Council of the Law Society of New South Wales v Jafari

BELL P: These proceedings are brought by the Council of the Law Society of New South Wales (the Council) against Mr Mehrdad Jafari (Mr Jafari), a solicitor admitted to practice on 2 July 1993.

The Council seeks:

The relief sought is not opposed. The Court must be satisfied, nevertheless, that it is appropriate to grant the relief sought, even if the relief is not contested by the solicitor: Prothonotary of the Supreme Court of New South Wales v Livanes [2012] NSWCA 325 at [27]; Council of the New South Wales Bar Association v John Peter Hart [2011] NSWCA 64 at [12]; Council of the New South Wales Bar Association v Einfeld [2009] NSWCA 255 at [13]; Council of the NSW Bar Association v Power (2008) 71 NSWLR 451; [2008] NSWCA 135 at [9]; Prothonotary of the Supreme Court of New South Wales v McCaffery [2004] NSWCA 470 at [12].

Commendably, the parties have reached agreement as to the salient facts. They are as follows.

Subsequent to his admission on 2 July 1993, from 1 July 1995 to 23 December 2009 Mr Jafari was employed as a solicitor by the Australian Government Solicitor. From 11 January 2010 to 30 June 2015, he was employed as a solicitor by the Australian Securities & Investments Commission.

He has not held a Practising Certificate since 20 June 2015.

On or about 13 January 2016 Mr Jafari was charged by the Australian Federal Police with an offence under s 131.1(1) of the Criminal Code Act 1995 (Cth), that he dishonestly appropriated property belonging to the Commonwealth with the intention of permanently depriving the Commonwealth of that property.

The conduct in respect of which Mr Jafari was charged occurred in 2008 whilst he was an employed solicitor at the Australian Government Solicitor.

On 10 May 2016 Mr Jafari entered a plea of guilty to the charge, and was committed for trial in the District Court of New South Wales.

On or about 13 June 2017 he provided to the Law Society a Notice of Charge with a Serious Offence or a Tax Offence dated 13 June 2017, attaching an Agreed Statement of Facts in the District Court of New South Wales. Underlying the charges were the following facts which are agreed for the purposes of these proceedings.

On 14 August 2008 the Australian Government Solicitor made an interim payment of $3.5 million on behalf of the Australian Defence Force to the New South Wales Trustee and Guardian to be held in trust for the benefit of a former employee of the Australian Defence Force (Mr C) who was permanently incapacitated as the result of a training accident with the Australian Army on 18 January 2007. The Commonwealth accepted liability for the claim for compensation.

On 14 August 2008 Mr Jafari opened a trust account for the Australian Government Solicitor (AGS trust account), nominating the principal/authorised officer of the trust as ‘Marcus Jafari’. The administration of the trust was managed by the NSW Trustee and Guardian and was a trust wherein the Australian Government Solicitor, on behalf of the Australian Defence Force, would deposit funds for Mr C.

Mr Jafari was one of two Australian Government Solicitor officers responsible for authorising disbursements from the AGS trust account. He had day to day responsibilities for managing the trust account, but authority from both officers was required for the transfer of funds from the trust account.

On 15 August 2008 the Australian Government Solicitor forwarded a cheque in the sum of $3.5 million to be deposited into the AGS trust account for disbursement.

On 20 August 2008 a written authority in the form of a direction was received by the NSW Trustee and Guardian for the transfer of $220,000 from the AGS trust account by way of cheque payable to ‘Ms M’. Ms M was a friend of Mr Jafari. The direction was signed by him and a signature for his colleague was also inscribed by him without authority. The NSW Trustee and Guardian drew the cheque for $220,000 in favour of Ms M.

Westpac bank records obtained by the Australian Federal Police under execution of a search warrant at the Westpac Banking Corporation Branch at 1 King William Street, Adelaide showed that a cheque for $220,000 was deposited in the Westpac account of Ms M at the King and Castlereagh Streets branch in Sydney on 21 August 2008. The cheque deposit slip for the $220,000 obtained during the Westpac search revealed a signature that appeared to be the same signature as that on the Australian Government Solicitor direction that appeared above the name ‘Marcus Jafari’.

On 8 May 2014 a solicitor from the Australian Government Solicitor contacted Mr Jafari by telephone, at which time he was employed by the Australian Securities & Investments Commission. He stated that he did not recall the payment to Ms M in August 2008, and that he did not recognise Ms M’s name. He repeated that he did not remember the details of the $220,000 direction, and that he did not recall Ms M’s name, in a conversation with another Australian Government Solicitor on 30 May 2014.

On 5 February 2015 the Australian Federal Police executed a search warrant at Mr Jafari’s premises. He was offered an interview with the Australian Federal Police but declined to participate.

On 9 November 2016, Madgwick ADCJ referred Mr Jafari’s matter to the Community Corrections Office for an assessment of the suitability of the making of an Intensive Corrections Order. An intensive correction order assessment was conducted and a report prepared dated 24 January 2017 assessing Mr Jafari as suitable for such an order.

A Supplementary Statement of Facts in the District Court of New South Wales was tendered in Court on 9 November 2016.

A bundle of evidence was also tendered in support of Mr Jafari’s case on sentence, including medical reports. At least some of that material was also tendered in evidence before this Court on the hearing of these proceedings. The evidence disclosed that Mr Jafari had a gambling addiction. He submitted that he misappropriated the $220,000 from the AGS trust account in order to repay Ms M in connection with funds he owed her that he had spent on gambling.

On 30 January 2017, Madgwick ADCJ sentenced Mr Jafari to two years’ imprisonment to be served by way of an intensive corrections order.

On or about 27 February 2017, the Director of Public Prosecutions filed a notice of appeal contending that the sentence imposed by Madgwick ADCJ was manifestly inadequate.

By consent order dated 16 March 2017, in civil proceedings which had been commenced by the Commissioner of the Australian Federal Police against Mr Jafari, Mr Jafari paid the sum of $300,000 in finalisation thereof, with no order as to costs.

On 15 May 2017 the Director of Public Prosecutions filed an amended notice of appeal in the Court of Criminal Appeal, adding to the claim of manifest inadequacy of the head sentence a challenge to the manner by which it was to be served, namely an intensive correction order.

On 29 June 2017 the Court of Criminal Appeal ordered that the appeal against sentence be allowed, that the sentence imposed by Madgwick ADCJ be set aside, and that Mr Jafari be sentenced to a term of imprisonment of three years, and that he be released on 29 July 2018 pursuant to a recognisance release order subject to conditions: R v Jafari [2017] NSWCCA 152.

The precise orders of the Court of Criminal Appeal were as follows:

Although the fact of the appeal and the orders of the Court on resentencing are admissible (Crawley v Vero Insurance Ltd (No 7) [2014] NSWSC 80 at [20]), the judgment of the Court of Criminal Appeal is not, of course, admissible to prove the existence of a fact that was in issue in that proceeding: Evidence Act 1995 (NSW) s 91(1).

The Council invokes the Court’s inherent jurisdiction relating to the control and discipline of lawyers, as preserved by the Legal Profession Uniform Law (NSW) s 264(1) which relevantly provides:

The Council submitted that, having regard to the circumstances of the case and in particular to Mr Jafari’s criminal offending that occurred in the course of his work as a solicitor for the Australian Government Solicitor, the Court would be satisfied that Mr Jafari is permanently unfit to practise, and referred to New South Wales Bar Association v Cummins (2001) 52 NSWLR 279; [2001] NSWCA 284 at [26] (Cummins) citing Prothonotary of the Supreme Court of New South Wales v Ritchard (Court of Appeal (NSW), 31 July 1987, unrep) at 21 (McHugh JA).

Where an order for removal from the roll is contemplated, the ultimate issue is whether the practitioner is shown, at the time of hearing, not to be a fit and proper person to be a legal practitioner of the Supreme Court: A Solicitor v Council of the Law Society of New South Wales (2004) 216 CLR 253; [2004] HCA 1 at [12]; Southern Law Society v Westbrook (1910) 10 CLR 609; [1910] HCA 31.

In Prothonotary v Gregory [2017] NSWCA 101 at [6], Bathurst CJ, Beazley P and Sackville AJA noted that:

In the present case, the prior offending took place in 2008. That having been said, it remained dishonestly concealed by Mr Jafari for many years, and when Mr Jafari was first confronted about the payments on 8 May 2014, as noted at [17] above, he stated that he did not recall the payment to Ms M in August 2008, and that he did not recognise Ms M’s name. He repeated that he did not remember the details of the $220,000 direction, and that he did not recall Ms M’s name, in a conversation with another Australian Government Solicitor on 30 May 2014. These denials were utterly dishonest.

It is impossible to accept that Mr Jafari could have forgotten the payment to Ms M which he had orchestrated in 2008. It was for an extremely significant amount and involved not only the plainest breach of trust, but was so fundamentally at odds with his legal and moral responsibilities that it is not a matter which could be erased from a person’s mind, even after the effluxion of almost six years. As such, whilst there was only one offence charged, Mr Jafari’s initial and grave dishonesty was compounded by his ongoing concealment of his crime and his dishonest responses when ultimately confronted with it in 2014.

Disciplinary proceedings are concerned with the protection of the public, rather than the punishment of the individual: Wentworth v New South Wales Bar Association (1992) 176 CLR 239 at 251; [1992] HCA 24; Clyne v New South Wales Bar Association (1960) 104 CLR 186 at 201-2; [1960] HCA 40. In New South Wales Bar Association v Evatt (1968) 117 CLR 177 at 183-4; [1968] HCA 20, the High Court noted that:

It is a well-established proposition that fitness to practise law carries with it the requirement that the person concerned exhibits honesty and integrity. In Cummins at [19]-[20], Spigelman CJ (with whom Mason P and Handley JA agreed) observed that:

The utmost importance of honesty and integrity in the case of a solicitor extends, of course, to a solicitor’s dealings with moneys, whether held on trust for clients or not. In the present case, the moneys stolen by Mr Jafari were from a trust account in which moneys were held ultimately for the benefit of an injured former employee of the Australian Defence Force.

The act of misappropriation, undertaken whilst working as a solicitor and in respect of funds under his stewardship in that capacity, also involved Mr Jafari countersigning a direction to the NSW Trustee and Guardian for the transfer of $220,000 from the AGS trust account in the name of his fellow officer in the Australian Government Solicitor without that officer’s authority. This was a deliberate circumvention of a mechanism put in place to safeguard abuses of trust and dishonesty: see [15] above. Although Mr Jafari was not charged with forgery, the dishonesty evident in this aspect of the theft also bears upon his honesty and fitness to practise as a solicitor.

It should further be noted that the payment of the $220,000 to Ms M on 21 August 2008 (see [15] above) also had its origins in dishonesty on the part of Mr Jafari, in that Ms M had originally provided him the money he purported to repay her so that he could invest it on her behalf. Instead, he evidently gambled it away.

There are, therefore, at least four elements of serious dishonesty disclosed in the present case. First, the initial deception of Ms M as to the use of funds she had entrusted to Mr Jafari to invest. Second, the theft of the AGS trust account funds in an extremely large amount. Third, as part of that theft, the unauthorised countersignature on the direction to disburse funds issued to the NSW Trustee and Guardian. Fourth, the twice feigned ignorance of these matters when confronted on 8 and 30 May 2014. Moreover, within the six year period between the first and fourth of these instances of deceit and dishonesty, the overall criminality was concealed from the Australian Government Solicitor, the Australian Securities and Investment Commission and the Law Society of New South Wales.

In the words of Mr Jafari’s wife, also a solicitor of this Court, in an affidavit filed on his sentencing hearing but which was also in evidence before this Court on the occasion of the Council’s application:

For the above reasons, it is plain that Mr Jafari’s name must be removed from the register. To adopt the language of Brereton JA in Council of the Law Society of New South Wales v Parente [2019] NSWCA 33 at [68], “ a significant body of professional peers might well feel difficulty in meeting with [Mr Jafari] and co-operating with him in the life and work of the profession” with the knowledge of his past serious acts of dishonesty, and his “misconduct was of a quality that it would be inimical to the reputation of the profession, and to public confidence in it, for his name to remain on the roll”. Mr Jafari did not seek to contend otherwise and had entered a submitting appearance.

I am satisfied that the orders sought by the Council should be made.

One of these orders is a declaration that Mr Jafari is not a fit and proper person to remain on the roll of Australian lawyers. Although in Council of the Law Society of New South Wales v Michael Arthur Hislop [2019] NSWCA 302 at [2], I associated myself with the view of Brereton JA that as the fact that a person is “not a fit and proper person to remain on the roll” follows inevitably from an order of this Court to remove a person’s name from the roll and need not be the subject of a separate declaration, on reflection I prefer and endorse the observations of Spigelman CJ in Cummins at [32], namely that:

Accordingly, I would make orders in the following terms:

WHITE JA: I agree with Bell P.

EMMETT AJA: The Council of the Law Society of New South Wales has applied to the Court for the removal, from the Roll of Australian Lawyers, of the name of the defendant, Mr Mehrdad Jafari, on the ground that he is not a fit and proper person to remain on the Roll. The orders sought are not opposed.

Mr Jafari was admitted as a solicitor on 2 July 1993 and thereafter was employed as a solicitor by the Australian Government Solicitor and by the Australian Securities and Investments Commission. However, on 10 May 2016, Mr Jafari pleaded guilty to a charge that, in contravention of s 131.1(1) of the Criminal Code Act 1995 (Cth), he dishonestly appropriated property belonging to the Commonwealth with the intention of permanently depriving the Commonwealth of that property. The offence involved a dishonest and studied breach of trust on the part of Mr Jafari.

The District Court of New South Wales sentenced Mr Jafari to two years imprisonment, to be served by way of an intensive corrections order. However, an appeal to the Court of Criminal Appeal was allowed and a sentence of three year's imprisonment was imposed in lieu of the sentence imposed in the District Court. Clearly, Mr Jafari is not a fit and proper person to remain on the Roll.

I have had the advantage of reading in draft form the proposed reasons of the President. I agree with the orders proposed by his Honour for the reasons proposed by him.