The Prothonotary of the Supreme Court of New South Wales v Dimitrious

1. [1]

   BEAZLEY P: I have had the advantage of reading in draft Meagher JA’s reasons in this matter. I agree with his Honour’s reasons and the orders he proposes.

2. [2]

   MEAGHER JA: The Prothonotary seeks an order that the respondent’s name be removed from the roll of persons admitted as lawyers that is maintained by the Court pursuant to s 32 of the Legal Profession Act 2004 (NSW) (now Legal Profession Uniform Law (NSW), s 22). The Prothonotary also seeks declarations that the respondent has been guilty of professional misconduct, that he is not of good fame and character and that he is not a fit and proper person to remain on that roll. The respondent consents to all of that relief, and to a costs order against him.

3. [3]

   The application to remove the respondent’s name from the roll is made to this Court in the exercise of its inherent jurisdiction in connection with the discipline and control of persons admitted to the legal profession in New South Wales. As this Court observed in the Council of the New South Wales Bar Association v Franklin (No 2) [2014] NSWCA 428 at [16], that jurisdiction is protective and directed to maintaining and encouraging appropriately high standards of professional behaviour amongst legal practitioners.

4. [4]

   Where an order for removal is sought the question for the Court is whether at the time of the hearing the lawyer is shown not to be a fit and proper person to remain on the roll. The related question as to whether the practitioner is of good fame and character is also to be addressed at that time: Ex parte Tziniolis; re The Medical Practitioners Act (1966) 67 SR (NSW) 448 at 475 (per Holmes JA). In this case, notwithstanding that the orders sought by the Prothonotary are consented to, it remains necessary for the Court to satisfy itself that it is appropriate to make the orders and declarations sought. The cases supporting that proposition are referred to by McColl JA in Prothonotary of the Supreme Court of New South Wales v Livanes [2012] NSWCA 325 at [27].

Background

1. [5]

   In February 1993 the respondent was admitted to the roll of legal practitioners in accordance with s 4 of the Legal Profession Act 1987 (NSW). He held a practising certificate issued by the Law Society of New South Wales continuously from 5 January 1994 to 27 January 2011. On that day the Council of the Law Society resolved to suspend that practising certificate with immediate effect: Legal Profession Act 2004 (NSW), s 548.

2. [6]

   Between October 2006 and 13 May 2007 the respondent carried on legal practice under the name “James Dimitrious Solicitor & Attorney”. Thereafter until 27 January 2011 he was the sole principal of the law practice known as “James Lawyers Solicitors & Attorneys” conducted from an office at 317-319 Homer Street, Earlwood.

The circumstances leading to the application to remove

1. [7]

   Under s 274 of the Legal Profession Act 2004 the respondent’s law practice was required at least once in each financial year to have its trust records externally examined. The external examiner’s report for the period ending 31 March 2010 for “James Lawyers Solicitors & Attorneys” disclosed a number of breaches of the Legal Profession Regulation 2005 (NSW). As a result an investigation was conducted under Pt 3.1, Div 3 and on 21 January 2011 the investigator reported that there was a deficiency of trust money in the practice’s general trust account.

2. [8]

   On 27 January 2011 the Council of the Law Society appointed a manager for the practice. The effect of that appointment included that the respondent was prohibited from participating in the affairs of the practice, except under the direct supervision of the manager: Legal Profession Act 2004, s 625.

3. [9]

   A few days later, on the application of the Law Society under s 630, a receiver for the law practice was appointed by the Supreme Court. The Supreme Court order and notice of the appointment were served on the respondent on 31 January 2011. The receiver undertook a further investigation and compiled a report dated 16 May 2011. That report was not in evidence. However, other evidence indicates that its findings included that money had been misappropriated from 10 clients of the practice; and that between 1 December 2009 and 30 November 2010 at least $356,000 had been transferred from the general trust account to personal accounts of the respondent.

4. [10]

   Further investigations revealed that between 28 July 2008 and 23 January 2011, $919,500 had been transferred from the general trust account to the respondent. Of that amount, $849,000 was not refunded to the trust account. After taking into account further claims made by former clients of the respondent, the total deficiency in clients’ funds which was the subject of claim on the Fidelity Fund (see Pt 3.4 of the Act) was $1,086,209 (before interest).

5. [11]

   The receiver commenced proceedings against the respondent to recover those funds. Eventually, properties owned either jointly with his parents or separately by the respondent were sold and $1,094,192 paid to the Fidelity Fund.

The criminal proceedings against the respondent

1. [12]

   Sixteen charges were brought in relation to the respondent’s dealings with nine clients of the practice. Those charges were with respect to conduct occurring between 13 March 2008 and 22 February 2011. That last date, notably, is after the Law Society appointed a manager to the respondent’s practice, after a receiver had been appointed by the Court, and after the respondent had been formally notified of those appointments.

2. [13]

   On 20 February 2013 the respondent pleaded guilty to each of those charges. The offences are listed below and, with the exception of the offence numbered 16, are in chronological order by reference to each of nine clients whose funds were misappropriated. The descriptions in square brackets have been added to assist in an understanding of the nature of the relevant conduct. They are taken from facts admitted by the respondent for the purpose of this proceeding:

3. [14]

   It is apparent that during the relevant period from March 2008 to February 2011 the respondent used his clients’ funds for his own benefit. He did so by misapplying funds that should have been paid into the practice trust account and by withdrawing money from that trust account other than in accordance with the directions of the person on whose behalf it was held. That conduct involved breaches of ss 254 or 255 of the Legal Profession Act 2004. He also prepared false documents and trust records to conceal his dishonesty and the discrepancies in the trust account. That conduct, as the respondent conceded to the psychiatrist qualified to express an opinion about his depressive illness, was motivated by self-interest. The psychiatrist’s report recorded:

4. [15]

   It is also significant that the conduct was not discovered as a result of any self-reporting on the part of the respondent. The circumstances in which it was discovered were also the subject of an observation in that psychiatrist’s report:

The sentencing proceedings

1. [16]

   Following his conviction of the offences described above on 20 February 2013, Local Court Magistrate Schurr sentenced Mr Dimitrious to a total sentence of 2 years and 6 months imprisonment to commence on 20 February 2013, with a non-parole period of 2 years expiring on 19 February 2015. (Appeal proceedings brought by Mr Dimitrious in respect of those convictions were dismissed and the above sentence confirmed. As a result of his having been on bail pending the determination of those proceedings, Mr Dimitrious is not eligible for release on parole until 8 April 2016.)

2. [17]

   In her remarks on sentence, the learned Magistrate made the following findings, which are not disputed:

3. [18]

   In relation to the offence numbered 15 as referred to above, the learned Magistrate recorded:

Not a fit and proper person to remain on the roll

1. [19]

   The Prothonotary relies upon the fact of these convictions and sentences and the conduct underlying them as sufficient to justify a conclusion that Mr Dimitrious is not a fit and proper person to remain on the roll of lawyers. That submission is not contested and must be accepted.

2. [20]

   Over a period of almost three years the respondent misappropriated clients’ funds and sought to conceal that conduct by the creation of false documents and accounts. His doing so was careful, planned, not isolated and no doubt targeted clients who were least likely to discover what was going on. That conduct only came to an end when a junior solicitor in the practice notified the Law Society of a shortfall in the general trust account.

3. [21]

   Legal practitioners are expected to act and must act with scrupulous honesty when discharging their obligations generally, and specifically with respect to the receipt and payment of monies on behalf of clients. There is an unqualified expectation that they adhere to those standards. The position was stated plainly by Ipp JA in Barwick v Council of the Law Society of New South Wales [2004] NSWCA 32; Aust Torts Reports 81-730 at [118]:

4. [22]

   The respondent’s conduct was inconsistent with his possessing qualities of honesty and integrity and a willingness to comply with the law. It also reveals a preparedness to prefer and pursue self-interest and financial gain at the expense of those qualities, which is incompatible with the standards and behaviour required of a legal practitioner. In these respects Mr Dimitrious’ conduct reflects adversely on his character and, accordingly, on his fitness to remain on the roll.

5. [23]

   The fact of his conviction of the various offences also involves a loss by him of the standing, before the Court and public, which must belong to those entrusted with the privileges, duties and responsibilities of a member of the legal profession. In that respect the fact of his conviction and the sentence imposed reflect adversely on his fame and, for that reason, also on his fitness to remain on the roll.

6. [24]

   The respondent’s misconduct was engaged in directly in the course of his practice. It was plainly “professional misconduct” as that expression is used in s 497(1) of the Legal Profession Act 2004, and more relevantly in a case where the Court is exercising its inherent jurisdiction, was conduct contrary to that expected of members of a profession closely involved in the due administration of justice.

7. [25]

   It remains to be considered whether the respondent is presently not a fit and proper person. His conduct occurred during a period ending more than four years ago. Reference was made in the course of submissions to matters that were relied on in mitigation of his offending. They included his depressive illness and the fact that a close senior colleague and mentor became seriously ill and subsequently died during the period of offending. It was also pointed out that the respondent had co-operated with the Law Society investigators and, through the sale of his properties, made full reparation of the monies that had been misappropriated. This last submission must, however, be considered in light of the offence committed in February 2011 which, as the learned Magistrate found, was directed to misleading the Law Society investigators by limiting the appearance of the extent of his criminality after supervision of his practice had begun.

8. [26]

   However, none of these matters is relied on in support of a submission that the respondent has reformed his character to such an extent that he is presently a fit and proper person to remain on the roll. Specifically, it is accepted that his criminal and other misconduct still speaks as to his present character and fitness to practise. Nor could it be suggested otherwise when the respondent, because of his circumstances, is not able to say that by his conduct over a number of years since his offending he has demonstrated that he is in relevant respects a “different man”: see Health Care Complaints Commission v Litchfield (1997) 41 NSWLR 630 at 637 (approving what was said earlier by Walsh JA in Ex parte Tziniolis at 460-461).

Proposed orders and declarations

1. [27]

   It is appropriate that this Court makes declarations as to the respondent having engaged in professional misconduct; as to his not presently being of good fame and character; and as to his not being a fit and proper person to remain on the roll. The fact of such declaratory relief, as was said in A Solicitor v Council of the Law Society of New South Wales [2004] HCA 1; 216 CLR 253 at [15], may be of importance for the information of others and relevant to future proceedings for his re-admission as a lawyer.

2. [28]

   By way of summary, the respondent has been guilty of serious professional misconduct involving gross dishonesty. That conduct reveals deficiencies of character which demonstrate a present unfitness to practise. The fact that he engaged in that conduct and the fact of the ensuing convictions also reflect on the respondent’s standing, general reputation and fame and for that reason also make him unfit to practise.

3. [29]

   That being the position the public interest is addressed by the Court making the following declaration and orders which I propose be made:

4. [30]

   LEEMING JA: I agree with Meagher JA.