The Council of the Law Society of New South Wales v Chalabian

THE COURT: The Council of the Law Society of New South Wales (Council), by Amended Summons filed on 19 May 2025, seeks a declaration and orders to be made by this Court in its inherent jurisdiction to the effect that the name of the respondent, Sevag Chalabian, an Australian lawyer admitted to the Australian legal profession in New South Wales and recorded as a lawyer on the roll maintained by the Supreme Court of New South Wales (Roll) pursuant to s 22 of the Legal Profession Uniform Law (NSW) (Uniform Law), be removed from the Roll, he not being a fit and proper person to remain on the Roll.

The respondent consents to the orders sought, including as to costs.

The respondent was admitted to the legal profession in New South Wales on 15 December 1993 and held a practising certificate issued by the Council in each practising year from 1 July 1994 to 1 June 2017, when he voluntarily surrendered his practising certificate for the practising year ending 30 June 2017, and from 1 September 2017 to 30 May 2022, when the Council resolved to cancel the respondent’s practising certificate pursuant to s 89(2) of the Uniform Law. The respondent’s practising certificate was suspended on 29 April 2022 prior to being cancelled on 30 May 2022.

The respondent practised as a lawyer: from 1 July 1994 to 30 April 2004, at the law practice then known as Phillips Fox (from 1 July 1994 to 3 June 2000 as an employee, and from 1 July 2000 to 30 April 2004 as a principal); from 10 May 2004 to 1 June 2017, at the law practice known as Lands Legal Pty Ltd (Lands Legal) as a principal; from 13 February 2019 to 1 November 2019, at the law practice known as Visionary Investment Group Pty Ltd as a corporate legal practitioner; from 1 September 2017 to 30 May 2022, at the law practice known as Reign Consulting Pty Ltd as a principal; and from 16 November 2020 to 30 May 2022, at the law practice known as Blackstone Waterhouse Pty Ltd as an employee.

The matters giving rise to the present proceedings relate to the respondent’s time at Lands Legal. At all relevant times, Lands Legal operated a trust account to which the respondent had access.

On 13 July 2018, the respondent disclosed to the Law Society of New South Wales that on 11 July 2018 he had been charged with the offence of conspiring with other persons with the intention of dishonestly causing a loss to a third person (the Commonwealth), contrary to s 135.4(3) of the Criminal Code 1995 (Cth) (Criminal Code). The respondent included in that Notice of Charge a copy of the Court Attendance Notice and police factsheet in relation to the matter.

On 21 April 2022, the respondent was arraigned at the Supreme Court of New South Wales before Johnson J. The indictment charged the respondent with one count of money laundering (dealing with money or property that was, and what he believed to be, the proceeds of crime, the value of which was $1 million or more) contrary to section 400.3(1) of the Criminal Code, particularised as follows:

At the arraignment, the respondent pleaded not guilty. The matter proceeded to trial by jury in the Supreme Court of New South Wales between 21 February 2022 and 21 April 2022. On 21 April 2022, the jury found the respondent guilty of the offence charged.

On 23 June 2022, the respondent was sentenced to a period of twelve years’ imprisonment, commencing on 23 June 2022 with a non-parole period of seven years and six months. The respondent will first be eligible for release on parole on 23 December 2029. The respondent’s subsequent application for leave to appeal against conviction was refused and the respondent’s appeal against sentence was dismissed (Chalabian v R [2024] NSWCCA 47).

The respondent remains in custody and, as at 27 August 2025, was being held in Geoffrey Pearce Correctional Centre, South Windsor, New South Wales.

On 24 May 2023, the Council resolved to commence these proceedings.

The circumstances giving rise to the money laundering offence, as emphasised by the Council, are as follows.

Between 1 March 2014 and 17 May 2017, a number of people (the Plutus conspirators), not including the respondent, obtained large sums of money by fraudulently collecting tax revenue and not remitting it to the Australian Taxation Office (ATO). The tax fraud was executed in the following way.

In 2014, the Plutus conspirators established a company called Plutus Payroll Australia Pty Ltd (Plutus), and a number of related subcontracting companies, which provided payroll administration services on behalf of a number of large corporate employers. Those large corporate employers made regular transfers to Plutus on the understanding that those funds would be used to pay the wages and salaries of relevant employees and contractors, and also that Plutus would withhold, and remit to the ATO, the required Pay As You Go Withholding contributions.

The Plutus conspirators used Plutus and the related companies (and the use of “straw directors”) to collect Pay As You Go Withholding contributions and Goods and Services Tax and, rather than pay those amounts to the Commissioner of Taxation, retained them for their own benefit (the tax fraud conspiracy).

Between 1 March 2014 and 18 May 2017, Plutus collected at least $105,625,304 through the tax fraud conspiracy.

Between 1 October 2016 and 17 May 2017, two of the Plutus conspirators, Daniel Rostankovski and Daniel Hausman, and another person, Person X, agreed upon and executed a plan to blackmail the other Plutus conspirators, demanding payment of $25 million, failing payment of which Messrs Rostankovksi and Hausman threatened to publicise the tax fraud conspiracy. Messrs Rostankovski and Hausman arranged with the respondent that they would deposit funds into Lands Legal’s trust account and that he would disburse those funds at their direction.

Over a 12-week period from 1 February 2017 to 18 May 2017, the respondent engaged in a course of conduct by which he received into the Lands Legal trust account 53 deposits worth $24,244,740, believing those funds were the proceeds of crime, and disbursed the funds in 22 distributions on instructions from Messrs Rostankovski and Hausman.

In the same period, the respondent created a false paper trail, which included negotiating the terms of two deeds (the first of those being negotiated from 1 February 2017 and the second being executed on 6 March 2017), which purported to pass off as legitimate the transactions into Lands Legal’s trust account.

The respondent also received a total of $51,597.06 from Messrs Rostankovski and Hausman in respect of his role in laundering the money, paid into an account held by Lands Legal.

On sentencing, Johnson J said (see R v Chalabian (No 14) [2022] NSWSC 829 (R v Chalabian (No 14)) at [107]-[109]):

The Council seeks a declaration of unfitness and an order for the removal of the respondent’s name from the Roll in this Court’s inherent jurisdiction (as adverted to above); that inherent jurisdiction being preserved by ss 22, 23 and 264 of the Uniform Law.

Section 23(1)(b) of the Uniform Law provides that the Supreme Court may order the removal of a person’s name from the Roll on the recommendation of the designated local regulatory authority. The Council is a designated local regulatory authority for the purposes of Chapter 2, ss 14 and 23 of the Uniform Law. The resolution of the Council dated 13 June 2024 and the Amended Summons amount to such a recommendation. The Council contends that, having regard to the severity of the conduct in question, which is not in dispute, this is an appropriate case for the Court to exercise its inherent jurisdiction relating to the control and discipline of lawyers.

As to the declaration of unfitness which is here sought, the Council notes that declarations of unfitness have been made in a number of cases (citing Council of the Law Society of New South Wales v Parente [2019] NSWCA 33 (Parente) at [14]; Council of the Law Society of New South Wales v Jafari [2020] NSWCA 53 (Jafari) at [44]: Council of the Law Society of New South Wales v Clarke [2022] NSWCA 57 (Clarke) at [12]; Council of the Law Society of New South Wales v Duncan [2024] NSWCA 147 at [21]; Council of the Law Society of New South Wales v Green [2022] NSWCA 257 (Green) at [73]-[77]; Council of the Law Society of New South Wales v Croke [2024] NSWCA 195 at [14] and The Council of the Law Society of New South Wales v O’Brien [2025] NSWCA 215 at [34]).

As noted in New South Wales Bar Association v Cummins (2001) 52 NSWLR 279; [2001] NSWCA 284 (Cummins) at [32] (quoted with approval in Jafari at [44]), a declaration of unfitness serves the public interest “not least by reaffirming the high regard the Court has for the reputation and standing of the legal profession” and to assure the public that conduct of the kind there (and here) in question is not tolerated in the profession.

As to the application for the removal of the respondent’s name from the Roll, while the respondent consents to the orders sought, it is necessary that this Court be independently satisfied that the respondent is not presently fit to practise and is likely to be unfit in the indefinite future, such that the removal of his name from the Roll is appropriate.

What must be determined, on the civil standard of proof is whether the practitioner is a fit and proper person to remain a member of the profession (see Re Davis (1947) 75 CLR 409 at 416; [1947] HCA 53; Prothonotary of the Supreme Court of New South Wales v Yousif [2025] NSWCA 77 at [45]). This requires the application of established principles reflecting the purpose of disciplinary proceedings, namely, the protection of the public and its confidence in the legal profession (Prothonotary of the Supreme Court of New South Wales v Thomson [2018] NSWCA 230 (Thomson) at [12]). An order for removal of a practitioner’s name from the Roll is warranted where the Court is satisfied that the respondent is “probably permanently, or at least indefinitely, unfit to practise” (see Council of the Law Society of New South Wales v Karimjee [2021] NSWCA 179 at [29] affirming Council of the Law Society of New South Wales v Zhukovska [2020] NSWCA 163 at [115]).

Although, as noted in Thomson at ([14]), the fact of a criminal conviction may not always disqualify a person from legal practice, the defects of character and the disgrace flowing from the conviction may be incompatible with continued practice (the Court there citing Ziems v Prothonotary of the Supreme Court of New South Wales (1957) 97 CLR 279 at 288; 298; [1957] HCA 46) and the consequence of Roll removal was there said to follow more readily in relation to crimes involving dishonesty and misappropriation (see also Parente at [26], Clarke at [9] and The Prothonotary v X [2024] NSWCA 251 (The Prothonotary v X) at [12]).

In Prothonotary of the Supreme Court of New South Wales v Dimitrious [2015] NSWCA 258 (at [21]) the Court quoted the following statement of Ipp JA in Barwick v Council of the Law Society of New South Wales [2004] NSWCA 32; [2004] Aust Torts Reports 81-730 at [118]:

The Council here contends that, having regard to the circumstances and gravity of the respondent’s criminal offending, which involved utilising his knowledge and professional status as a solicitor to play a “critical and indispensable role” in a complex money laundering operation, the respondent is permanently unfit to practice. The Council contends that the integral role played by the respondent, the considerable amount of money involved and the manner in which the respondent’s conceit was discovered are aggravating features with respect to the respondent’s conduct.

The Council emphasises that fitness to practise law requires the person concerned to demonstrate honesty and integrity, referring to Cummins (at [19]-[20]) per Spigelman CJ (with whom Mason P and Handley JA agreed) and notes that the protective jurisdiction is concerned not only with the protection of clients and other practitioners but also with the protection of the reputation of the profession and maintenance of public confidence in it (citing Parente at [49]).

As to whether the respondent is likely to remain unfit to practise as a solicitor for the indefinite future, the Council submits that the deliberate and intentional nature of the conduct and the absence of any evidence suggesting the respondent has taken steps to address the way he might safeguard against such conduct in the future are relevant matters to take into account (citing Green at [71]).

As noted, the respondent accepts that the relief sought by the Council should be made because of his conviction of an offence under s 400.3(1) of the Criminal Code and because of the preparation of sham documents relating to the receipt of moneys into Land Legal’s trust account, both of which occurred in the course of legal practice.

The respondent accepts that this Court “retains the responsibility to be satisfied that the orders sought are appropriate on the facts found which is to say that the Court must independently exercise the power under s 23(1)(c) [or in this case, s 23(1)(b)] of the [Uniform Law] on the evidence and material before it” (citing Council of the Law Society v Sideris [2025] NSWCA 159 at [6]) and that it is in the public interest for this Court to examine his conduct and make findings which reflect the disapprobation required (citing Cummins at [24]; [32]).

As to his conviction, which the respondent accepts speaks for itself, the respondent notes that, even if he had not been convicted of an offence under s 400.3(1) of the Criminal Code, his offer to plead guilty to a lesser offence under s 400.3(2) of the Criminal Code (of recklessly dealing with the proceeds of crime) necessarily produces the same result (referring to the remarks on sentence in R v Chalabian (No 14) at [28]-[30]). As to the sham transactions, the respondent refers to the findings by Johnson J (at [63]; [74]-[84] of the sentencing judgment), as well as the similar findings made by Nixon J in Plutus Payroll Australia Pty Ltd (in liquidation) v Saikali [2024] NSWSC 1093; (2024) 389 FLR 58 at [216]-[218]; [229]. The respondent notes that those proceedings resulted in a substantial judgment for the recovery of moneys which had passed through the Lands Legal trust account.

The respondent accepts that the creation of false documents is conduct inimical with the obligations of a legal practitioner as an officer of the Court, accepting that honesty and integrity are the hallmarks of a legal practitioner (see Cummins at [19]).

The respondent in his submissions expresses remorse for what he has done and acknowledges that his conduct was detrimental to the reputation of the legal profession and to other legal practitioners.

There is no doubt that the conduct of the respondent is such that he is presently unfit to practise as a lawyer. Honesty and integrity are fundamental and indispensable requirements for lawyers and the observance of those requirements and the preservation of the sanctity of solicitors’ trust accounts are important to the maintenance of public confidence in the administration of justice. It must always be remembered that it is a privilege, not a right, to practise law. The serious nature of the respondent’s criminal conduct, which involved violation of the sanctity of the trust accounts of his firm and the creation of sham documents, makes inevitable the conclusion that the respondent is unfit to practise as a lawyer, as the respondent himself concedes. Grave dishonesty of the kind here established is clearly incompatible with fitness to practise as a lawyer. It is appropriate to make the declaration sought in order to meet the objectives of public accountability and deterrence.

Further, we are of the opinion that the respondent is likely to be unfit to practise as a lawyer for the indefinite future. The respondent is presently incarcerated. He has not put forward any suggested safeguards for future practice, although he has expressed remorse for his conduct. In all the circumstances, including the deliberate and intentional nature of the serious wrongdoing, it is appropriate that an order be made for the removal of the respondent’s name from the Roll.

The Council seeks an order, which the respondent does not oppose, that the respondent pay the Council’s costs. The Council points out that it was the respondent’s grave and criminal conduct that necessitated the commencement of these proceedings to seek orders to protect the public (referring in this regard to The Prothonotary v X at [72]).

As noted, the respondent does not oppose such an order, though he submits that he has at all times complied with his reporting obligations and responded to all requests in a prompt and timely manner and cooperated with the Council in respect of this application, a proposition from which the Council does not demur.

In our opinion, there is no reason to depart from the usual order as to costs in the present case. The need for the proceedings to be commenced was the respondent’s own serious misconduct and orders for the removal of his name from the Roll could not have been made simply by consent (nor could the declaratory relief). There is no suggestion that the proceedings were unnecessary.

For the above reasons, we make the following declaration and orders: