February?

Q. Yes on 1 February?

A. I went to - even though I was sick I still went to, I still went to the matter(?) because I rang the client and he said the matter has already been dealt with

Q. That being so there was no reason for you to go to Court was there?

A. No, no, but I never knew that the matter is adjourned"

111 The Tribunal accepts Ms Bedggood's evidence that the Respondent told the Commissioner's officers that he would be in Court until "very late, 4 or 5pm". It is clear from the evidence that he was not committed to Court for such a period that day and that he could conceivably have made arrangements to allow the officers to commence their audit. It follows that the Respondent misled Mr Collins and Ms Bedggood as to his whereabouts on 1 February 2011. The Tribunal is satisfied that he did this deliberately, in order once again to avoid the commencement of the audit of his practice.

Professional Misconduct

112 As is confirmed in Riley's Solicitors' Manual at paragraph [35,045.1] the case law emphasises the importance of a practitioner being entirely frank in communications with the Legal Services Commissioner, so that to mislead the Commissioner may be professional misconduct. See the Veghelyi case and other authorities cited on page 92,390. The case of Law Society of NSW v McNamara [1980] 47 NSWLR 72 at 78 is authority for the proposition that a deliberate misleading of the Commissioner is professional misconduct.

113 The Tribunal is satisfied that the conduct of the Respondent in this regard

falls within the ambit of the cases cited above and on the Allinson test is conduct which would reasonably be regarded as dishonourable and disgraceful by practitioners of good repute and competency. Accordingly the Respondent is guilty of professional misconduct.

The Tribunal's findings as to the substantive grounds

114 The Tribunal finds the Respondent guilty of professional misconduct as alleged in Grounds 1, 3 and 4. Ground 2 has not been made out.

The claim for a compensation order

115 The Application seeks an Order that the Respondent pay compensation of $12,000 to Mr Muhammad Malik, being the amount which he misappropriated from Mr Malik on the completion of the Eagle Vale sale. The Respondent adduced evidence to the effect that certain amounts had been repaid, some of them through an account in the name of Mr Malik's wife. Although the Respondent claimed that the full $12,000 had been repaid, his evidence established only that some $9,000 had been repaid.

116 In light of the Orders and Directions below and the uncertainty as to the exact amount which has been repaid to Mr Malik already, the Tribunal does not propose to make an order for compensation at this stage, but to adjourn that application, with the intention that prior to any subsequent hearing regarding the issue of penalty, the Respondent be given the opportunity to adduce such further evidence on this issue with a view to a final order on the compensation claim to be made at that further hearing.

Costs

117 The Tribunal has yet to hear submissions in relation to any costs order. The costs of the matter will be substantial. It therefore seems appropriate that any decision on this issue should be reserved and for the parties to make any submissions on costs at the further hearing proposed in the next paragraph.

The appropriate course in determining penalty, the compensation claim and further orders

118 It is appropriate that a hearing as to the issue of penalty, any further orders including costs and the compensation claim be undertaken at a separate hearing. It is therefore appropriate to order that the matter be stood over for a further directions hearing within 28 days. The Tribunal orders accordingly.

Orders

The Tribunal orders that:

1. The matter be listed for Directions Hearing on 7 March 2013 at 9.30am.

2. The hearing of the compensation claim be adjourned to a date to be fixed.

3. The hearing and determination of further orders including costs be adjourned to a date to be fixed.

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Decision last updated: 08 February 2013