Supreme Court New South Wales

• Medium Neutral Citation: The Law Society of New South Wales v Samaan [2013] NSWSC 1144
• Hearing dates: 16 August 2013
• Decision date: 16 August 2013
• Before: Adamson J

Decision

(1) An order pursuant to s 630(2) of the Legal Profession Act 2004 appointing John Ernest Mitchell receiver for the law practice known as Samaan & Associates Lawyers (the Law Practice) situated at Suite 3, Level 6, 402-410 Chapel Road Bankstown NSW 2200.

(2) An order that the receiver, within one month of appointment and from time to time afterwards, furnish to the plaintiff as it requires, reports of the receivership and that no further or other reports need be furnished by the receiver.

(3) Subject to the plaintiff giving an undertaking as to damages, an order that all transactions involving the receipt or disposal of trust moneys of clients of the Law Practice be effected and transacted through the law practice bank accounts of which John Ernest Mitchell has been appointed receiver.

(4) An order that the defendant and his servants or agents are restrained from:

(a) removing, or causing or permitting to be removed from the State of New South Wales; and

(b) selling, charging, mortgaging or otherwise dealing with or disposing of; and

(c) causing or permitting to be sold, charged, mortgaged or otherwise dealt with or disposed of,

any of his assets within the State of New South Wales provided that this order shall not prevent the defendant from paying his ordinary living expenses up to the sum of $1000.00 per week.

(5) An order that the defendant within 14 days of being served with a copy of this order, deliver or cause to be delivered to the plaintiff an affidavit sworn or affirmed by him setting out:

(a) The name and address of every bank, building society or other financial institution at which there is an account in any name that the defendant is entitled to operate in any capacity, (the Account), together with all the particulars of the Account known to the defendant, including the name, number and balance of the Account at the date of service of a copy of this order upon him;

(b) The name and address of any person or entity indebted to the Law Practice and/or the defendant at the date of service of a copy of this order upon it and/or him and the amount of the debt owed by that person or entity;

(c) An itemised inventory of all business assets owned by the Law Practice and/or the defendant;

(d) An itemised inventory of any other property, whether real or personal, owned by the Law Practice and/or the defendant or in respect of which the Law Practice and/or the defendant has an interest; and

(e) In respect of any of the property referred to above, whether it has been given as security for any debt, and if so, the nature of the security and the debt secured.

(6) An order that the defendant pay to the plaintiff a sum equal to the legal costs and expenses that may be incurred by the receiver in relation to the receivership.

(7) An order that the defendant pay to the plaintiff a sum equal to any fees paid by it to the receiver by way of remuneration.

(8) An order that the defendant pay the costs of this summons.

• Catchwords: LEGAL PRACTITIONERS- application to appoint receiver to legal practice
• Legislation Cited: - Legal Profession Act 2004, s 630(2)
• Category: Interlocutory applications
• Parties: The Law Society of New South Wales (Plaintiff); Rabie Samaan (Defendant)
• Representation: Counsel: CM Groenewegen (solicitor)(Plaintiff); No appearance for the Defendant; Solicitors: The Law Society of New South Wales (Plaintiff)
• File Number(s): 2013/247309
• Publication restriction: Nil

Judgment

Introduction

1 By summons filed on 14 August 2013 the Law Society of New South Wales seeks orders against Rabie Samaan including an order pursuant to s 630(2) of the Legal Profession Act 2004 (the Act) to appoint John Ernest Mitchell as a receiver for the law practice known as Samaan & Associates Lawyers situated in Bankstown.

2 Ms Groenewegen, who appears on behalf of the plaintiff, has filed in support of the summons two affidavits; an affidavit of Ann Marie Ford of 13 August 2013, which was filed with the summons on 14 August 2013, and an affidavit of Cora Groenewegen of 16 August 2013 which was filed in Court today.

Defendant's knowledge of the plaintiff's application for a receiver

3 In the latter affidavit the deponent deposed to the attempts that she has made to notify the defendant of these proceedings. I note that the defendant was notified by email on Wednesday 7 August 2013 and the deponent telephoned the defendant on 14 August 2013. Later in that day she emailed the defendant attaching a PDF copy of the sealed summons. Later on that same day she sent a letter to the defendant by express post informing him of the proceedings and the intention of the plaintiff to appear before the duty judge on Friday 16 August 2013 to have a receiver appointed to the practice.

4 On Thursday 15 August 2013 the defendant telephoned Ms Groenewegen and said he had received the emails and the PDF of the summons and that he understood the affidavit was too big to send. Ms Groenewegen explained that she had sent it by express post the previous day and that it should arrive that day, being 15 August 2013. She asked the defendant to contact her once he received the affidavit to indicate to her what he proposed to do tomorrow, namely Friday 16 August 2013. Notwithstanding this discussion Ms Groenewegen received no response either by telephone or email from the defendant. This morning at 8.15am she telephoned him and left a message and sent an email to him at 8.55am asking him whether or not he would be attending court today for the hearing of the matter. No response was received to that email or to that phone call.

5 I asked the court officer to call the defendant's name outside court before the matter was heard at 10.30am in this Court today and there was no response.

6 In all the circumstances I am satisfied that the defendant has been notified of the hearing today and has chosen not to appear. I note, however, that in any event I could make the order even had the summons not been served.

The application for the appointment of a receiver and associated orders

7 I turn now to the affidavit of Ann Marie Ford of 13 August 2013, in which she deposed to the background to the application and the grounds on which the application is made. It came to the attention of the Council of the Law Society (the Council) that there were irregularities in the practice conducted by the defendant in that he had misappropriated moneys which were paid to him on trust and also that he had failed to renew his practising certificate and has therefore ceased to be an Australian legal practitioner. At its meeting on 5 August 2013, the Council resolved that a manager be appointed to the defendant's practice and that an application be made to this Court for the appointment of a receiver.

8 The material in support of the submission that the defendant has misappropriated trust funds is very strong, in that there is an admission, signed by the defendant on 30 July 2013 confirming that he has misappropriated a sum of $25,196 which was paid to him in cash by a client, Ms Gordana Sirijovska, to pay various accounts relating to the transcript costs, barrister fees and expert fees. Rather than applying the funds for the purposes for which it was paid, the defendant admitted that he misappropriated them for his own purposes.

9 In these circumstances, and in light of the admission made by the defendant, I consider it to be appropriate to make an order appointing Mr Mitchell to be a receiver for the law practice pursuant to s 630(2) of the Act.

10 The minute of order which has been provided to me by Ms Groenewegen contains other orders, including that the receiver within one month of appointment furnishes the plaintiff reports of the receivership, and also an order that all transactions involving the receipt or disposal of trust moneys of clients of the defendant's law practice be effected and transacted through the law practice's bank account of which Mr Mitchell has been appointed as receiver.

11 The plaintiff also seeks an order restraining the defendant from dealing with his assets or removing them from New South Wales subject to his entitlement to pay his ordinary living expenses up to the sum of $1000 per week.

12 In all of the circumstances of this case, and on the basis that the plaintiff has given an undertaking as to damages, I am persuaded that it is appropriate to grant this restraining order.

13 There are other orders in the minute of order which are also consequential and require the defendant to inform the plaintiff of various matters, including the name and address of every bank, building society or other financial institution at which there is an account in any name that the defendant is entitled to operate. The purpose of these orders is to facilitate the tracing of the misappropriated trust funds into the defendant's property.

14 I am satisfied in all the circumstances that, having regard to the evidence referred to above and the plaintiff's undertaking as to damages, it is appropriate to make each of the orders set out in the short minute of order handed up by the Law Society.

Orders

15 I make the following orders:

(1) An order pursuant to s 630(2) of the Legal Profession Act 2004 appointing John Ernest Mitchell receiver for the law practice known as Samaan & Associates Lawyers (the Law Practice) situated at Suite 3, Level 6, 402-410 Chapel Road Bankstown NSW 2200.

(2) An order that the receiver, within one month of appointment and from time to time afterwards, furnish to the plaintiff as it requires, reports of the receivership and that no further or other reports need be furnished by the receiver.

(3) Subject to the plaintiff giving an undertaking as to damages, an order that all transactions involving the receipt or disposal of trust moneys of clients of the Law Practice be effected and transacted through the law practice bank accounts of which John Ernest Mitchell has been appointed receiver.

(4) An order that the defendant and his servants or agents are restrained from:

(a) removing, or causing or permitting to be removed from the State of New South Wales; and

(b) selling, charging, mortgaging or otherwise dealing with or disposing of; and

(c) causing or permitting to be sold, charged, mortgaged or otherwise dealt with or disposed of,

any of his assets within the State of New South Wales provided that this order shall not prevent the defendant from paying his ordinary living expenses up to the sum of $1000.00 per week.

(5) An order that the defendant within 14 days of being served with a copy of this order, deliver or cause to be delivered to the plaintiff an affidavit sworn or affirmed by him setting out:

(a) The name and address of every bank, building society or other financial institution at which there is an account in any name that the defendant is entitled to operate in any capacity, (the Account), together with all the particulars of the Account known to the defendant, including the name, number and balance of the Account at the date of service of a copy of this order upon him;

(b) The name and address of any person or entity indebted to the Law Practice and/or the defendant at the date of service of a copy of this order upon it and/or him and the amount of the debt owed by that person or entity;

(c) An itemised inventory of all business assets owned by the Law Practice and/or the defendant;

(d) An itemised inventory of any other property, whether real or personal, owned by the Law Practice and/or the defendant or in respect of which the Law Practice and/or the defendant has an interest; and

(e) In respect of any of the property referred to above, whether it has been given as security for any debt, and if so, the nature of the security and the debt secured.

(6) An order that the defendant pay to the plaintiff a sum equal to the legal costs and expenses that may be incurred by the receiver in relation to the receivership.

(7) An order that the defendant pay to the plaintiff a sum equal to any fees paid by it to the receiver by way of remuneration.

(8) An order that the defendant pay the costs of this summons.

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Decision last updated: 20 August 2013