Civil and Administrative Tribunal New South Wales

• Medium Neutral Citation: The Council of the Law Society of NSW V Andreone (No2) [2014] NSWCATOD 81
• Hearing dates: Second stage on papers
• Decision date: 24 July 2014
• Jurisdiction: Occupational Division
• Before: Hon G Mullane , Senior Member; D Fairlie , Senior Member; C Bennett , General Member

Decision

1) The name Francesco Leonardo Andreone is to be removed from the Local Roll of Lawyers.

2)The Respondent must pay the costs of the Applicant of and incidental to this Application as agreed or as assessed.

• Catchwords: Solicitor - Professional misconduct - misappropriation of trust money and other breaches of legislation - solicitor struck off
• Legislation Cited: Legal Profession Act 2004; Civil and Administrative Tribunal Act 2013
• Cases Cited: Dupal v The Law Society of NSW, NSWCA (unrep) 26/4/90; Law Society of NSW v Andreone [1999] NSWADT 14
• Category: Principal judgment
• Parties: The Council of the Law Society of NSW (Applicant); F L Andreone (Respondent)
• Representation: C Groenewegen (Applicant); M Teys, TEYS Lawyers Pty Ltd (Respondent)
• File Number(s): 132009

reasons for decision

INTRODUCTION

1 On 7 May 2014 the Tribunal made the following Orders:

(1) The Respondent is guilty of professional misconduct.

(2) The Applicant must file and serve within 14 days of receipt of these reasons any further submissions or evidence it seeks to rely upon as to what orders the Tribunal should make.

(3) Within 28 days of receipt of these reasons the Respondent must file and serve any further submissions or evidence he seeks to rely upon as to what orders the Tribunal should make.

2 The Applicant filed its written submissions on 22 May 2014 and presumably they were served on that day on the Respondent.

3 On 22 May 2014 the solicitors for the Respondent notified the Tribunal that they had ceased to act for him. Some days prior to 21 June, an officer of the Tribunal telephoned the Respondent and reminded him that nothing had been filed by him under Order 3. The Respondent informed the office that he would file the material by 21 June 2014.

4 The Respondent has not filed any submission or evidence in response to that order.

5 Our Reasons of 7 May 2014 with the heading: "Reasons for Refusal of Adjournment", made findings about the Respondent's repeated failure to comply with directions for the filing of materials for the hearing.

6 Accordingly, the Tribunal has proceeded to make decisions as to the appropriate orders based on the material available to us, including the submissions from Law Society.

THE FINDINGS AS TO THE CONDUCT OF THE SOLICITOR

7 Details are set out in our reasons of 7 May 2014, but in summary the Findings were:-

MISAPPROPRIATION OF $74,593.75

8 This was 5 amounts he received from clients for payment of barristers' fees. He caused them to be deposited into the law practice office account and did not pay the barristers' fees.

FAILURE TO PAY THE BARRISTERS' FEES

9 This of itself was unsatisfactory professional conduct.

10 Deposit of the funds for barrister's fees into the office account in each case constituted a breach of s254(1) of the Act, and the failure to use the trust money to pay the relevant barrister's fees was in each case a breach of s.255(1) of the Act.

MISAPPROPRIATION OF TRUST FUNDS OF $80,000.00

11 The solicitor drew $80,000.00 from the trust account and deposited it into the office account in order to be able to pay the wages for the employees of the practice. The transfer of the money was a misappropriation of trust money and also constituted a breach of s.255 (disbursing trust money from trust account without client authority), and a breach of s. 262 (causing deficiency of $80,000.00 in trust account).

FAILURE TO NOTIFY LAW SOCIETY OF IRREGULARITY

12 Failure of legal practitioner to notify Law Society in writing as soon as practicable of irregularity in connection with disbursement of trust money. The solicitor breached ss.263(2) because of his failure to notify the Law Society in writing as soon as practicable of his transfer of the trust money to the office account.

FAILURE TO PAY GST AND PAYE DEDUCTIONS

13 Failure to remit to the Australian Taxation Office GST billed against client's in respect of charges for the work done for them and failure to remit to the ATO PAYE deductions from employees' wages over a substantial period. The total amount was more than $850,000.00.

FAILURE TO PAY EMPLOYER CONTRIBUTIONS FOR EMPLOYEES' SUPERANNUATION

14 The law practice was obliged to pay 9% employer superannuation payments to the superannuation fund(s) of the employees. The total amount involved in respect of this default was between $200,000.00 and $255,000.00.

FAILURE TO ACCOUNT FOR MONEYS ENTRUSTED

15 The solicitor failed to account to the clients for the trust moneys entrusted to the law practice for payment of Counsel's fees on each occasion and also failed to account to the Counsel on whose behalf he received each such amount.

16 The Tribunal found the following conduct in each case constituted professional misconduct:

• the misappropriations;

• the failures to pay barristers' fees;

• the failures to pay GST and PAYE deductions;

• the failure to pay employer superannuation contributions to the superannuation funds of the employees; and

• the failures to account.

PREVIOUS PROCEEDINGS AGAINST THE SOLICITOR

17 In March 1999 in Law Society of NSW v Andreone [1999] NSWADT 14 (29 March 1999), the Administrative Decisions Tribunal reprimanded the solicitor, fined him $25,000.00, and ordered him to pay the Law Society's costs.

18 The Tribunal held that the solicitor had been guilty of professional misconduct in relation to the following matters:

19 He purported to witness a signature on an Affidavit to take an oath under the provisions of the Oaths Act, 1900 when he was not:

(a) present when the Affidavit was signed by the deponent; and

(b) the oath was not taken in accordance with the formal taking of oaths provided for in the Oaths Act,1900.

20 The solicitor misled clients or failed to inform his clients of the status of their matters and as to steps taken on their behalf. He told one client frequently her proceedings were "progressing well" and the hearing would not be long and the matter would be heard in April 1993, or "in a few months", when he had not commenced any proceedings. In another matter he failed to file a Statement of Claim in the limitation period, did not inform his partner of that failure or his Queensland principals of that failure. He filed a Notice of Motion seeking an order extending time under the Limitation Act without taking instructions.

21 In a third matter he mislead the client that a Statement of Claim had been issued when it had not been issued. He also told the client at one stage that he had obtained a default judgment against the debtor and had lodged a Writ on the title of the debtor's home. That was untrue and no Writ had been lodged.

22 For one client he failed, within time, to send the claim form to the correct Third Party Insurer. The Insurer applied to have the Statement of Claim struck out. The solicitor, without instructions from his client had the application adjourned on a number of occasions. Ultimately the Statement of claim was struck out with indemnity costs. The solicitor informed the opposing Counsel and the Court that his client consented to the Statement of Claim being struck out with indemnity costs. But the solicitor had no instructions to consent. The solicitor did not inform his client of the application by the Insurer to strike out the Statement of Claim nor did he inform the client of the orders made striking out the claim within indemnity costs.

23 The solicitor had the conduct of proceedings to have a company wound up. He wrote to this client advising that a summons for winding up had been filed and the hearing date was 17 November 1992. But no winding up summons had been filed. The solicitor caused time records to be prepared indicating that he attended at Court on 17 November, but there was no attendance at Court on that date.

24 In 1997 a woman commenced proceedings against a body corporate. In 1989 the solicitor took over the carriage of the proceedings on behalf of the body corporate. The Judge directed on 17 August 1992 that the Plaintiff file her witness statements by 28 September 1992 and the Defendant file its witness statements by 2 November 1992. The Plaintiff failed to comply with the direction. On 30 November 1992 Judge Bell directed that the Plaintiff file and serve a witness statement by 11 January 1993 and the Defendant file and serve its witness statements by 15 February 1993. The Plaintiff served her witness statements on 28 January 1993, but by 15 March 1993 the Defendant had not filed and served it witness statements. The Judge made a further direction for them to be filed by 12 April 1993. The solicitor gave false assurance to the solicitors for the Plaintiff he would be able to file and serve his witness statements by 16 April.

25 The matter was relisted at the behest of the Plaintiff and the Judge ordered the Defendant file and serve its witness statements by 21 May. The solicitor did not inform the body corporate of that direction. He failed to cause the Defendant to comply with the direction. The matter was then listed again on 11 June 1993 and the Defendant was ordered to file and service its material by 18 June 1993. Again the solicitor did not inform the body corporate of this direction. The solicitor having misled his clients prepared false documents (purported copies of letters) informing the client of matters of which he had not informed the client about. He also prepared false time costing records indicating that he attended Court on 17 November 1992.

26 It was found that the solicitor delayed carrying out instructions without reasonable cause. This was in relation to several clients' matters and it was found that the solicitor acted without instructions in at least two matters.

27 The solicitor failed on two occasions to comply with a requirement by the Law Society pursuant to s.152(1) of the Legal Profession Act 1987 that each such failure amounted to professional misconduct pursuant to s.152(4) of the Act.

CONCLUSIONS

28 The Findings made in the 1999 proceedings include numerous findings involving dishonesty. The findings made by this Tribunal in its Reasons of 7 May 2014 includes findings of dishonesty and fraud. The conduct described in our Findings of 7 May is much more serious than the conduct in the 1999 proceedings. The Administrative Decisions Tribunal held:

"The Tribunal had considered deeply what are serious matters. It is a fine line between the imposition of a substantial fine in circumstances like this and a strike off order."

Ref: Law Society of NSW v Andreone [1999] NSWADT 14 (at para.90)

29 The conduct of the solicitor in failing to pay GST, PAYE deductions and employer superannuation contributions involved the solicitor putting his own financial interests ahead of those of his employees and the other tax payers.

30 The Court of Appeal has held that in situations such as this where a solicitor has been found guilty of misappropriation of clients' money the usual order would be a striking off order (Dupal v The Law Society of NSW, NSWCA (unrep) 26/4/90).

31 The conduct of the solicitor in this matter is more serious because of the diversity of the adverse findings and also continuing dishonesty, the fraud aspects, and the conduct in these proceedings which occurred in the context of the solicitor having been almost struck off in the proceedings in 1999.

32 The Tribunal set out in its Reasons of 7 May 2014 the provisions of s.497 and 498 of the Act as to what constitutes unsatisfactory professional conduct and what constitutes professional misconduct.

33 The Tribunal is comfortably satisfied that the evidence establishes that the solicitor is not a fit and proper person to engage in legal practice. He does not have the level of honesty and integrity which the public are entitled to expect from a member of the profession.

34 Accordingly, the Application of the Law Society for the solicitor to be removed from the Local Roll of Lawyers should be granted.

COSTS

35 The Law Society seeks its costs of the proceedings.

36 Subclause 23(1) of Schedule 5 to the Civil and Administrative Tribunal Act 2013 provides:

23 Costs consequent of adverse conduct findings

(1) Despite section 60 of this Act, the Tribunal must make orders requiring an Australian legal practitioner whom it has found to have engaged in unsatisfactory professional conduct or professional misconduct to pay costs (including costs of the Commissioner, a Council and the complainant), unless the Tribunal is satisfied that exceptional circumstances exist.

37 There is no evidence in these proceedings of "exceptional circumstances" which would indicate that the order for costs sought by the Law Society should not be made.

ORDERS

38 The Orders of the Tribunal therefore are:

(1) The name Francesco Leonardo Andreone is to be removed from the Local Roll of Lawyers.

(2) The Respondent must pay the costs of the Applicant of and incidental to this Application as agreed or as assessed.

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I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.
Registrar

Amendments

13 August 2014 - Typographical error
Amended paragraphs: Cover sheet and paragraph 34 and 38.

Decision last updated: 13 August 2014