The Law Society of New South Wales v Cotsicos [2008] NSWADT 354 (8 October 2008)

Last Updated: 3 June 2009

NEW SOUTH WALES ADMINISTRATIVE DECISIONS TRIBUNAL

CITATION:
The Law Society of New South Wales v Cotsicos [2008] NSWADT 354


DIVISION:
LEGAL SERVICES DIVISION

PARTIES:
APPLICANT
The Council of the Law Society of New South Wales

RESPONDENT
Philip Arthur Cotsicos



FILE NUMBERS:
082013

HEARING DATES:
8 October 2008

SUBMISSIONS CLOSED:
8 October 2008




EX TEMPORE DATE:
8 October 2008

BEFORE:
Brennan J - Judicial MemberRiordan M - Judicial MemberTingle J - Non-Judicial Member





LEGISLATION CITED:
Legal Profession Act 2004

CASES CITED:
Allinson v General Council of Medical Education and Registration [1894] QBD 750
Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336
Kennedy v The Council of the Incorporated Law Institute of New South Wales (1940) 13 ALJR 563

TEXTS CITED:


APPLICATION:
Professional Misconduct, Misappropriation, Forgery and Falsification of documents

MATTER FOR DECISION:



REPRESENTATION:
APPLICANT
L Pierotti, solicitor
RESPONDENT
In person


ORDERS:
1.That the name of Philip Arthur Cotsicos be removed from the Roll
2.That the said Philip Arthur Cotsicos pay the costs of the Law Society agreed in the sum of $5,950.00.


Reasons for Decision:

REASONS FOR DECISION

1 On 6 June 2008 the Council of the Law Society of New South Wales ("the Society") filed an Application pursuant to S551 of the Legal Profession Act 2004 ("LPA") against Philip Arthur Cotsicos ("the Solicitor"). The Society alleged that the Solicitor while practising as a Solicitor was guilty of professional misconduct as set out in detail and particularised in the Application.

2 The Application was based on five separate complaints as follows:

A. Complaint made by the Council of the Law Society on 21 July 2005:

(a)The Solicitor misappropriated Trust monies; and

(b)The Solicitor misappropriated monies payable to his employer.

B. Complaint made by Maria Girdler on 22 August 2005:

(a) Misappropriation.

C. Complaint made by the Professional Conduct Committee on 6 April 2006:

(a)The Solicitor forged the signature of Mary Therese King;

(b)The Solicitor fabricated documents; and

(c ) The Solicitor misappropriated monies.

D. Complaint made by the Professional Conduct Committee on 15 February 2007:

(a) Misappropriation;

E.Complaint made by the Professional Conduct Committee on 20 September 2007;

(a) Misappropriation.

3 The Society sought that the Solicitor’s name be removed from the Roll, an order for costs and such other order as to the Tribunal seem fit.

4 No reply or Affidavit material was filed by or on behalf of the Solicitor. The Application was listed for hearing on 8 October 2008 on which date the Solicitor appeared in person. The Solicitor did not give evidence, he agreed with the submissions of the Society in seeking that his name be removed from the Roll and he also indicated his agreement that the costs claimed by the Society were agreed in the sum of $5,950.00. At the conclusion of the hearing the Solicitor said in relation to his conduct:

"It is disgraceful. I am ashamed of it....... I can only fall on my sword and apologise to clients and friends."

5 At the conclusion of the hearing on 8 October 2008 both the Society and the Solicitor requested the Tribunal to make the Orders sought on that day. The Tribunal found that the evidence presented to it established misappropriation by the Solicitor on many occasions together with the acts of forgery and fabrication of documents alleged against the Solicitor. The facts alleged by the Society were not disputed and the Solicitor consented to the Orders sought. The Tribunal found that it was satisfied that professional misconduct had been established and it was proper in all the circumstances that the name of the Solicitor be removed from the Roll and that he pay the costs of the Society which had been agreed in the sum of $5,950.00. The Tribunal indicated that it would publish its reasons for this Decision in due course.

6 The Society relied upon four Affidavits these being as follows, with the date of swearing shown in brackets after the name of the deponent:

(a) R. J. Collins (4 June 2008);

(b) K. M. Sinclair (7 May 2008);

(c) G. T. Napper (23 April 2008);

(d) T. J. K. Doust (28 May 2008).

7 The Affidavits were all admitted without objection and none of the deponents were called for cross-examination. Mr Doust is a Director of the incorporated legal firm which at the relevant times employed the Solicitor. In his Affidavit Mr Doust gave evidence of a Trust Account inspection having been completed on 14 July 2005 by Mr Napper who had provided a report which required independent confirmation from the client that thirteen payments from the Trust Account in relation to the Estate of King were in order.

8 Following the Trust Account inspection, Mr Doust interviewed the Solicitor. In that conversation the Solicitor admitted that all the cheques referred to by the Trust Account Inspector related to money taken by him from moneys held in the firm’s Trust account for the client. He also admitted promptly that he had taken money from the Trust Account in another matter of Skinner. The Solicitor indicated at that stage that he did not think there were any other matters in this category. The Solicitor’s employment was then terminated and he was escorted from the premises.

9 On the following day, Saturday 16 July 2005, Mr Doust whilst conducting a review of all Trust Account ledgers relating to files under the authorship of the Solicitor had a telephone conversation with the Solicitor in which the Solicitor admitted that he had given money belonging to Skinner to another client, Diane Clancy, for her matter. The Solicitor also admitted in that conversation that two cheques were drawn on moneys held for the Traino matter to pay his own personal accounts. The Solicitor denied at that stage that he had taken any money out of the firm’s Office Account and said that he could not think of any other client money that he had taken.

10 Later in the same day Mr Doust had a further telephone conversation with the Solicitor which is detailed in Paragraph 11 of his Affidavit. In that conversation the Solicitor also admitted three misappropriations in the Skinner Estate and two misappropriations in the matter of Traino, one in the matter of Girdler and another in the matter of Uddin.

11 Mr Doust further deposed to a conversation on a visit by the Solicitor to Mr Doust’s home on the following day, Sunday, 17 July 2005. In the course of that conversation the Solicitor disclosed transactions where he had received cash in payment of fees due to the firm where he had kept the cash and not accounted for those monies. The Solicitor informed Mr Doust that commonly he then raised a bill to the client on which the Solicitor then made instalment payments in respect of the outstanding accounts over time representing that the instalments were made by the client.

12 Also annexed to Mr Doust’s Affidavit was a statement from the Executrix of the King Estate in which she stated that the signatures on documents produced to her purporting to acknowledge receipt of payments from the firm were not her signatures and that the file notes purporting to be directions from her in relation to the drawing of cheques did not represent any instructions given by her.

13 Mr Doust’s Affidavit concluded by deposing to the fact that the Solicitor sold his interest in the home which he owned with his sister and from the proceeds had reimbursed the firm for the amount in cash due to the firm and taken by the Solicitor , the moneys taken by the Solicitor from the firm’s Trust Account together with a sum in satisfaction of money and costs identified as arising from the Solicitor’s behaviour.

14 The Affidavit of Mr Napper verified his report and attached numerous documents including cheques, ledger pages, directions, receipts and requisition forms which provided the documentation required to establish the specific acts involved in the allegations against the Solicitor. The Affidavit also annexed a transcript of an interview between the Solicitor and Messrs Collins and Napper of the Law Society at the Society’s premises on 19 July 2005. In that interview, the Solicitor made admissions in relation to a large number of acts by him involving what the Tribunal has found constituted professional misconduct. These included:

(a)Payment of monies held in the Trust Account in the estate of King of $1245.00 to St George Bank in payment of a personal loan of the Solicitor being monies provided without authority and taken and applied for his own purposes;

(b)Fabrication by the Solicitor of a file note which appears to have been made on about 26 February 2003 which falsely purported to record the instructions from Ms King to pay a sum of $1245.00 to St George Bank.

(c)Payment out of funds held by the firm for the Estate of King of monies to the Proprietors of Strata Plan 50774 and Westpac Banking Corporation being payments applied for the Solicitor’s own purposes without authority.

(d)Payment of monies out of the Trust Account held for the Estate of King to F. Hanna and L. Threlfall being monies paid to or for the benefit of other clients of the firm employing the Solicitor where such other clients had no connection with the King Estate and were paid out of the Estate moneys to make up for deficiencies in other matters being handled by the Solicitor.

(e)Concocting documentation in the form of false file notes, purported acknowledgements of payments and the forgery of a signature on 28 February which corresponds with the conduct particularised as having occurred on that date in 2003 in relation to Ms King and the Estate of King.

(f)Drawing of cheques on the ledger for client Bechara in favour of another client where the payee had no relationship to the Bechara matter. The cheques were related to a Victims’ Compensation Matter which had not been lodged so monies were taken by the Solicitor from funds held in the Bechara matter to cover the Solicitor’s failure to lodge the claim..

(g)Payment in the matter of Uddin of the sum of about $760.00 to St George without the client’s authority being in payment of a personal loan due by the Solicitor.

(h)Payment of a similar nature from the Estate of Girdler of the sum of $1,575.75 to St George Bank without the client’s authority being a payment on the Solicitor’s personal loan from the Bank.

(i)Two payments out of the monies held in the Trust Account for Estate A. Torrisi of monies for personal expenses of the Solicitor to the Roads & Traffic Authority and to NRMA for insurance. In relation to the payments to unrelated persons, the Solicitor admitted that one recorded as witnesses’ expenses was for damages in an accident to the recipient’s vehicle when the Solicitor’s car was uninsured and the other to a client, Clancy, to overcome problems the Solicitor had with moneys payable in relation to the Clancy file.

(j)Payment out of monies paid into the firm’s Trust Account on account of costs and disbursements by a client Jeng of monies firstly to an unrelated client in respect of reimbursement of some medical expenses in another matter and then two further payments in respect of a personal loan owing by the Solicitor.

(k)Receiving and retaining cash from clients on account of costs and fees and retaining the same rather than paying the money into the firm’s Trust Account or General Account as appropriate on what was agreed might have been more than ten occasions. It is not clear from the transcript of that interview as to whether the number ten referred to moneys paid by a client Watton or moneys paid by or on behalf of more than ten different clients. Ultimately the Solicitor accepted that he had received and retained for himself rather than pay to the firm cash monies paid to him at Court or similar cash payments otherwise received in relation to Court appearances from eighteen clients. The total amount of these cash payments received by the Solicitor and retained by him amounted to $45,596.00 as detailed in Particular J to the Application.

15 The Affidavit of Mr Sinclair related principally to the interview Mr Sinclair had with the Solicitor on Saturday 1 September 2007 at the Law Society’s office. The affidavit details the admissions made by the Solicitor which establish the misappropriation in relation to the eighteen clients referred to in Particular J and is supported by the appropriate documentation including copies of many ledger pages, invoices and correspondence which are annexed to the affidavit. Mr Sinclair’s Affidavit has an Annexure B which is identified in the body of the Affidavit as constituting a copy of a five page document provided to Mr Sinclair by the Solicitor at the commencement of their conversation on Saturday, 1 September 2007. The Affidavit quotes the Solicitor’s statement in handing over these five pages as follows:

"These schedules were prepared by my Solicitor, Richard Gulley, and given to my former employer Mr Doust to work out how much I had to repay him."

16 It has been necessary for the Tribunal to examine a number of documents admitted into evidence to establish to its satisfaction the misappropriation alleged against the Solicitor. The material in relation to the clients Fulton and Wilson are indicative of the evidence in the Sinclair affidavit accepted by the Tribunal.

17 The Schedule contains admissions in relation to many matters but it is perhaps convenient here to quote entries in relation to the client Fulton which is one of the matters identified in the particulars to Complaint D. In the Schedule the matter of Fulton shows a payment received of $7,786.50 followed by the entry:

"These monies applied to the Hamilton file and those funds disbursed via the Hamilton file in payment of debts."

The Schedule also indicates that cash has been repaid to the Solicitor’s employer of $2,350.00 leaving a balance owing to the former employer of $5,436.50 in relation to that one matter. The transaction report and invoice also form part of the annexures to Mr Sinclair’s Affidavit.

18 Annexure "CC" at page 307 of Mr Sinclair’s Affidavit is a letter from the Society to the Solicitor dated 4 September 2007. Paragraph 1 of that letter is in the following terms:

"You provided two documents headed ‘Schedule A’ and ‘Schedule B’, being 5 pages in length. You stated these documents were prepared by you with the assistance of Richard Gulley for the purpose of calculating the amount you owed (and in fact ‘repaid’) your former employer, Matthews Folbigg. The document headed ‘Schedule A’ you stated in effect identifies the Trust monies of Matthews Folbigg improperly expended by you and ‘Schedule B’ relates to your receipt, partial ‘reimbursement’ and then the balance due of your then employer’s office account moneys."

Subsequently the letter of 4 September 2007 continues:

"The information in that draft in relation to Society complaint concerning Wilson Jeanette ats Commissioner of Taxation in ‘File 35209(2)’ is similarly based on information previously available to the Society and is understood to relate to the St George Bank payment in matter 33661 and the sum of $825.00 referred to on page 2 of your document ‘Schedule A’."

On page 16 of Mr Sinclair’s Affidavit the item in relation to the Wilson file is listed as:

"Matter number 33661 St George Bank $825.00"

19 The Affidavit of Raymond John Collins with annexures comprised a total of 442 pages. The first ten pages of the document comprises the Affidavit proper and details the investigation of complaints, correspondence with the Solicitor’s former employers and the identification of the large number of documents annexed.

20 The affidavit material relied upon by the Society including the annexed supporting documentation was all admitted into evidence by consent and was not disputed by the Solicitor. The Tribunal accepts the evidence submitted by the Society. The documentary evidence and the admissions made by the Solicitor leave the Tribunal satisfied beyond the required "reasonable satisfaction" test in relation to the matters required to be proved to establish the complaints as described by Dixon J (as he then was) in Briginshaw v Briginshaw (1938) 60CLR 336 at 362.

21 The Tribunal finds that the particular conduct established supporting the various complaints of misappropriation, the forging of the signature of Mary King and the fabrication of documents clearly indicate a cold and calculated course of action, fraud and deception by the Solicitor. The Solicitor, no doubt inevitably, has acknowledged and the Tribunal finds that his conduct amounts to professional misconduct. The Tribunal finds that his misconduct as so established satisfies the frequently quoted statement of Lopez LJ in Allinson v General Council of Medical Education and Registration [1894] QBD 750 at 763 where his Lordship said:

"If it is shewn that a medical man, in the pursuit of his profession, has done something with regard to it which would be reasonably regarded as disgraceful or dishonourable by his professional brethren of good repute and competency, then it is open to the General Medical Council to say that he has been guilty of ‘infamous conduct’ in a professional respect."

This test has regularly been applied in the consideration of whether facts establish professional misconduct in relation to a lawyer in the practice of his profession.

22 In Kennedy v The Council of the Incorporated Law Institute of New South Wales (1940)13ALJR 563 at 563 provided a further description of misconduct by Rich J. which has long been adopted and applied in matters of this nature. His Honour said:

"A charge of misconduct as relating to a solicitor need not fall within any legal definition of wrong doing. It need not amount to an offence under the law. It was enough that it amounted to grave impropriety affecting his professional character and was indicative of a failure either to understand or to practise the precepts of honesty or fair dealing in relation to the courts, his clients or the public. The particular transaction the subject of the charge must be judged as a whole and the conclusion whether it betokened unfitness to be held out by the court as a member of a profession in whom confidence could be placed, or on the other hand, although an lapse of propriety, was not inconsistent with general professional fitness and habitual adherence to moral standards, was to be reached by a general survey of the whole transaction."

23 The Tribunal finds that the misconduct that has been established in this matter is gross and totally deplorable and that it satisfies the tests of professional misconduct detailed in Allinson and Kennedy and applied many times in subsequent years. Accordingly, the Tribunal finds that the misconduct established against the Solicitor amounts to professional misconduct and further finds that at the time the conduct occurred the Solicitor was not fit to practise.

24 The determination of the appropriate Order to be made in this matter in consequence of the findings of the Tribunal are required to protect the public rather than punish the Solicitor. The evidence is clear that the Solicitor has repaid, following the sale of his home, the monies that were misappropriated. His personal liability to make those payments on the evidence was perfectly clear and amounted to a legal obligation. There was no evidence before the Tribunal to support any suggestion that the Solicitor is now fit to practise and the Tribunal is satisfied that the proper, and indeed the only, Order that it can make in relation to this issue is that the Solicitor’s name should be removed from the Roll and the Tribunal finds accordingly. In addition, the Tribunal confirms and orders that the Solicitor pay the costs of the Society agreed in the sum of $5,950.00.