The Council of the Law Society of New South Wales v O’Brien

1. [1]

   THE COURT: The applicant, the Council of the Law Society of New South Wales (Council), seeks a declaration that the respondent, Mark Leo O’Brien, is not a fit and proper person to remain on the Roll of lawyers (Roll) maintained by the Supreme Court under s 22 of the Legal Profession Uniform Law (NSW) (Uniform Law) and an order removing his name from the Roll.

2. [2]

   The Council also seeks an order that the respondent pay its costs. The respondent does not oppose the substantive relief sought. The respondent submits that any order for costs in favour of the Council should exclude all costs of and incidental to the preparation of Exhibit VG1 to the affidavit of Ms Valerie Anne Griswold affirmed 6 March 2025 (Exhibit VG1).

3. [3]

   For the reasons which follow, the orders sought by the Council should be made.

Jurisdiction of the Court

1. [4]

   The Council invokes the jurisdiction of the Supreme Court under s 23(1)(b) of the Uniform Law to order the removal of the name and other particulars of a person from the Roll on the recommendation of the designated local regulatory authority. The Council is the relevant designated local regulatory authority for these purposes: Table 1, s 11(1) of the Legal Profession Uniform Law Application Act 2014 (NSW).

2. [5]

   The Council resolved on 13 November 2023 that it was of the view that the respondent is not a fit and proper person to remain on the Roll and that, given that finding, proceedings would be instituted for the purposes of s 23(1)(b) of the Uniform Law seeking the removal of the respondent’s name from the Roll. The necessary recommendation by the Council engaging the Court’s jurisdiction under s 23(1)(b) is established where there is a resolution of this kind and a summons is filed by the Council seeking an order for removal: Council of the Law Society of New South Wales v Green [2022] NSWCA 257 (Green) at [57].

3. [6]

   The jurisdiction of the Supreme Court to remove a lawyer from the Roll under s 23(1)(b) of the Uniform Law exists in parallel to the Court’s inherent jurisdiction to take the same action in respect of its officers: Council of the Law Society of New South Wales v Clifton [2021] NSWCA 340 (Clifton) at [7]. Proceedings of this kind involving the exercise of disciplinary powers of the Supreme Court with respect to legal practitioners are assigned to the Court of Appeal pursuant to s 48(2)(k) of the Supreme Court Act 1970 (NSW) and Pt 65A, r 2 of the Supreme Court Rules 1970 (NSW).

Principles governing an application to remove a legal practitioner from the Roll

1. [7]

   Where an application is made for removal of the name of a practitioner from the Roll, the question to be determined is whether the practitioner is a fit and proper person to remain as a member of the profession: In Re Davis (1947) 75 CLR 409; [1947] HCA 53 at 416 (Re Davis); Ziems v The Prothonotary of the Supreme Court of New South Wales (1957) 97 CLR 279; [1957] HCA 46 at 297-298; Green at [58]. That involves an assessment of current fitness and likely future fitness. Where the facts demonstrate that the practitioner is presently not fit to practise and is likely to be unfit for the indefinite future, removal from the Roll is the appropriate order: Green at [67]; New South Wales Bar Association v Cummins (2001) 52 NSWLR 279; [2001] NSWCA 284 at [25]-[28] (Cummins).

2. [8]

   Notwithstanding the findings and recommendation of the Council, and the lack of opposition from the practitioner concerned, this Court must determine for itself whether the practitioner is no longer a fit and proper person to remain on the Roll: Clifton at [9]; Prothonotary of the Supreme Court of New South Wales v McCaffery [2004] NSWCA 470 at [12].

3. [9]

   The purpose of the Court’s jurisdiction is protection of the public and maintenance of confidence in the legal profession. That purpose is served by a process of public accountability and by providing a measure of general deterrence to other practitioners: Green at [58].

4. [10]

   The underlying purpose informs the way in which applications of this kind are resolved. Even where there is no factual controversy and no opposition to an order removing a practitioner from the Roll (as in the present case), the Court ought to record the relevant facts of the impugned conduct. Wrongful conduct that brings disrepute to the profession should be the subject of complete examination. A determination by the Court that contains appropriately detailed factual findings and explains the judicial response serves to advance public confidence in the control and discipline of the profession: Prothonotary of the Supreme Court of New South Wales v Thomson [2018] NSWCA 230 at [4]. As Allsop P (with whom Giles and Hodgson JJA agreed) said in Council of the New South Wales Bar Association v Einfeld (2009) 258 ALR 768; [2009] NSWCA 255 at [16]:

5. [11]

   A judgment which records in some detail the factual circumstances warranting the removal of the practitioner from the Roll is also appropriate given the possibility that there may be a later application by the legal practitioner for readmission, requiring another authority to assess the fitness and propriety of the practitioner: see Bridges v Law Society of NSW [1983] 2 NSWLR 361 at 362C, 368E; Cummins at [24]; Council of New South Wales Bar Association v Power (2008) 71 NSWLR 451; [2008] NSWCA 135 at [10]-[11].

6. [12]

   Where misconduct by a practitioner involves dishonesty, there are significant implications for the maintenance of public confidence in the legal profession. In Re Davis at 420 Dixon J said, in relation to a barrister, that:

7. [13]

   In Thomson the Court of Appeal, after quoting this passage, said the following:

8. [14]

   Spigelman CJ (with whom Mason P and Handley JA agreed), addressed questions of honesty and integrity in Cummins:

9. [15]

   These interests are in particular jeopardy where the misconduct of the practitioner involves the misappropriation of trust funds. Courts have adopted a strict approach in response to such misconduct. In Barwick v Council of the Law Society of New South Wales (2004) Aust Torts Reports 81-730; [2004] NSWCA 32 Ipp JA (with whom Tobias JA and Stein AJA agreed) said at [118]:

10. [16]

    In Council of Law Society of New South Wales v Ghobrial [2024] NSWCA 307 the practitioner in question had misappropriated $483,571.82 in trust funds systematically over a period of approximately six months. Following the conviction of the practitioner in the District Court for larceny as a bailee, the sentencing judge described the practitioner’s offending as “persistent, frequent and calculated”. Bell CJ (with whom Payne and Stern JJA agreed) said:

11. [17]

    The Chief Justice observed at [19] that misappropriation of trust funds ordinarily attracts the consequence of removal from the Roll, as the Court had found in Green at [65]. That has long been the position. In 1990 Kirby P said in Du Pal v The Law Society of New South Wales (Court of Appeal, 26 April 1990, unreported) that 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”.

12. [18]

    The strict approach to conduct involving the dishonest handling of money can also be seen in Thomson. The offending conduct of Mr Thomson did not involve a solicitor’s trust account, but rather the misappropriation of funds of the Health Services Union by Mr Thomson in his capacity as an official of the union. The Court said, at [17], that “[r]epeated misappropriation from any entity that has entrusted a person with control of its funds will expose a characteristic inconsistent with the holding of trust moneys for clients”.

Factual background

1. [19]

   The events giving rise to the present application are set out in an agreed statement of facts, and in other evidence adduced by the Council. The evidence includes the notifications made to the Law Society about mishandling of trust money by the respondent, ensuing investigation reports prepared for the Law Society and sentencing remarks made upon the sentencing of the respondent and his wife in the District Court. The respondent did not object to the applicant relying on this material, including the sentencing remarks of Sutherland SC DCJ, to prove the truth of the matters referred to therein. In those circumstances, the Court is entitled to take into account the material adduced by the applicant, including the findings made by the sentencing judge: Green at [47]-[53]; Hilton v Legal Profession Admission Board [2017] NSWCA 232 at [55]-[56].

2. [20]

   The respondent was born on 2 June 1956. He was admitted to the legal profession in New South Wales on 11 July 1980 and held a practising certificate from 1 July 1981 until 1 March 2019, when it was suspended by the Council pursuant to s 77 of the Uniform Law.

3. [21]

   The respondent was a partner in a law practice known as Harrington Maguire & O’Brien (formerly Harrington Maguire and Company). He was involved with the practice from November 1985. It has been described by Mr John Maguire, a second principal of the practice, as an old-fashioned general practice, operating initially out of York Street in Sydney before relocating to Edgecliff. In his capacity as a principal and partner of that practice the respondent had control over the trust account of the practice.

4. [22]

   On 21 February 2019 Mr Maguire notified the Law Society under s 154(1) of the Uniform Law of irregularities in the management of the practice’s trust account. On the same day the respondent attended the premises of the Law Society and reported that he had misappropriated trust money from the trust account. The notifications at that time concerned the misappropriation of trust funds that had been received by the law practice in relation to the estate of Ms Aileen Delaney (Delaney Estate) in 2018.

5. [23]

   Under the terms of Ms Delaney’s will, which appointed the respondent as executor, one-third of the residuary estate of the Delaney Estate ought to have been distributed to St Vincent’s Hospital and two-thirds ought to have been distributed to the St Vincent de Paul Society. In his notification to the Law Society on 21 February 2019 the respondent admitted that he had deposited $1.7 million, which had been received into the trust account for the Delaney Estate following the release of a bond, into the joint account that he held with his wife, by way of a cheque payable to his wife. The precise amount in question was later found to be $1,773,486.23. The respondent admitted that he had misappropriated an additional amount of roughly $2.7 million from funds held in the trust account for the Delaney Estate. The precise amount was later found to be $2,740,288.12. This misappropriation had also taken the form of a cheque payable to his wife which was deposited into their joint account.

6. [24]

   The respondent produced forged documents and made false entries in the trust account ledger in an attempt to conceal his misappropriation. The proceeds of this activity were used to acquire a property at 36 Woodstock Street, Bondi Junction. In his notification to the Law Society on 19 February 2019 the respondent indicated that this was the extent of the misappropriation of trust money that he needed to report. He made no mention of having misappropriated trust funds in relation to any other estate.

7. [25]

   It subsequently emerged that on three occasions before the death of Ms Delaney the respondent had also abused his position of trust under an enduring power of attorney by transferring money from Ms Delaney’s account to the joint bank account that the respondent shared with his wife. The first amount of $5,000 was transferred on 27 November 2017. A further $100,000 was transferred on 15 December 2017, and $50,000 was transferred on 19 December 2017.

8. [26]

   On 28 February 2019 respondent advised the Law Society, through his solicitor, that in 2015 he had also misappropriated approximately $1.2 million in trust money held for the estate of Ms Margaret Ruth Rafferty (Rafferty Estate). Ms Rafferty’s will provided for bequests of various kinds, including $100,000 to each of the Central Sydney Area Health District and the St Vincent de Paul Society. The residue of Ms Rafferty’s estate was left in equal shares to the Royal Australian and New Zealand College of Ophthalmologists (RANZCO) and the Paraplegic and Quadriplegic Association of NSW (Paraquad). The respondent had acted as solicitor on behalf of Mr Robert Rafferty, who was Ms Rafferty’s nephew and the executor of the estate.

9. [27]

   The respondent misappropriated $200,000 from the trust account, nominally due to be paid by way of legacy to the Central Sydney Area Health District and the St Vincent de Paul Society. The respondent drew two cheques of $100,000 and deposited the money into his personal bank account. He sought to cover up the conduct by making false entries in the trust ledger purporting to show that the sums had been paid to the intended beneficiaries.

10. [28]

    The respondent subsequently opened a joint bank account, with his wife, for the specific purpose of receiving further fraudulently obtained funds. He drew two further trust account cheques from the funds held for the Rafferty Estate, each in the amount of $654,956.05, corresponding to the amounts that ought to have been paid to RANZCO and Paraquad. The cheques, which were in the name of the respondent’s wife, were deposited into the joint account. The respondent made a small donation to Paraquad so as to obtain a receipt, which he then used to prepare a forged receipt. The forged receipt was placed on the file in an attempt to support a false ledger entry and create the false impression that the funds had been distributed properly. Similar forged entries and records were created in relation to RANZCO.

11. [29]

    The respondent had used the funds from the Rafferty Estate to discharge a mortgage on a property he owned on Old South Head Road. The respondent held some of the money in his self-managed superannuation fund (invested in a share portfolio to the value of approximately $2.1 million) and in cash (approximately $200,000). The sentencing judge found that other funds that had been misappropriated by the respondent, in addition to being used for the purchase of the Bondi Junction property, were disbursed on expenses such as the leasing of a BMW vehicle and cash gifts to his children.

12. [30]

    The interim report of Mr Lombe, the Law Society’s investigator, concluded that a total of $6,123,686.18 had been misappropriated by the respondent (comprising $4,613,774.08 from the Delaney Estate and $1,509.912.10 from the Rafferty Estate). The misappropriated amounts corresponded to the amounts due to be paid to charities under each of the Delaney and Rafferty wills, whether by way of specific bequest or the distribution of the residuary estate. A final report of Mr Lombe issued on 31 July 2019 concluded that the total amount misappropriated by the respondent was $6,178,686.18. The additional $55,000 concerned the Delaney Estate.

13. [31]

    On 22 November 2020 the respondent was charged by NSW Police with seven offences of dishonestly obtaining financial advantage by deception and four offences of knowingly dealing with proceeds of crime. He subsequently pleaded guilty to ten charges, with the eleventh charge to be taken into account pursuant to s 32 of the Crimes (Sentencing Procedure) Act 1999 (NSW) on the basis that the respondent admitted guilt.

14. [32]

    On 16 March 2021 the respondent was sentenced in the District Court to an aggregate term of imprisonment of ten years, commencing on 16 March 2021 and expiring on 15 March 2031, with a non-parole period of six years. The respondent is in custody and is presently held in Emu Plains Correctional Centre.

The respondent is not a fit and proper person to remain on the Roll

1. [33]

   It is plain that the respondent is not a fit and proper person to remain on the Roll. He engaged in egregious abuses of trust in his capacity as a solicitor. The conduct was calculated and repeated over a sustained period of many years. The sums involved were very substantial. The conduct reveals an absence of the basic qualities of honesty, trustworthiness and integrity which are required of a solicitor, and which are fundamental to the maintenance of public confidence in the legal profession and the administration of justice. The demonstrated lack of such qualities means that the respondent is not presently a fit and proper person to remain on the Roll and that is likely to be the case indefinitely. The only appropriate response is removal of the respondent from the Roll.

Declaratory relief

1. [34]

   It is also appropriate that a declaration should be made in substantially the terms sought by the Council. The additional benefit of declaratory relief was explained by Spigelman CJ in Cummins at 286:

Costs

1. [35]

   Costs should follow the event. While broadly accepting the inevitability of that outcome, the respondent asks the Court to qualify the order by excluding costs associated with the preparation of Exhibit VG-1. The respondent contends that, rather than incur the costs of preparing Exhibit VG-1, the Law Society ought to have contacted him and invited him to agree to a statement of agreed facts in the terms which were ultimately agreed on 8 May 2025.

2. [36]

   Exhibit VG-1 is a collection of documents, with a total of 215 pages. The documents in question are the notifications and correspondence passing between the Law Society and Mr Maguire, the respondent and the respondent’s solicitor, the interim and final reports of Mr Lombe, the formal resolutions of the Law Society and the records of criminal conviction and sentencing remarks in the District Court.

3. [37]

   It was necessary for the various records contained in Exhibit VG-1 to be put before the Court for the purposes of resolving this matter. As explained above, the Court must satisfy itself that an order for removal is appropriate, irrespective of the agreed position of the parties. The Court is also required to examine the factual circumstances in some detail. The agreed statement of facts that was signed by the Law Society on 8 May 2025, while useful, was not self-sufficient.

4. [38]

   The Law Society acted reasonably and appropriately in adducing the evidence in Exhibit VG-1. There is no basis to infer that it would have been more efficient to seek to agree a comprehensive statement of agreed facts. Indeed, given the relatively straightforward exercise of compiling the documents in the form of an exhibit to an affidavit, it is quite likely to have been the more efficient course.

5. [39]

   The orders of the Court are:

   1. (1)

      The Court declares that Mark Leo O’Brien is not a fit and proper person to remain on the Roll of Australian lawyers (Roll) maintained by the Supreme Court for the jurisdiction of New South Wales under s 22 of the Legal Profession Uniform Law (NSW).

   2. (2)

      An order that the name of Mark Leo O’Brien and any associated particulars be removed from the Roll.

   3. (3)

      The respondent is to pay the applicant’s costs.