Law Society of NSW v Carbonne [2009] NSWADT 20 (30 January 2009)

Last Updated: 6 February 2009

NEW SOUTH WALES ADMINISTRATIVE DECISIONS TRIBUNAL

CITATION:
Law Society of NSW v Carbonne [2009] NSWADT 20


DIVISION:
LEGAL SERVICES DIVISION

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

RESPONDENT
Domenic Carbone



FILE NUMBERS:
072024

HEARING DATES:
22 May 2008, 23 May 2008 & 6 June 2008

SUBMISSIONS CLOSED:
1 August 2008



DATE OF DECISION:
30 January 2009

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





LEGISLATION CITED:
Legal Profession Act 1987
Legal Profession Act 2004

CASES CITED:
Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336
Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298

TEXTS CITED:


APPLICATION:
Solicitor - professional misconduct, unsatisfactory professional conduct

MATTER FOR DECISION:



REPRESENTATION:
APPLICANT
P Boyd , solicitor
RESPONDENT
T Williams, solicitor


ORDERS:
1 The Tribunal finds the Solicitor guilty of one allegation of professional misconduct namely that he without reasonable excuse, failed to comply with a Council requirement under s.152 of the Legal Profession Act 1987
2.The Tribunal finds the Solicitor guilty of two counts of unsatisfactory professional conduct in that he failed to communicate and he failed to transfer the file as detailed in the application
3. The Tribunal dismisses the remaining four allegations of professional misconduct and the remaining allegation of unsatisfactory professional conduct
4.The Tribunal stands the matter over to a date to be fixed by the Registrar for submissions by the parties on the appropriate orders to be made in consequence of these findings


Reasons for Decision:

REASONS FOR DECISION

1.On 29 June 2007 the Council of the Law Society of New South Wales ("the Society") filed an application pursuant to section 551 of the Legal Profession Act 2004 ("LPA") against Domenic Carbone ("the Solicitor"). The Society alleged that the Solicitor while practising as a Solicitor, was guilty of professional misconduct and unsatisfactory professional conduct as set out in the following allegations which are in the terms as amended at the hearing before the Tribunal:

Professional Misconduct

(a)The solicitor breached an undertaking

(b)The solicitor wilfully breached S. 61 of the Legal Profession Act, 1987

(c)The solicitor failed to account for the balance of funds held in trust

(d)The solicitor improperly asserted a lien over retained funds

(e)The solicitor, without reasonable excuse, failed to comply with a Council requirement under S.152 of the Legal Profession Act, 1987

Unsatisfactory professional conduct

(a)The solicitor failed to communicate

(b)The solicitor failed to transfer the file

(c)The solicitor delayed in releasing funds, in informing Auspower that he proposed to maintain a lien and did not until 28 April 2005 provide alleged accounts.

Particulars of Complaint - Professional Misconduct

Ground 1 - Breach of undertaking

Particulars See Particulars 20, 26, 38, 54 and 74

Ground 2 -- Wilful breach of S.61

Particulars: See Particulars 26, 34, 37, 38, 54 and 74.

Ground 3 -- Failure to account for the balance of funds held in trust

Particulars: See Particulars 25-29, 37, 38, 54 and 74

Ground 4 -- Improperly asserting a lien over retained funds

Particulars: See Particulars 37, 38, 47, 54, 55 and 74

Ground 5--Failure, without reasonable excuse to comply with a S.152 Notice

Particulars: See Particulars 77-79, 81 and 84

Unsatisfactory Professional Conduct

Ground 1- Failure to communicate

Particulars: See Particulars 5-10

Ground 2 -- Failure to transfer file

Particulars: See Particulars 5-17, 32, 43 and 44

Ground 3(i) - Delay in releasing funds

Particulars: See Particulars 10, 38, 47, 54 and 74

Ground 3(ii) - Delay in informing Auspower that the solicitor proposed to maintain a lien

Particulars: See Particulars 6-10, 37 and 54

Ground 3(iii)- Delay until 28 April 2005 in providing alleged accounts

Particulars: See Particulars 40, 47 and 54

Particulars re Domenic Carbonne

In these particulars:

"the solicitor" means Domenic Carbone

"KS" means Kemp Strang on behalf of Auspower Hydraulics Pty Limited the complainant

"Auspower" means Auspower Hydraulics Pty Limited

"Hydraulink" means Hydraulink Australia Limited

"Lucas" means Paul Lucas of Coleman & Greig Solicitors for Hydraulink

"Cavasinni" means Frank Cavasinni

Sale Deed between Auspower as Vendor and Hydraulink as Purchaser

1 On or about 25 July 2001 Auspower of which Cavasinni and three others were

Directors as Vendor sold a business to Hydraulink as Purchaser. The solicitor acted

for Auspower and Lucas acted for Hydraulink.

2 The Deed of Sale of Business provided, inter alia, as follows:-

Definitions and Interpretation

Definitions

"Purchaser’s solicitors" means Messrs. Coleman & Greig of 100 George Street Parramatta or such other solicitors as the Vendor shall notify in writing to the Purchaser for the purposes of this Deed.

"Vendor’s solicitors" means Messrs. Carbone & Associates of Suite 1, 64-66 Smart Street, Fairfield or such other solicitors as the Vendor shall notify in writing to the Purchaser for the purposes of this Deed.

Consideration

Payment of Purchase Price

The Purchase Price will be paid by the Purchaser as follows:

the sum of $300,000 or the determined final amount in accordance with the formula in clause 3.2 must be paid to the Vendor’s Solicitors trust account to be held by the Vendor’s Solicitors as stakeholder and to be accounted for to the parties 14 days after receipt of the audit report from Chan and Naylor. If within that period of 14 days, the Vendor or the Vendor’s Solicitors give notice to the Purchaser’s Solicitors that they require their own independent audit of the accounts of the Purchaser, then the Vendor’s Solicitors must retain the money in their trust account until agreement is reached between the parties as to the adjustment to be made to the purchase price. If no such notice is received by the Purchaser’s Solicitors within the period of 14 days, then the Vendor’s Solicitors will be authorised to account to the parties in accordance with the audit report from Chan and Naylor.

The parties authorise the Vendor’s Solicitors to invest the money as Controlled Money in an interest bearing account with a Bank in New South Wales. The Vendor’s Solicitors are authorised to account for interest received by them on the investment of the money, less any charges, to the parties in the same proportion as the principal sum, is paid to the parties.

3 In July 2001 pursuant to the Sale Deed Hydraulink deposited the sum of $300,000 into the trust account of the solicitor.

4 On or about 25 November 2002 Auspower engaged KS to act on its behalf.

5 On 25 November 2002 KS sent a letter to the solicitor with an Authority signed by the Directors (4) of Auspower requesting the solicitor to forward all documents, files and other relevant material relating to the sale to Hydraulink to KS.

6 On 5 December 2002 KS sent another letter to the solicitor advising that its letter of 25 November 2002 had not been replied to.

7 On 16 June 2003 Cavasinni sent a letter to the solicitor requesting advice with respect to the file for Auspower and the sum of $300,000.

8 On 2 July 2003 and 1 August 2003 Cavasinni sent further letters to the solicitor with respect to the files and the transfer of the funds held in a term deposit.

9 On 19 August 2003 KS sent a letter to the solicitor advising that its letters of 25 November 2002 and 5 December 2002 had not been replied to and requesting copies of "all trust account ledgers and/or statements relating to such moneys".

10 On 8 September 2003 KS sent a letter to the solicitor which said in part:-

Accordingly this matter is now urgent as our client requires that the agreement be completed and the moneys released which should have occurred more than 12 months ago.

We request one final time that you forward to us:

1. The file relating to the sale of the business;

2. Your trust account cheque made payable to this firm in the sum of $300,000.00; and

3. Any other documents or moneys in your possession that relate to this client

11 On 8 September 2003 the solicitor sent a letter to KS which said in part:-

As to your request for a copy of the file would you have your client post off a cheque in the sum of $1500 to cover photocopy expenses and undertake to meet any shortfall. Photocopies will be charged at $1.00 per page. Upon receipt we shall photocopy the files and forward same to your office.

12 On 9 September 2003 KS sent a letter to the solicitor advising, inter alia, that unless the file relating to the sale of the business was received by 11 September 2003 the Legal Services Commissioner would be notified.

13 On 10 September 2003 the solicitor sent a letter to KS which said in part:-

We have already indicated our preparedness to photocopy the files upon receipt of monies from your client. In relation to the $300,000.00 retention monies you will need to obtain consent of Mr P Lucas of Messrs Coleman & Greig in writing prior to any release.

14 On 10 September 2003 KS sent a letter to the solicitor advising, inter alia, that

"the file belongs to our client and your expense to copy it for your own records is your cost. Our client will not be forwarding any moneys to you for photocopying costs."

15 On 12 September 2003 Lucas sent a letter to KS indicating that his client the purchaser "does not consent to the transfer of those funds."

16 On 18 September 2003 KS sent a letter to the solicitor listing the previous letters forwarded to him and noting they had not received the files and other documents.

17 On 18 September 2003 the solicitor sent a letter to KS which said in part:-

we are content to provide copies of the files upon provision of monies for photocopy expenses.

You are aware of our obligations to maintain a copy of the files for a mandatory seven years. Contrary to your assertion of copies (sic) are required for your client.

We confirm we are ready to provide a copy of the file at your client’s expense.

18 On 30 June 2004 Lucas sent a facsimile transmission to Cavasinni attaching a letter from the Commonwealth Bank advising the term deposit in the sum of $327,632.68 would mature on 12 July 2004.

19 On 22 November 2004 KS sent a letter to the solicitor which said in part:-

We understand you are aware that the parties have agreed that the retention monies are to be released. A Deed of Release and the appropriate authorities have been finalised and the transaction will be completed in accordance with the Deed upon receipt of the

retention monies. To avoid any doubt, we confirm that our client authorises and instructs you to release the retention monies to our trust account in order for the transaction to be completed.

We note that our client has received no information from you regarding interest and withholding tax on the retention money.Please confirm the amount of interest accumulated on the retention monies, along with the withholding tax figure.

20 On 1 December 2004 Coleman & Greig sent a letter to KS enclosing an undertaking dated that day signed by the solicitor which said:-

I, Domenic Carbone of Carbone & Associates hereby undertake to account to Hydraulink Australia Pty Limited and Auspower Hydraulics Pty Limited in relation to retention monies held by me as stakeholder as follows;

1. $225,000.00 to Auspower Hydraulics Pty Limited

2. $75,000.00 to Hydraulink Australia Pty Limited

After the deduction of legal costs associated with administration and or distribution of funds from the interest monies, the balance is to be accounted for equally between Hydraulink Australia Pty Limited and Auspower Hydraulics Pty Limited.

21 On 9 December 2004 KS sent a letter to the solicitor noting that its letter of 22 November 2004 had not been replied to and requesting advice as to when the monies referred to in the undertaking would be released.

22 On 14 December 2004 the solicitor sent a letter to KS which said in part:-

As to details of release we are more than willing to discuss with your client when appropriate. The interest accrued has been disclosed to Coleman and Greig which has accumulated to the account and an agreement apparently reached between the parties.

23 On 20 December 2004 KS sent a letter to the solicitor which

said in part:-

As you will be aware, our client and Hydraulink

Australia Limited have made arrangements to exchange Deeds of Release on 22 December 2004.

Both parties are available to exchange at 11am at the offices of Coleman & Greig. We suggest that if you are unavailable to attend to hand over the retention monies at that time, you send a representative with bank cheques in favour of the parties.

Please feel free to contact us if you have any questions in relation to the above.

24 On 20 December 2004 KS sent a letter to the NSW Law Society (‘The Society") which said in part:-

Based on the above conduct of Mr Carbone, we are

of the view that we are obliged to report our concerns pursuant to Regulation 132 of the Legal Profession Regulation 2002.

25 On 21 December 2004 the solicitor sent a letter to KS which said in part:-

We confirm that your client should proceed to exchange the Deeds. That at least will finalize the matter between Auspower and Hydraulink.

Upon receipt of authorities we shall then proceed to

account to both parties as to their entitlements and

in due course disperse monies from our trust account.

26 On 24 December 2004 KS sent a letter to the solicitor enclosing a Deed of Release dated 21 December 2004 and an authority and direction to the solicitor also dated that day directing the solicitor to pay $225,000.00 to Auspower Hydraulics and $75,000 to Hydraulink Australia with accrued interest to be distributed equally.

27 On 19 January 2005 KS sent a letter to the solicitor which said in part:-

We note that you have failed to deposit our client’s

funds in accordance with the Deed and authority.

We require you to deposit our client’s funds into Kemp Strang’s trust account by the close of business on 21 January 2005. Our trust account details are as follows:

28 On 14 February 2005 Coleman & Greig sent a letter to Cavasinni advising that the solicitor had released Hydraulink’s share of the retention money as per the Deed.

29 On 14 February 2005 KS sent a letter to the solicitor drawing attention to outstanding issues and advising a complaint would

be lodged unless by the following day its client’s funds were deposited into the firm’s trust account details being provided.

The first complaint from KS (Breach of undertaking, Wilful breach of S61. failure to communicate and failure to transfer file)

30 On 4 March 2005 KS lodged a complaint with the Office of the Legal Services Commissioner ("the Commissioner").

31 On 14 March 2005 the Commissioner forwarded the complaint to the Society to investigate.

32 On 21 March 2005 the Society forwarded the complaint to the solicitor.

33 On 18 March 2005 the Commissioner forwarded to the Society a copy of a letter from KS dated 14 March 2005 which said in part:-

We have been informed by our client’s directors that you have spoken to one of our client’s directors and advised him that you will not hand over the moneys held by you on our client’s behalf until you speak to another of our client’s directors Mr Frank Cavasinni. We are further informed (sic) with you spoke with a Mr Pat Costa, Solicitor and asked Mr Costa to request that Mr Cavasinni speak to you personally.

34 On 5 April 2005 the Society forwarded a letter to the solicitor which said in part:-

I refer to our telephone conversation of 1 April 2005 and note your advice that you are maintaining a lien for costs in relation to the funds held on behalf of the complainant. I confirm my advice to you that that lien can only relate to the amount of costs claimed and that the balance should be remitted to the complainant forthwith.

Please ensure that your response to this complaint, incorporating a statement of your intentions in relation to the funds held is provided within 7 days of the date of this letter.

35 On 19 April 2005 the solicitor sent a letter to the Society advising that "we are in discussions which might lead to a resolution." The letter requested that KS not be informed.

36 On 21 April 2005 the Society sent a letter to the solicitor advising it could not accede to his request and insisting that a response to the complaint be provided.

37 On 28 April 2005 the solicitor sent a letter to the Society which said in part:-

We confirm that we hold funds in trust, the trust ledger is enclosed...

We confirm that Auspower Hydraulics Pty Ltd is indebted to the writer for legal fees...

In relation to Mr Cavasinni, the shareholder from whom Kemp Stang, seem to take their instructions from, we confirm that he is indebted to our firm for a vast number of matters.

Until such time as those fees are agreed and in the absence of any agreement, assessed then we maintain a lien over those funds that remain in our trust account.

In relation to the matters raised by Kemp Strang we advise as follows:

3. The undertaking provided to both firms "is to account" not to release as asserted. The undertaking was specifically worded to ‘account’ as opposed to release funds as originally requested by Kemp Strang and they would be aware of our claim for a lien over those monies.

7. We can confirm that the lien for legal costs is maintained in the sum of $124,140.10. We have today transmitted a balance to Kemp Strang in the sum of $123,898.96 in favour of their trust account. A copy of the cheque and letter is enclosed.

The copy of the trust account ledger enclosed with the solicitor’s letter indicated that on 12 February 2005 the Solicitor paid Hydraulink $74,000 and on 22 February 2005 interest of $18,204.08.

38 On 28 April 2005 the solicitor sent a letter to KS which said in part:-

We enclose herewith our trust account ledger and trust account cheque in the sum of $123,898.96.

The balance of $124,140.10 is held pursuant to a lien for matters involving Auspower/Cavasinni.

39 On 3 May 2005 KS sent a letter to the solicitor which said in part:-

We acknowledge receipt of your trust account cheque in the sum of $123,898.96.

We note that despite the fact we initially requested the release of our client’s funds in December 2002, this is the first time you have claimed a lien over our client’s funds.

We further note that you claim that lien on the basis of monies allegedly owed to you in respect of "matters involving Auspower/Cavasinni". Please note that the retention monies being held by you were deposited by, and belong to Auspower and accordingly, you have no right to claim a lien over monies you say are owed by other entities or persons.

Despite your comments to the contrary, we are instructed that our clients are not in receipt of any documents, including accounts or invoices, which establish your alleged grounds to claim a lien. We are instructed that there are no outstanding accounts issued by your firm to our client.

40 On 27 May 2005 KS sent a letter to the Society (copy being sent to the solicitor) which said in part:-

We ... enclose the following:-

3. copy of documents entitled "Memorandum of Professional Costs and Disbursements" provided by Mr Carbone to Mr Popovic of Auspower Hydraulics Pty Limited on or about 28 April 2005.

The three Memoranda referred to totalled the sum of $7,950.00. The letter continued:

We confirm that we have not received a reply to our letter dated 3 May 2005 and that we have received instructions that the enclosed purported accounts provided by Mr Carbone to Mr Popovic were received by our client for the first time on or about 28 April 2005.

Mr Carbone did not claim any lien over our client’s share of the monies held by him (or issue any invoices) until after this matter was referred to the Legal Services Commissioner, despite the fact that we first sought release of those monies on 8 September 2003.

We further note that Mr Carbone’s purported accounts to total $7,950.00 yet the lien he claims is for $124,140.10. In any event, we confirm that our client denies owing any fees to Mr Carbone whatsoever and denies that Mr Carbone has any right to claim a lien with respect to the monies held by him.

The matters raised by KS in its letter of 27 May 2005 were considered by the Society. On 31 May 2005 the Society sent a letter to KS seeking confirmation that additional complaints are intended and if so they would be referred to the Commissioner for his decision as to whether the Society would be directed to investigate such complaints.

The second complaint by KS (failure to account for the balance of funds held in trust improperly asserting a lien over retained funds,delay)

41 On 15 June 2005 KS forwarded to the Society a further letter of complaint with respect to the solicitor. In accordance with usual practice the Society forwarded this to the Commissioner.

42 On 22 June 2005 the Commissioner forwarded the second complaint to the Society to investigate. File no 34612 was allocated to the complaint and by letter dated 21 July 2005 the Society forwarded it to the solicitor.

43 On 21 July 2005 the Society sent another letter to the solicitor which said in part:-

On reviewing my file I am unable to establish that you have responded to the complaint that you failed to release your file.

I am unable to find any mention in the correspondence passing between your firm and Messrs Kemp Strang any reference to a lien for outstanding costs. The client is not required to pay the cost of your making a copy for your own use or benefit.

44 On 18 August 2005 the Society sent a letter to the solicitor which said in part:-

I have recently spoken to Ms King of Messrs Kemp Strang. She advises me that she has not to date received your file. Please confirm that it has been forwarded within 7 days of the date of this letter.

45 On 25 August 2005 KS sent a letter to the Society which said in part (page 2):-

Our client and/or us have been requesting the release of our client’s funds from Mr Carbone for over 2 years. Other than the partial repayment made on or about 28 April 2005, our client has received no further monies from Mr Carbone. Given the seriousness of the conduct alleged and the length of time Mr Carbone has held our client’s funds for, we urge you to treat this complaint with expedition as required by section 154 of the Legal Profession Act.

46 On 1 September 2005 the Society forwarded a letter to the solicitor enclosing the letter from KS dated 25 August 2005. The Society’s letter also indicated that a report had been completed recommending the issue of a Notice pursuant to S.152 of the Legal Profession Act. The terms of the proposed Notice were set out.

47 On 2 September 2005 the solicitor sent by facsimile transmission an 8 page undated letter to the Society (in response to the second complaint forwarded to him on 21 July 2005) which said in part:-

b) Auspower has been informed through discussions with Michael Popovic and then Mark Popovic that the lien for outstanding costs needed to be resolved prior to the release of any monies.

In so far as Cavasinni is concerned he has at all times been aware of the fact that our firm has acted for him, his companies or Auspower in a large number of matters and costs remain outstanding as follows:

d) Mr Cavasinni has held copies of the accounts since 2001 or 2002.

The lien could not have been maintained prior to determination of the owner of the funds held in trust as between Auspower and Hydraulics (Coleman & Greig).

We have since had further discussions with Andrea King a copy of accounts will be remitted to her (copy of letter enclosed).

The letter to Ms King from KS dated 2 September 2005 indicated that in relation to 15 matters for Cavasinni and 3 matters for Auspower the sum due to the solicitor for costs was between $128,842.00 and $133,842.00.

Cavasinni is and remains the principal who issues instructions in Auspower. It is he who gives instructions to Kemp Strang -- not Messrs Popovic. Cavasinni is aware of responsible (sic) for accounts incurred acting on his instructions for Auspower, himself or Cavcorp.

In the event that costs cannot be the subject of any agreement within 14 days hereof, presuming this correspondence is relayed to Kemp Strang, then we shall submit the entirety of accounts for assessment.

That process will crystallise the quantum of costs.

The solicitor’s letter concluded-

Finally, we enclose herewith a copy of a facsimile received from Cavasinni on the 1st November 2001. This former client has an asset portfolio of approximately $100 million. He has been aware of the outstanding accounts to our firm since 2001 -2002. He has deliberately avoided payment of them and deliberately exerting pressure (sic) on the Society to secure a release of monies in order to avoid payment of costs. The costs outstanding are miniscule when compared to his ability to pay and he should not attract any sympathy whatsoever.

48 On 5 September 2005 the Society sent a letter to the solicitor which said in part:-

I feel that it is important that a very basic issue be resolved. That is, you have provided details of a number of accounts which are apparently outstanding to you by Mr Cavasinni, a principal of Auspower Pty Limited and another corporate entity.

It would not normally be appropriate for a company to meet the costs of legal services provided to any entity other than the company itself. Please advise the basis upon which you maintain that Auspower Pty Limited is liable to meet costs which are owed to you by any party other than Auspower Pty Limited.

49 On 28 September 2005 the solicitor sent a letter to the Society which said in part:-

At no stage have any of the monies held in trust ever been released to Auspower Hydraulics Pty Limited. All monies were released to the individuals and or Cavasinni’s designated company for what we understand were tax advantages.

The company no longer exists. It has been deregistered as at 12th June 2005 and Kemp Stang could not have obtained instructions from the company Auspower to proceed with any complaint. A copy of the search is attached.

Accordingly the S152 Notice could not have been properly issued. We request it be dismissed.

As foreshadowed in our conversation of even date, we anticipate that Kemp Strang will instruct Cavasinni to seek the reinstatement of the company onto the ASIC register simply for purpose of maintaining an ongoing malicious vendetta against the writer. They have done nothing proactive or constructive as to resolution of the lien and outstanding costs despite having requested copies of all the accounts.

50 On 28 September 2005 the Society sent a letter to the solicitor which said in part:-

You raise an interesting point. I shall consult with my Manager and get back to you.

My initial response is that as a valid complaint has been referred to the Society for investigation, the de~registration of the complainant may not operate so as to invalidate the complaint from the date of de-registration. You will note that pursuant to S134(3) of the Legal Profession Act 1987 (copy attached) a complaint that has been duly made is to be dealt with in accordance with this Part (Part 10).

51 On 29 September 2005 the Society sent a letter to the solicitor which said in part:-

My file records that on 1 September 2005 I forwarded to you by facsimile transmission a letter containing the proposed text of the Section 152 Notice, which I understand has now been served on you. I received a facsimile transmission from you on 2 September 2005, which, with respect, I do not believe answers the issues raised in this complaint. I sent a facsimile transmission to you on 5 September 2005 setting out my understanding of the position with regard to Mr Cavasinni’s accounts. I requested your response before 8 September 2005 in the hope that the issue of a Section 152 Notice could be avoided. As I did not hear further from you, the Notice was accordingly issued by the Professional Conduct Committee on 8 September 2005.

I note your advice that Auspower Hydraulics Pty Limited has been de-registered. As noted in my facsimile of 28 September 2005, it is my tentative view that the S152 Notice served on you is valid. Accordingly,I request that you comply with the Section 152 Notice according to its terms.

52 On 29 September 2005 the Society sent a letter to the solicitor, signed by the Manager of the Professional Standards Department, which said in part:-

I confirm Mrs Young’s advice that the fact that Auspower Hydraulics Pty Limited has been de-registered does not operate so as the (sic) render invalid the S152 Notice served on you in this matter.

Please ensure that the Notice is fully complied with.

53 On 14 October 2005 the Society sent a letter to the solicitor enclosing a letter from KS to which was attached a letter from ASIC dated 7 October 2005 advising that on that day the complainant company (Auspower) was reinstated to the register.

54 On 17 October 2005 the solicitor sent a Statutory Declaration ("the Declaration"), sworn that day, to the Society in response to the Notice served on him on 28 September 2005. Page 1 of the Declaration said:-

B.(1) I agree that the letter of 28th April was the first time I informed the client/s in writing of the existence of the lien. I deny that the lien only operated from that date. Cavasinni was aware of our outstanding accounts for both Auspower and his own. The pressure on Coleman & Greig to authorise the release of the controlled monies was designed so as to operate to defeat the lien.

The Declaration enclosed a Memorandum of Costs and Disbursements to Auspower in the sum of $2,226.00. With the sum of $7,950.00 referred to in paragraph 40 above the amount said to be due by Auspower was now $10,176.00.

The Statutory Declaration indicated that following a distribution that day to KS on behalf of Auspower in the sum of $26,222.85 the balance held was $97,917.25. A lien was claimed in relation to this sum for amounts due as follows:-

i Lien claimed for amount due by Auspower - $10.176.00

ii. Lien claimed for amount due by Cavasinni - $87,747.19

55 On 14 June 2006 the Society sent a letter to the solicitor enclosing a letter from KS dated 7 June 2006 attaching a 6 page statement from Michael and Mark Popovic on behalf of Auspower. The Society’s letter said in part:-

You will note that Messrs Popovic remain adamant that you have no lien over funds held in trust. As previously indicated, I believe this to be the case. I require that you provide a copy of your trust ledger to me within seven (7) days of the date of this letter. I note that the document attached to your letter dated 28 April 2005 which was sent to Messrs Kemp Strang consisted of one page only and did not appear to contain any reference to transactions occurring after 22 February 2005. This is not satisfactory.

Any failure to comply with this request will not be accepted.

Please note that the Section 152 Notice served on you on 28 September 2005 required a copy of your current trust account ledger to be produced to the Society. You appear to be in breach of the terms of that Notice while ever a copy of that document has not been provided.

56 On 26 June 2006 the solicitor sent a letter to the Society enclosing a complete copy of his trust account ledger consisting of 2 pages.

57 On 26 June 2006 the Society sent a letter to the solicitor indicating that the author of the letter was unable to reconcile the document received that day with the solicitor’s Statutory Declaration of 17 October 2005. The letter also sought further information.

58 On 27 June 2006 the Society sent a letter to the solicitor indicating that the author of the letter believed that the copies of the trust ledger provided by the solicitor differed.

59 On 5 July 2006 the solicitor sent a letter to the Society requesting that consideration of the matter be adjourned.

60 On 5 July 2006 the solicitor sent an 11 page letter, together with attachments, to the Society maintaining his position.

61 On 5 July 2006 KS sent a letter to the Society responding to the solicitor’s statutory declaration of 17 October 2005 and raising a further complaint concerning $55,000.

62 On 7 July 2006 the Society sent a letter to the solicitor advising that consideration of the complaints could not be deferred.

63 On 6 July 2006 the matter was considered by the Society’s Professional Conduct Committee ("the Committee") which resolved, subject to submissions, to refer the solicitor’s conduct to the Tribunal, at the same time dismissing other complaints. On 19 July 2006 a letter was sent by the Society to the Solicitor advising him of this.

64 On 31 July 2006 the solicitor sent a letter to the Society seeking an extension of time to reply for reasons set out in the letter.

65 On 21 August 2006 the Society sent a letter to the solicitor advising that the author of the letter was unable to accede to his request. The letter also drew the solicitor’s attention to the fact that he had failed to comply with the Section 152 Notice and requested that he forward the materials requested in Schedule 2 of the Notice.

66 On 24 August 2006 the solicitor sent a 6 page letter to the Society explaining his position in relation to the 6 heads of complaint.

67 On 24 August 2006 the solicitor sent a letter to the Society.

68 On 25 September 2006 the solicitor sent a letter to the Society requesting he be provided with information.

69 On 5 October 2006 the solicitor sent a letter to the Society.

70 On 1 November 2006 the solicitor sent a letter to the Society enclosing a letter with annexures he had sent to the Commissioner.

71 On 8 November 2006 the Society sent a letter to the solicitor requesting that he provide a statement explaining the relevance of the material recently supplied.

72 On 23 February 2007 the solicitor sent a letter to the Society requesting mediation.

73 On 22 May 2007 the solicitor sent a 14 page letter to the Society.

74 On 22 May 2007 the solicitor sent a further letter to the Society enclosing a letter he sent to KS dated that day. The letter enclosed a copy of a cheque drawn on his trust account in favour of KS in the sum of $87,741.25. The letter said in part:-

We note that the accounts for Auspower (Voith, Purchase file and Manuli) exceed $10,176.00, bit (sic) given that we have specifically made reference to that figure in the calculation of the lien and response to the Law Society, we shall only account for that amount.

75 On 28 May 2007 the Society sent a letter to the solicitor advising that the matter would be considered by the Committee on 31 May 2007.

Complaints re S.152 Notice/fail to assist Society in investigation of complaint

76 The Solicitor’s failure to respond to correspondence was considered by the Society’s Professional Conduct Committee ("the Committee") at its meeting on 8 September 2005. The Committee resolved to issue a Notice to the Solicitor pursuant to the provisions of Section 152 of the Legal Profession Act, 1987 ("the Notice").

77 The Notice was served on the Solicitor on 28 September 2005.

78 On 17 October 2005 the Solicitor forwarded a Statutory Declaration (declared that day) to the Society which said in part:-

6. Schedule 2 I will be able to provide those limited matters referred to in Schedule 2 which are relevant. The imposition of the lien has a different basis and purpose to that intended by the drafter of the list.

79 On 14 June 2006 the Society forwarded a letter to the Solicitor advising that his current trust account ledger required pursuant to the Notice had not been received.

80 On 26 June 2006 the Solicitor forwarded a letter to the Society together with a copy of the trust account ledger.

81 On 26 & 27 June 2006 the Society again forwarded letters to the Solicitor requesting further information with respect to the trust account ledger supplied by him.

82 On 6 July 2006 the Committee resolved to make the complaints against the Solicitor, following which a letter was sent to him on 20 July 2006.

83 On 24 August 2006 the Solicitor forwarded a letter to the Society together with documents requested pursuant to the Notice. The letter said in part:-

I did not understand the Notice to require production of all files. The actual sale of business file was previously inspected by Jim Sofiak of the Law Society who took copies/records relevant to the matter including the deposit records.

84 On 25 September 2006 the Society forwarded a letter to the Solicitor again requesting that he produce the files.

85 On 31 October 2006 the Solicitor forwarded a letter to the Society which concluded:-

instead the Society is persecuting a member, in the absence of any authority, ruling, precedent or direction on the initial lien and a supposed non compliance with a Notice, which is, strenuously denied in all the circumstances.

86 On 2 November 2006 the Committee resolved, subject to submissions, to refer the Solicitor’s conduct to the Tribunal, following which a letter was sent to him on 7 November 2006 advising him of the resolution.

87 On 22 November 2006 the Solicitor forwarded a letter to the Society which said in part:-

We have produced the file originally sought in the S152 Notice (which was provided in a box with the delivered file in Adams acknowledged as received in your letter of the 13th November, 2006).

We have provided detailed responses and copies of documents of (sic) various intervals.

We dispute the grounds for the issue of the complaint are valid.

Would you confirm that you are in receipt of the Auspower file requested in the S152 Notice and whether in your view the notice has been answered.

88 On 22 November 2006 the Society forwarded a letter to the Solicitor acknowledging receipt "of a box of material said to comprise the matter file relating to Auspower Pty Ltd" though indicating it did not appear to be the complete file.

..........................................................................................................

2 The Society sought the following orders:

(a) That the Solicitor pay a monetary penalty;

(b) That the Solicitor be reprimanded;

(c) That the Solicitor pay the Society’s costs of the proceedings; and

(d) Such further and other orders as the Tribunal deems appropriate.

3 On 24 October 2007 the Solicitor filed a Reply to the Society’s Application and on 18 December 2007 the Solicitor filed an Amended Reply. In that Amended Reply the Solicitor denied the five allegations of professional misconduct dealt with at the hearing and also the three allegations of unsatisfactory professional conduct . In particular he asserted in relation to the allegations:

(a) Breach of undertaking - his undertaking was "to account" not "to release" moneys ;

(b) S 61 - No breach occurred and if a breach did occur then such breach was not wilful;

(c) Failure to account- moneys were retained pursuant to a claimed lien;

(d) Improperly asserting a lien - assertion was not improper. Neither the Society nor the Commissioner directed him to waive the lien;

(e) S 152 - Response provided as prepared by his then legal representative ;

(f) Failure to communicate- he replied to correspondence;

(g) Failure to transfer file - relied upon claimed lien; and

(h) Delay - he released funds and informed the party of the lien on the basis of the accounts originally provided in September 2002.

The Tribunal in publishing its reasons for decision has as a matter of convenience adopted the abbreviations used in the particulars provided by the Society which are set out above.

4 The documentation relied upon by the Society was as follows:

(a) Affidavit of E.Edwards sworn 28 May 2005 (in respect of service of the s152 notice);

(b) Affidavit of R.J.Collins sworn 22 June 2007 ( "Collins Affidavit");

(c) Affidavit of S.Roppolo sworn 26 February 2008; and

(d) Letter from Messers Kemp Strang to the Solicitor dated 4 July 2006.

Ms Roppolo was required for cross-examination. At the conclusion of the second day of the hearing her cross-examination was incomplete . The legal representative for the Solicitor indicated on the third hearing day that he did not wish to resume her cross-examination. Ms Edwards and Mr Collins were not required for cross-examination.

5 The documentary material relied upon by the Solicitor consisted of :

(a) The Affidavit of D.Carbone sworn 19 March 2008 ;

(b) Summons to Produce Documents addressed to S. Roppolo dated 13 May 2008;

(c) Bundle of documents contained in an envelope produced on behalf of S.Roppolo.

The first allegation - breach of an undertaking.

6 The terms of the undertaking relied upon which was dated 1 December 2004 are set out above in paragraph 20 of the particulars.The terms are not disputed by the Solicitor who stressed that it was an undertaking to account and not to release moneys.The effect of the undertaking was clearly appreciated by Kemp Strang who were acting for Austpower when that firm of Solicitors wrote to the Solicitor on 9 December 2004 in terms:

" ...Your proposed undertaking does not refer to when you will release the moneys and the method by which you will do so.Please confirm when the moneys will be released , the sum to be released and the method by which you will release the same".

There is nothing to suggest the undertaking was altered or that the Solicitor replied to the letter of 9 December 2004. The undertaking relied upon is that of 1 December 2004 already referred to. The Society submitted that " ‘accounted for’ means that the parties are going to be paid a share of the moneys to which they are entitled". The Society says the undertaking was breached because it took considerable time for Auspower to receive all the moneys to which it was entitled. The evidence is that there were three payments:

(i) 28 April 2005 $ 123, 898.96

(ii) 17 October 2005 $ 26,222.85 and

(iii) 22 May 2007 $ 87,741.25.

From the documents produced under Summons by Kemp Strang ( item c in paragraph 5 above) it is apparent that the terms of the undertaking were the subject of negotiation over some period of time before 1 December 2004. Those papers included a copy of a letter from Kemp Strang to Hydraulink though personalised as a letter to Mr Frank Cavasinni dated 29 September 2004 in relation to the Deed of Release between vendor and purchaser and the release of the retention money by the Solicitor. The letter is in part as follows:

"We enclose copy of a letter (with enclosures) from Coleman & Greig dated 17 September 2004 received by us on 27 September 2004.

You will note that the amendments proposed in our letter to Coleman & Grieg dated 3 September 2004 have been adopted and that Coleman & Grieg have obtained an undertaking from Carbone with respect to

the release of the retention money".

7 The retention money is the money which is the subject of the undertaking and was held by the Solicitor as stakeholder in accordance with condition 3.1.4 set out above in particular 2. The material before the Tribunal makes it clear that there was no basis for suggesting that the Solicitor held the money on behalf of Austpower or that he should or could transfer the $300,000 to Kemp Strang as those Solicitors sought and maintained to the Society. The Solicitor held the money as stakeholder and Coleman & Grieg as Solicitors for the other party refused to consent to a change of stakeholder.

8 The Solicitor in his letter to the Society of 28 April 2005 put the situation clearly in the numbered paragraph 3 :-

"The undertaking provided to both firms is "to account" not to release moneys as asserted . The undertaking was specifically worded to account as opposed to release funds as originally requested by Kemp Strang and they would be aware of our claim for a lien over these moneys".

9 Following the determination of the EBIT and the provision of documentation to the Solicitor to establish that he was free to account for the moneys his Trust Account records indicate the deposit of the moneys held by the Solicitor as stakeholder in an interest bearing account were paid to his Trust Account in February 2005. There were no outstanding claims between the Solicitor and Hydraulink and the share of the moneys due to Hydraulink were paid out by the Solicitor in February 2005.

10 In his affidavit the Solicitor deposed that as at September 2002 when he ceased to act for Mr Cavasinni and his companies that costs and disbursements of in excess of $128,000 were owing to him from Mr Cavasinni and his companies . The Solicitor prepared and delivered to Mr Cavasinni personally at his office invoices and statements of account for matters then current. In paragraph 22 of his Affidavit he states and the Tribunal accepts that "The amount then outstanding was approximately $128,000". The evidence of the Solicitor was clear and the Tribunal accepts that Mr Cavasinni had at the very least until September 2002 been the spokesperson for Auspower and other Companies under his control and that he , Mr Cavasinni, gave instructions and made the decisions on which the Solicitor was required to act. Mr Cavasinni did not pay the Solicitor from his own funds for work performed for him personally but instead paid accounts for work performed for him personally and for various companies from funds held in trust from various other companies which he controlled.

11 The Solicitors evidence, which the Tribunal accepts, is that Mr Cavasinni said to him prior completion of the sale (which took place in 2001 leaving the EBIT calculation to be determined after a trading period) words to the effect "Anything outstanding to you can be paid from the money coming in on the Auspower sale". The Tribunal also accepts that about the time of completion (in 2001) that the Solicitor said to Mr Cavasinni "I have other costs accrued. Will you pay them separately or will they come out of Auspower" and Mr Cavasinni replied to the effect "It can be paid from the Auspwer money when the EBIT retention is available". The sale had been completed in 2001 and the sum of $300,000 was retained by the Solicitor as stakeholder pending the EBIT determination of the company for the financial year ended 31 July 2001 where the sale Deed provided for a reduction in the price if the EBIT for that period was less than $650,000.

12 The Solicitor’s Affidavit was sworn and filed on 19 March 2008. The Tribunal has had the opportunity to consider a large amount of material in relation to the Auspower and Hydraulink transaction together with other documentation in relation to the business and personal relationship between the Solicitor and Mr Cavasinni .The Tribunal finds that the correspondence makes it very clear that the complaint made by Kemp Strang was made at the instigation of Mr Cavasinni and that from the correspondence produced by the Society that Mr Cavasinni was the person with the most knowledge of the relevant facts who could if the assertions of the Solicitor were to be disputed give contrary evidence. The Tribunal notes that there is no evidence from Mr Cavasinni. The Solicitor against whom the conduct allegations have been made by the Society has sworn an affidavit and been cross-examined. He has clearly been ready to confront those wishing to seek to propound a contrary version of the facts. However there is no Affidavit from Mr Cavasinni nor from Mr Sofiak , Ms Young , Mr Napper or any other person who might have been expected to participate in the hearing had the evidence of the Solicitor been such that it should have been contradicted. The Society’s three officers just mentioned are not compellable witnesses (see s 171R- Legal Profession Act 1987) . At least those four people could have provided evidence if the Solicitor’s evidence was to be contradicted in a detail , in a minor way or on major aspects. The Solicitor facing five allegations of professional misconduct and three allegations of unsatisfactory professional conduct came to the Tribunal to confront his accusers and the four most obvious potential witnesses for the Society took no part in the hearing. The Tribunal accepts the evidence of the Solicitor. The acceptance is not by default but is the result of an overall assessment of him as a man giving evidence in a frank and truthful manner in a hearing of great importance to him as well as inevitably being a source of great stress to him .The evidence of the Solicitor on these and various other issues in this matter is not contradicted by witnesses that the Society might have been expected to call and did not call. This failure does not resolve a fact situation but it is proper for the Tribunal to draw inferences favourable to the Solicitor from the conduct of the Society in calling and not calling witnesses. The Tribunal finds that this situation is best explained by adapting the opinions expressed by Menzies J in Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298 at 312 in relation to a direction to a jury in a Compensation to Relatives case to the situation before the Tribunal. His Honour said:

"In my opinion a proper direction in the circumstances should have made three things clear: (i) that the absence of the defendant Hegedus as a witness cannot be used to make up any deficiency of evidence; (ii) that evidence which might have been contradicted by the defendant can be accepted the more readily if the defendant fails to give evidence; (iii) that where an inference is open from facts proved by direct evidence and the question is whether it should be drawn, the circumstance that the defendant disputing it might have proved the contrary had he chosen to give evidence is properly to be taken into account as a circumstance in favour of drawing the inference."

13 In relation to the undertaking the Tribunal notes that the final payment of moneys paid to or on behalf of Auspower by the Solicitor was made from his Trust Account about 25 months after the first of those payments. The Tribunal accepts that the first payment represented an amount which the Solicitor regarded as not properly the subject of a claim for a lien. The second payment was made following the Solicitor deciding to adjust the amount he would pursue under his claimed lien . The third and final payment represented a release of the balance of moneys he held . The evidence of the Solicitor (paragraph 71 of his Affidavit) is not disputed. On 17 May 2007 he received a facsimile from Kent Strang advising that the complaint against him would be withdrawn subject to a number of conditions including a release of Mr Cavasinni from his claims for costs and disbursements and withdrawal of the application for cost assessment. The Solicitor was unwilling to do this but decided at that stage as detailed in paragraph 71 of his Affidavit "to hand over so much of the amount over which I then claimed a lien as was not required for payment of costs and disbursements due by Auspower on the Hydraluink transaction".

The Solicitor deposed (in paragraph 76) to the fact that he had formed the view that his lien was a possessory one and that it was never going to provide a fund that he could attach and that payment of his costs and disbursements would only be achieved through the assessment process so that he could obtain a judgement and seek to enforce that through Court action.

14 Accordingly in relation to the first allegation the Tribunal is satisfied that the undertaking given by the solicitor was to account and not to release and the allegation as so framed fails and accordingly is dismissed.

The second Allegation - Wilful breach of s 61

15 In its submissions the Society’s case was that the breach alleged occurred on 28 April 2005 . The submission was in that on that date which was after the Solicitor paid out Hydraulink the Solicitor "instead of paying the full amount he held to the solicitors now acting for Auspower , namely Kemp Strang, he only paid out the amount of $123,898.96". There is no dispute as to the amount held on 28 April 2005 or the amount paid out on that day. The issues are whether the Solicitor’s conduct amounted to a breach and if so whether the breach was wilful.

16 S61 of the Legal Profession Act 1987 which applies to this allegation contains a number of provisions and the Society has not specified which of these has been breached. The solicitor contends that this is not of moment here for in his submission he has complied with S 61. He received money which he was required to hold as stakeholder in a controlled money account which he did. Ultimately the respective entitlements of the two companies were established and he paid the moneys into his trust account. There was no dispute as to the entitlement of Hydraulink to the share of the moneys agreed to be due to it after the EBIT had been agreed and Hydraulink was paid out. Part of the balance of the moneys then remaining in the Trust Account were then claimed by the Solicitor to be subject to a lien in his favour and those moneys remained in the Solicitor’s Trust account on and after 28 April 2005 when the breach is alleged to have occurred. On that day $123,898.96 being moneys over which the Solicitor did not claim a lien was paid out as the parties had directed. The Solicitor did not have access to the balance of the money for his own benefit and there is no complaint by the Society to suggest that there was ultimately any payment of these moneys to any person other than the people or entities which the Society itself asserts were entitled.

17 S 61 (3) and S 61 (4) of the Legal Profession Act 1987 are as follows :

(3) This section:

(a) does not prevent a solicitor from depositing money with the Law Society in compliance with section 64, but this section continues to apply to any money so deposited that is repaid to the solicitor, and

(b) does not prevent a solicitor from withdrawing or receiving, from trust money or controlled money:

(i) reimbursement for disbursements paid by the solicitor, or

(ii) money for disbursements to be paid by the solicitor, or

(iii) money due, or to accrue due, to the solicitor for costs,

so long as the procedure prescribed by the regulations is followed, and

(c) does not affect any enforceable lien or claim that a solicitor has to any money, and

(d) does not prevent a solicitor from exercising a general retaining lien for unpaid costs and disbursements in respect of money in a trust account or a controlled money account (other than money received subject to an express direction by the client with respect to the purposes for which the money is to be applied), and

(e) does not prevent a solicitor from holding, or disposing of, a cheque or other negotiable instrument payable to a third party if the solicitor does so on behalf of a client and in accordance with directions given by the client, and

(f) does not affect an authority that a solicitor has and that, apart from this section, is irrevocable.

(4) A lien referred to in subsection (3) (d):

(a) may not be exercised for an amount in excess of the sum of the costs and disbursements unpaid, and

(b) may not be exercised unless the solicitor has delivered a bill of costs and disbursements to the client on whose behalf the money is held.

18 The Tribunal was not addressed as to the impact of the word "claim" in subsub section (c) upon the facts in this matter. The Tribunal has accepted the evidence of the Solicitor referred to in paragraphs 10-12 inclusive above and finds that the relevant companies were controlled by Mr Cavasinni and that he at least up to September 2002 was permitted by the companies to make commitments on behalf of those companies and to direct how moneys received by the Solicitor on behalf of such entities were to be dealt with including payment of moneys due to the Solicitor either by Mr Cavasinni personally or by some separate company. The Tribunal is comfortably satisfied in terms of the Briginshaw test that the Solicitor was by the representations of Mr Cavasinni already referred to given a lien and an entitlement to claim from the Auspower moneys post EBIT approximately $128,000 owing to the Solicitor by Mr Cavasinni and his associated entities .

19 The Society pressed a submission that an account for a matter for Auspower involving Manuli was not prepared until October 2005. The letter from the Solicitor to Kemp Strang of 2 September 2005 lists 17 accounts as enclosed and shows Auspower/Manuli estimated only and not enclosed. The submission then appears to the Tribunal to rely on the terms of s 61 (4) (b) of the Legal Profession Act 1987 which must be read in conjunction with s 61 (3) (d) . The Tribunal finds that without taking the "wilful" aspect into account that the Solicitor was on the evidence before it entitled to rely upon the assurances from Mr Cavasinni in or prior to 2001 that "Anything outstanding to you can be paid from the money coming in on the Auspower sale"as entitling him to payment of the Manuli and other accounts once quantified from such moneys as Auspower would otherwise be entitled ultimately from the moneys held by the Solicitor as stakeholder on the sale to Hydraulink.The Society raised issues as to when the claim for a lien was raised. The Tribunal finds that until the EBIT determination had been made there was no specific sum to which the lien could attach and that in any event Mr Cavasinni and through him Auspower were aware that approximately $128,000 was claimed by the Solicitor for outstanding costs and disbursements owing to him and payable by Mr Cavasinni’s assurance from those moneys. In addition the Society queried this on the basis that the EBIT determination might have resulted in a sum of less than $128,000 being available for payment to the Solicitor. The Tribunal does not see that this affects the primary issue and that in that event the lien which the Solicitor believed he had the benefit of would protect him only to the extent of the EBIT share of Auspower and if that were nil then the lien would be worthless.

20 If the Tribunal is wrong in its reasoning on this complaint there remains the essential ingredient of the failure being "wilful". The Tribunal finds that on the evidence the Solicitor had reasonable grounds for believing that he had a lien over the balance of moneys he held on the Auspower ledger after the payment of 28 April 2005. It further finds upon consideration of his evidence and in particular after observing him in the witness box under cross-examination that he believed on 28 April 2005 that he was entitled to the lien he claimed . The Solicitor did not "exercise" a lien within the meaning of the section in terms of the meaning of that word involving an action in relation to the balance of the money held. He asserted the lien but he continued to hold the moneys in his Trust Account and derived no personal benefit from the same. Ultimately moneys due to the Solicitor from Auspower were transferred to the Solicitor and there appears to be no complaint about that payment which was of $10,170.00 on 22 May 2005 (p253 of Exhibit to the Collins Affidavit) . The solicitor over time withdrew his claim to a lien for the reasons already detailed while still maintaining his entitlement to that lien and until he did so he held moneys in his Trust Account on the Auspower ledger.

21Accordingly if the Tribunal is in error and there has been a technical breach of Section 61 the Tribunal finds that any such breach was not wilful and it dismisses this allegation.

The third allegation - failure to account for the balance of funds held in trust

22 In relation to this allegation the Society relies upon the payment of the balance of moneys following the EBIT determination having been made over a period from 28 April 2005 as already detailed in relation to the first allegation. The Society asserted that the second of the three payments made was after a calculation of the sum the Solicitor believed Auspower was entitled to receive after retaining the sum of $10,176 " being the amount claimed for his lien for costs" . In the Tribunal’s view this is not consistent with the evidence of the Solicitior as to the circumstances that led to the three payments being made of the balance of funds in his Trust Account detailed in paragraph 13 above and it is not necessary to repeat it. In final submissions on behalf of the Solicitor it was pointed out that there is difficulty in seeing a substantial difference between the matters put in relation to the first and third allegations. Those submissions stressed that "failure to account does not mean a failure to pay , but even if it did the money was paid and it was accounted for".

23 The Tribunal takes the view that there is no material difference on the facts or impact of the first and third allegations and is not comfortably satisfied that the third allegation is made out and the third allegation is also dismissed.

The fourth allegation - improperly asserting a lien over retained funds

24 The evidence of the Solicitor is clear that he believed that he had a lien over the moneys held in trust. This belief is not disputed by the Society in its submissions. The Society further concedes that there is no dispute that the Solicitor had a lien for the sum of $10,176.00 being the moneys that were due by Auspower to him but the Society disputes that the Solicitor could claim a lien over any further moneys that is moneys that were due by Cavasinni or other associated parties separate from Auspower.

25 The Society referred to the fact that neither the Law Society nor the Commissioner directed the Solicitor to waive the lien he claimed. In submissions the Society’s response was that while the Society and the Commissioner has power in relation to the waiver of a lien over documents no such power exists in relation to a lien over money held in trust.

26 The Tribunal does not regard its task in relation to this allegation to determine whether the Solicitor had a lien over the retained funds. The Tribunal regards the word "improperly" as being an essential element in the allegation as framed. The allegation is not that the Solicitor asserted a lien mistakenly or where one did not exist but rather that he asserted it improperly which the Tribunal finds necessarily involves consideration of the state of mind of the Solicitor as demonstrated by his conduct.

27 The Tribunal finds that the evidence already referred to of the statements made by Mr Cavasinni together with the evidence of prior conduct involving accounts for various entities being paid at Mr Cavasinni’s direction by other companies or entities under his control are more than sufficient in the Tribunal’s view to lead the Solicitor to the belief that he was entitled to be paid from the Auspower moneys the various accounts due from Cavasinni and other entities amounting to about $128,000. The Tribunal is satisfied that the Solicitor was entitled to regard Mr Cavasinni as being in control of Auspower at all relevant times for the purposes of the lien allegation. Indeed other Directors or shareholders of Auspower became active in the matter after the EBIT resolution though in the correspondence in Exhibit "3" the Tribunal finds that Mr Cavasinni acted and was dealt with as being in control of Auspower by Kemp Strang. The essence of the arrangement might fairly be put in terms of the Solicitor being told in effect by Mr Cavasinni on behalf of Auspower ‘you will hold moneys in trust for Auspower and you will be paid the moneys that are due to you by me and the various companies out of those moneys when the EBIT is finalised.’

28The Tribunal finds that the Solicitor could then quite properly have formed the view that once the EBIT had been determined that he then had a lien over the share of the moneys determined to be due to Auspower to ensure payment of moneys due from various Cavasinni associated clients .The evidence of the Solicitor has not been challenged by contrary evidence and the evidence of the Solicitor is accepted and the Tribunal finds that he did on that basis believe that he had a lien.

29 The evidence however goes beyond the Solicitor’s proper reliance on the statements of Mr Cavasinni. The oral evidence of the Solicitor (from p30 on 22 May 2008) relates to a Trust Account inspection by Mr Sofiak of the Society’s Trust Account Department following a complaint by from either Auspower or Kemp Strang. The unchallenged evidence is that the Solicitor told the inspector that he was "claiming a lien over the funds that are held in Trust which are going to pertain to ownership of either Auspower or Mr Cavasinni" and he explained the course of dealings of the matter and the history of himself and Mr Cavasinni. The Solicitor gave further evidence that when Mr Sofiak left the inspector stated there was "no issue about the money having gone missing anywhere" . The final part of the conversation about the lien at page 31 is a little garbled in the transcript but with the aid of notes taken of the evidence it should read that the inspector said in relation to the lien " that is not something I am going to get involved with" .

30 The Tribunal finds that in the light of other evidence the conversation with Mr Sofiak is one of a number of efforts the Solicitor made to seek independent reassurance that he was could properly assert a lien and this is not consistent with the allegation of his acting "improperly".

31 In cross-examination the Solicitor gave evidence of various contacts he had had with officers of the Society’s Trust Account Department and also with officers employed by the Society who dealt with Professional Conduct. His evidence was tested in cross-examination but it was not shaken and there was no contrary evidence brought in rebuttal where three employees of the Society were expressly referred to namely Ms Young and Messers Sofiak and Napper. Also in cross-examination the Solicitor asserted in relation to a telephone conversation with an employee in the Trust Account department :-

" I was advised at that stage that I could have got around this whole problem of having the ledger in Auspower’s name simply by doing a journal transfer". (T34 of day 1).

This was challenged by the Society as to whether any evidence to that effect had been produced to the Tribunal. The Solicitor searched through the documentation before the Tribunal and identified a paragraph on page 240 of the Collins Affidavit which reads:

"Significantly, advice received from the Society’s Trust Account department was that the issue of ownership of funds by reference to the name on the Trust card, could have been negated and accepted by their department , by way of a journal transfer to Cavasinni’s name ,supported by the fact that no payments or distributions of money had been made to the corporate entity, Auspower".

32 It is consistent with the Tribunal’s view of the Solicitor’s state of mind that 5 pages of his letter of 22 May 2007 to the Society were devoted to his contention of the legal basis for the lien. The submission is a detailed one and it referred to seven reported decisions with appropriate quotes in support of his contention and the Tribunal is satisfied, with his personal belief.

33 The Solicitor’s letter of 22 May 2007 was acknowledged by the Society’s letter of 28 May 2007 but in the opinion of the Tribunal there is no indication of any effort made by the Society in that letter nor evidence of it subsequently addressing with the Solicitor the many issues raised by the Solicitor in relation to the allegations including this "improperly asserting a lien" allegation.

34 In cross-examination the Solicitor was asked about the views of Ms Young of the Society’s Professional Standards Department concerning the lien. The Solicitor acknowledged that he had received two letters including that of 14 June 2006 (page 85 of the Collins Affidavit) and he said :"I agree with that, but as she repeatedly stated to me that was her personal view . And she told me that on a number of occasions in various telephone discussions that it was her view that it wasn’t a valid lien but it hadn’t been tested anywhere. And just for the sake of completeness , she never expressed it to be anything other than her view".

This is consistent with the statement in the letter from the Ms Young on behalf of the Society of 14 June 2006 : "You will note that Messers Popovic remain adamant that you have no lien over funds held in trust. As previously indicated, I believe this to be the case".

35 The Tribunal is comfortably satisfied that the Solicitor believed that he had a lien for the moneys owing to him by Mr Cavasinni and entities other than Auspower and that that lien was over the moneys in his Trust Account under the ledger card of Auspower. The lien was disputed by Kemp Strang after the EBIT determination and it was challenged by the Society in correspondence following the complaint . In the light of these challenges and complaints the Solicitor, on the evidence before the Tribunal, sought advice from Ms Young, Mr Sofiak and Mr Napper from the Society, he retained and took advice from Mr Cuddy who was accepted at the hearing without demur as an experienced solicitor in advising in the area of complaints against legal practitioners as part of the Senior Solicitors Scheme and he maintained his lien and supported it in lengthy correspondence with the Society.

36 The Tribunal is satisfied as to his state of mind at all relevant times in terms that the Solicitor thought he had a lien and was entitled to maintain it. The Tribunal expressly does not determine the validity of the claim but it is satisfied that the intent involved in the allegation has not and could not be established on the evidence before it. This allegation is dismissed.

The fifth allegation - without reasonable cause failure to comply with a Council requirement under s 152 of the Legal Profession Act 1987.

37 The s 152 notice dated 8 September 2005 addressed to the Solicitor was served upon him on 28 September 2005. It required him to provide to the Society’s Professional Standards Department Manager within 21 days after service with:

(a) a statutory declaration containing the information sought in

schedule 1 of the notice ;and

(b) the documents specified in Schedule 2 of the notice.

38 The section provides the investigative authority , in this instance the Society, with a most powerful tool in the investigation of complaints against practitioners. The powers are deemed to be necessary to enable the Society (in this instance) to properly fulfill its regulatory function . The section provides a powerful means of seeking access to documents and information so that complaints against practitioners can be investigated and hopefully resolved in a prompt manner. The powers are exercised regularly and practitioners have frequently been dealt with by this Tribunal for failing to comply with notices . The outcomes of Tribunal hearings are reported in the Law Society Journal , published on the Austli website and at times referred to and made accessable to the legal profession through the "Monday Briefs" a weekly update on regulatory changes, events and information sent by the Society virtually every week to the profession. The decisions of the Tribunal are so publicised to educate the profession and to highlight areas where other practitioners have encountered conduct problems as a warning to the profession generally.

39The failure to comply with a notice without reasonable excuse is under the Act professional misconduct . The message to the profession should by now be very clear. Compliance with notices under s 152 is an integral part of dealing with complaints and failure to do so without reasonable excuse is likely to lead to a successful complaint against the practitioner in this Tribunal even though conduct issues which lead to the issue of the 152 notice may have been ultimately resolved often by documents or information provided much later by the practitioner long after the same were due under the notice. Compliance is not optional and prompt compliance is necessary if the investigatory and disciplinary processes are to work satisfactorily.

40 The wording of s 152 is as follows:

Powers of Council or Commissioner when investigating complaint

(1) For the purpose of investigating a complaint, a Council or the Commissioner may, by notice in writing served on any legal practitioner, require the legal practitioner to do any one or more of the following:

(a) to provide written information, by a date specified in the notice, and to verify

the information by statutory declaration,

(b) to produce, at a time and place specified in the notice, any document (or a copy

of any document) specified in the notice,

(c) to otherwise assist in, or cooperate with, the investigation of the complaint in a specified manner.

(1A) A Council or the Commissioner may inspect any document produced before the Council or Commissioner under this section and may retain it for such period as the Council or Commissioner thinks necessary for the purposes of an investigation in relation to which it was produced. A Council or the Commissioner may make copies of the document or any part of the document.

(2) If a legal practitioner against whom a complaint is made claims a lien over documents relating to the matter the subject of the complaint, the Council or the Commissioner may, by notice in writing served on the legal practitioner, require the legal practitioner to waive the lien if satisfied it is necessary for the orderly transaction of the client’s business.

(3) A notice is served under this section on a legal practitioner if:

(a) it is served personally on the practitioner, or

(b) it is sent by post to the practitioner’s place of practice, business or residence last notified by the practitioner to a Council.

(3A) A notice under this section is to specify a reasonable time for compliance with the requirement.

(4) A legal practitioner who, without reasonable excuse, fails to comply with such a requirement is guilty of professional misconduct.

(5) A legal practitioner must not mislead or obstruct a Council or the Commissioner in the exercise of any function under this Division. The wilful contravention of this subsection is capable of being professional misconduct.

41 In response to the notice under s 152 the Solicitor provided a Statuary Declaration made on 17 October 2005 (page 74 of Collins Affidavit) and forwarded this to the Society the same day. Almost all of the Declaration addressed Schedule 1 of the notice and the aspects of the notice relating to documents in Schedule 2 were dealt with in paragraph 6 which is already set out above in paragraph 78 of the particulars. In addition after paragraph 6 the declaration referred to "enclosures" which consisted of a facsimile, two letters and a copy of an account.

42 The full meaning of paragraph 6 of the declaration is not clear to the Tribunal. It does appear to propose the provision of some documents at some time in the future being documents which in the Solicitor’s view are relevant. The remaining sentence may also appear to reflect an intended selective approach by the Solicitor on the documents to be provided by him. The Tribunal does not place reliance on that second sentence in dealing with this allegation and it finds the sentence does not progress compliance with the notice by the Solicitor.

43 From the particulars relied upon by the Society the next step (particular 79 ) was some 8 months later when on 14 June 2006 the Society wrote to the Solicitor advising that his current trust account ledger was required and from the particulars this was supplied 12 days later.

44 In the Collins Affidavit pages 101 and 102- 129 are respectively annexure AG and part of Annexure AH. The first of these annexures although clearly the second in point of time is a letter dated 5 July 2006 seeking from Ms Young of the Society an extension of 28 days to lodge "further material" in relation to the lien. It is not apparent from that letter whether the Solicitor intended to provide further documentation in answer to Schedule 2 of the notice.

The annexure AH refers to a further 12 documents which are annexed and were forwarded to the Society. The provision of these selected documents was not an option open to the Solicitor as an alternative to producing his file.

45 Particular 83 above includes a quotation from the Solicitor’s letter of 24 August 2006 which in effect asserts that he did not understand that the notice required production of all files and in any event from his viewpoint the sale of business file had been inspected by Mr Sofiak on the Trust Account inspection in about December 2004. The Tribunal accepts that Mr Sofiak is an employee of the Society but does not accept any submission that a prior inspection of the file by Mr Sofiak in about December 2004 (paragraph 84 of the Solicitor’s Affidavit) and his taking copies of documents in any way could be thought to satisfy even in part the S 152 notice served on the Solicitor some nine months later.

46 The functions of the Trust Account inspector are clearly different from those of an employee of the Professional Standards Department. The Society was entitled to require in September 2005 production of the entirety of all of the files listed in the notice in the course of the investigation at that time of a number of complaints and this entitlement was quite independent of any part of that documentation which may have been seen earlier by Mr Sofiak. Compliance with a s152 notice is not a matter of choice for a practitioner. The section is clear that unless he has reasonable excuse failure to comply renders the practitioner liable to be found guilty of professional misconduct. The Act intends compulsion and it is not a matter of a practitioner having any right to select which documents will be produced.

47 In the Society’s letter to the Solicitor of 25 September 2006 (p 224 of the Collins Affidavit) Ms Young dealt fairly and directly with the Solicitor’s reliance on a file having been previously inspected by Mr Sofiak . The delivery of the file and an explanation for the delay was sought within ten days after which Ms Young proposed to prepare a report for the Professional Conduct Committee taking into account all the material provided to the Society at that time.

48 The Solicitor did not respond within the ten day time period. He did reply on 17 October 2006 (p 225 of the Collins Affidavit) indicating that he needed the file to reply to another issue within apparently the next two days and that after that was completed and relevant documents photocopied the Solicitor would deliver the file to the Society on his next attendance in Sydney. Ms Young did not acknowledge the letter of 17 October 2006 when she wrote again in relation to the s152 notice to the Solicitor on 25 October 2006 ((p 226 of the Collins Affidavit) in the following terms:

" I refer to my letter of 25 September 2006 and note that I have heard nothing further from you on this topic . Accordingly , I have prepared a report for the Professional Conduct Committee in relation to this complaint. The committee will consider this matter when it next meets on 2 November 2006.

I shall keep you informed of developments."

49 The solicitor replied on 31 October 2006 (pp 227 & 228 of the Collins Affidavit) describing the Society’s request for the file as "most objectionable and unreasonable". This file he had on 8 September 2003 offered to photocopy for Auspower for $1.00 per page ((p 55 of the exhibit to the Collins Affidavit). His letter concluded with the words quoted in particular 85 above.

50 On 22 November 2006 (p 233 of the Collins Affidavit) the Solicitor wrote to the Society advising that the file was delivered on an unspecified date . It was agreed on the final day of the hearing (page 12 of Transcript ) that the delivery date was 13 November 2006. Ms Young’s reply of 13 November 2006 (p 234 of the Collins Affidavit) suggested that the file was incomplete as it for example contained no material relating to costs but that aspect does not appear to have been taken any further. Issues were raised at the hearing at the alleged failure of the Solicitor to produce one or more of the final bank statements on the Controlled Money Account used by the Solicitor before the EBIT determination. The evidence on this aspect was not clear and the Tribunal finds that it can determine the fifth allegation without resolving those two issues.

51 In submissions on behalf of the Solicitor it was put that the evidence was that the Solicitor "took the notice to a professional in the field who is an acknowledged specialist in that area , fully instructed him and that was the document that was drafted for him and he did not cavil at the advice he was given " . This is in relation to the Statutory Declaration and also the letter of 24 August 2006 (p 151 of the Collins Affidavit) from the Solicitor to Ms Young . The Solicitor wrote on 31 July 2006 ((p 149 of the Collins Affidavit) advising that Mr Stewart Cuddy had been retained to act and held the documents. The letter advised that Mr Cuddy was currently on leave and would not return until the 15 August 2006. The Solicitor then anticipated that his responses to two letters from the Society of 19 and 20 July 2006 should be provided in the week commencing 23 August 2006 after a conference with Mr Cuddy.

52 It was conceded in relation to the Solicitors response that it did not comply whatever advice the Solicitor had received because the s152 notice called for his original matter files and only portions of these were produced. The terms of the notice are clear and there is no dispute that original files were called for. The Solicitor on his own evidence has been a sole practitioner since 1997 . He had a personal responsibility to comply with the s152 notice . His evidence is to the effect that he was given wrong advice and the Tribunal finds that that does not constitute a "reasonable excuse" in this matter. The evidence clearly is that the declaration and the letter were prepared on expert’s advice. The notice is clear and the correspondence leaves no doubt that the complete original files were required to be produced - see particularly the later letters dated 24 August 2006 (Solicitor to Society p 171 of the Collins Affidavit - containing the material quoted in particular 83) , 25 September 2006 (Solicitor to Society see paragraph 46 above) and 31 October 2006 (Solicitor to Society see paragraph 48 above) .Ultimately the Solicitor accepted his obligation to provide the original files by delivery on 13 November 2006 and by his letter dated 9 days later.

53 The Tribunal finds that the Solicitor failed without reasonable excuse to comply with the s152 notice as alleged in the fifth allegation and that his failure constitutes professional misconduct pursuant to S 152 ( 4) of the Legal Profession Act 1987.

Unsatisfactory professional conduct.

The sixth allegation- Failure to communicate.

54 In the particulars 5-10 relied upon by the Society it was alleged that the following letters were sent to the Solicitor over a period of about ten months:-

2002

25 November (46) From Kemp Strang ("KS") enclosing authority and requesting files , documents and other material

5 December (49) From KS -requesting reply

2003

16 June (50) From Cavasinni (FC) asking where are documents and where is the $300,000 5 July (51) From FC - reminder letter

1 August (52) From FC - reminder and requesting transfer of stakeholder money

19 August (53)From KS complains no response , wants to collect documents and trust ledger and statements relating to Auspower

8 September (54) From KS confirms no reply received , wants file on sale of business, trust cheque in favour of KS for $300,000 and any other documents or moneys held for Auspower. Letter acknowledges that Coleman & Greig have advised the $300,000 is held by the Solicitor as stakeholder.

The numbers in brackets are the page numbers of the letters in the exhibit to the Collins Affidavit.

55 From the evidence before the Tribunal it appears that the first response from the Solicitor to those seven letters is his letter of 8 September 2003 to Kemp Strang. This letter refers to a request for a copy of the file and requests a cheque for $1,500 to cover copying expenses at $1.00 per page and an undertaking to meet any shortfall. The Solicitor pointed out that Auspower was well aware that Mr Lucas of Coleman & Grieg had indicated "that there was no agreement between the parties to release all or any of the moneys" (ie being the $300,000 retention moneys) which he had "been advised to continue holding".

56 The complaint of Kemp Strang dated 4 March 2005 to the Office of the Legal Service Commissioner (p1 of the exhibit to the Collins Affidavit ) lists replies received by the firm from the Solicitor as follows:

8 September 2003

10 September 2003

15 September 2003

18 September 2003

14 December 2004 ; and

21 December 2004.

57 In submissions the Society specified that this complaint was a separate complaint vis-a-vis Kemp Strang the failure to communicate with Kemp Strang". On the basis of that assertion the Tribunal has proceeded to deal with the complaint as relating to communication with Kemp Strang as the new solicitors for Auspower and not relating to any failure to communicate with Mr Cavasinni who was before the ten month period commenced a former client of the Solicitor who was now , as was Auspower , represented by Kemp Strang.

58 In submissions on behalf of the Solicitor it was put that the complaint was within a very narrow compass. It was asserted

"It’s probably fair to say there was a period of delay in communicating, you wouldn’t elevate it at that point to anything higher than a matter of courtesy. He was faced with demands which were obviously unreasonable demands and it’s ultimately been conceded that they were unreasonable".

59 In so far as the demands include a demand for transfer of moneys held by the Solicitor as stakeholder to Kemp Strang it was conceded that the demands were unreasonable in the circumstances.

60 The solicitor was notified of this complaint and also the following complaint (failure to transfer the file) by the Society’s letter of 21 March 2005. In the Society’s letter of 21 April 2005 Ms Young confirmed the Solicitor’s advice to her that he maintained a lien for outstanding costs over the funds in trust.

61 After consideration of the material before it the Tribunal is not satisfied that it is appropriate to categorise the conduct of the Solicitor in failing to communicate with Kemp Strang as " a matter of courtesy". Kemp Strang had taken over the conduct of a current matter on behalf of Auspower from the Solicitor and the Tribunal finds that the Solicitor had a clear duty to respond promptly to correspondence from Kemp Strang and indeed to address with clarity issues raised by them so they in turn could fulfill their obligations to their new client Auspower.

62 Unsatisfactory professional conduct is defined in Section 127 of the Legal Profession Act 1987 in a non-exclusive definition as follows:

(2) For the purposes of this Part:

"unsatisfactory professional conduct" includes conduct (whether consisting of an act or omission) occurring in connection with the practice of law that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent legal practitioner.

63 The Solicitor’s failure to communicate continued for far too long as to be classified as discourtesy. It is not acceptable conduct by a Solicitor. If such failures were common then the profession would fall into disrepute and this would adversely effect the routine conduct of business and legal affairs and the administration of justice as well as having possible wider ramifications. In fact in circumstances such as this it could be effectively impossible for a member of the public to change solicitors and to risk the former solicitor ignoring requests for the client’s file of papers for perhaps ten months.

64 In all the circumstances the Tribunal finds that this allegation has been made out and that the failure of the Solicitor to communicate constitutes unsatisfactory professional conduct within the meaning of S 127 of the Legal Profession Act 1987.

The Seventh Complaint - Failure to transfer the file

65 The facts relating to the various allegations frequently overlap in this matter. The particulars relied upon by the Society include the extended particulars sought to be substituted by the Society in final submissions in relation to the previous allegation that is particulars 5 to 17 plus three separate particulars.

66 Particular 11 related to the Solicitor’s letter of 8 September 2003 (p55 of the exhibit to the Collins Affidavit ) which advised the file would be made available if photocopying charges were paid as detailed above and this was repeated in the letter of 10 September 2003 (p57 of the exhibit to the Collins Affidavit ) referred to in particular 13. Also on 10 September Kemp Strang asserted in a letter to the Solicitor (p58 of the exhibit to the Collins Affidavit- particular 14 ) that the file belonged to the client and that any copying charges were to the Solicitor’s account and would not be paid by Auspower. On 18 September 2003 Kemp Strang sent the Solicitor a further letter (p63 of the exhibit to the Collins Affidavit and particular 16 ) concerning the Solicitor’s failure to deliver the files and documents of Auspower to them and foreshadowed a complaint to the Legal Services Commissioner. Finally the Solicitor replied the same day (p64 of the exhibit to the Collins Affidavit ) and repeated his requirement of payment for photocopying charges.

67 On 21 July 2005 (particular 43 and p38 of the Collins Affidavit ) the Society drew the attention of the Solicitor to the fact that he appeared to have failed to respond to the complaint that he had failed to release his file and on 18 August 2005 (particular 44 and p40 of the Collins Affidavit ) the Society again wrote to the Solicitor pointing out that Kemp Strang advised that they still had not received the file.

68 On behalf of the Solicitor it was submitted in addresses on the third day of the hearing (Transcript p38) :

"The claim for a lien for unpaid costs over money fairly had to be

understood as a claim for a lien over the file as well"

The Tribunal does not accept that submission and takes the view that a claim for a lien over the documents was not raised by the Solicitor. He was at all relevant times willing to release the file upon payment of $1,500 on account of photocopying charges with an undertaking to pay any additional copying expenses. He certainly asserted a lien over the money but not over the documents. The Tribunal takes the view that the client is entitled to be told specifically if a lien was claimed over documents and this was not done.

69 The Tribunal finds there was no basis for the Solicitor to have failed to transfer the file to Kemp Strang as the new solicitors for Auspower . His failure in this regard falls within the non-exclusive definition of unsatisfactory professional conduct within the meaning of S 127 of the Legal Profession Act 1987 and that on the evidence is guilty as alleged in the second allegation of unsatisfactory professional conduct.

The Eighth Allegation - Delay in three separate circumstances to constitute one allegation.

70 The Tribunal finds that as this allegation is pleaded the same complaint is made up of three components. There are not three separate complaints but one complaint which is made up of three parts which together are presented as justifying one finding of unsatisfactory professional conduct against the Solicitor. Most if not all of the facts relevant to the three issues of delay have already been considered in the context of the allegations already dealt with in this decision.

71The particulars relied upon by the Society to establish the allegation of delay in releasing funds are:-

10.The Tribunal finds the letter of 8 September 2003 to be irrelevant to this part of the allegation . As far as delay in releasing funds is concerned the letter is a demand that the Solicitor pay out moneys he held not for Auspower but as stakeholder for Auspower and Hydraulink. The demand was inappropriate without the support of Hydraulink and it was made long prior to the determination of the EBIT .

38.The letter of 28 April 2005 establishes the first payment out of the Trust Account of $123,898.96 in relation to the interest of Auspower leaving a balance of $124,140.10 in the account held subject to the lien claimed by the Solicitor.

47.The matters particularised relate to moneys being held on the basis of the lien claimed, the assertion that the costs have been outstanding and that Mr Cavasinni has held copies of accounts for some years while the lien could not be maintained before the entitlements to funds held was determined on the EBIT calculation.

54.In relation to releasing funds the details in the particulars that are relevant appear to be the invoice to Auspower for $2226.00 and the determination as at 17 October 2005 of the quantum of the lien claimed in respect of Auspower and Cavasinni.

74.The letter of 22 May 2007 particularised details of the final payment from the funds. The evidence is that by that time the Solicitor had decided not to rely further on the lien he had claimed but to seek recovery by enforcement action once outstanding costs had been assessed.

72 Upon consideration of the matters raised in the particulars and in the evidence the Tribunal finds that it does not have "reasonable satisfaction" that the allegation had been made out as that test was described by Dixon J (as he then was) in Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336 at 362. The Tribunal finds that it was proper for the Solicitor to account for funds to Auspower initially in April 2005 once he had established the total amount of moneys that he calculated were subject to his lien . The calculation had to be done with care and took time. The Tribunal has already found that the Solicitor did not improperly assert a lien and in the circumstances the step by step way in which he made decisions and paid out moneys appears to the Tribunal, in the circumstances in which he found himself , to have been appropriate and proper. The delay alleged does not in the Tribunal’s finding constitute conduct which could properly be regarded as part justification for a finding of unsatisfactory professional conduct against the Solicitor.

73 The second part of the "delay" relied upon to form part of the unsatisfactory professional conduct alleged against the Solicitor relates to the question of delay in informing Auspower of the proposal to maintain a lien. The Tribunal finds it is proper to see this aspect of the matter in the whole context of the issues which were under consideration at the time.

74 The particulars relied upon were numbers 6-10, 37 and 54 which have been considered already in this decision.

75 There were no specific entitlements to the $300,000 held by the Solicitor as stakeholder until the EBIT was determined and the sums involved became known to the Solicitor about early January 2005. Moneys due to Hydraulink were accounted for and paid reasonably promptly. Clearly the situation of the Solicitor in relation to Auspower , Cavasinni and associated companies was complex. The Tribunal accepts the Solicitor’s evidence in relation to the late 2002 arrangements for payment of outstanding costs to the solicitor from the Auspower share of the retained funds. The Tribunal finds that by the time the EBIT calculation was determined the Solicitor had good reason to believe that those arrangements were not going to be honoured and for having a belief following the unchallenged evidence of the earlier conversations with Mr Cavasinni that he was going to be paid from those moneys.

76 The Solicitor who has been under fire throughout these proceedings has more than once claimed in effect that the complaints against him were personally motivated following his falling out with Cavasinni. Page 58 of the Collins Affidavit was admitted into evidence and its contents would appear to support the Solicitors allegations as to the means of Cavasinni. The document dated 1 November 2001 is addressed to the Solicitor on the letterhead of Cavasinni’s Accountancy etc Company . It is signed on Cavasinni’s behalf and in support of Cavasinni’s then current demand of $100M for refinancing details properties valued in the letter at $99.8M . No details of ownership are given but once more the only evidence here is from the Solicitor from which it was asserted the Cavasinni was in personal control of assets to a value of about $100M.

77 The Tribunal takes the view that the assurances that Mr Cavasinni gave the Solicitor in relation to payment would on any proper interpretation involve Cavasinni’s recognition that at the time he made the statements detailed earlier that the moneys to come to Auspower after the EBIT determination were to be used to pay the Solicitor’s fees in various matters. Whether Cavasinni thought of that in terms of a lien or a charge or some other form of entitlement in favour of the Solicitor the Tribunal is satisfied he made representations to the effect that the Solicitor would be paid from the Auspower moneys and that he was the spokesman for and controller of Auspower. In this situation the Tribunal rejects the allegation that there was delay as alleged in this part of the complaint. The Tribunal does not consider that the conduct particularised could properly be considered to be unsatisfactory professional conduct on the part of the Solicitor.

78 The final sub-complaint under delay is that the Solicitor did not until 28 April 2005 provide the alleged accounts. Particulars relied upon by the Society are :

Letter from Kemp Strang dated 27 May 2005 which is after the date referred to in the allegation. The letter was submitted on the basis that it was evidence that it had been sent but not as evidence as to the truth of its contents. The Tribunal finds that the way the matter is pleaded the conduct complained of was completed on 28 April 2005 so this letter does not advance the Society’s allegations.

The letter dated 2 September 2005 is again dated well after the date the conduct complained of was completed. The letter is from the Solicitor and alleges that Mr Cavasinni has held copies of the account since 2002 or 2002. That is the evidence , there is no evidence from Mr Cavasinni on this or any other matter and he is undoubtedly a crucial witness if the Society were to challenge the clear evidence of the Solicitor. The Tribunal accepts that the Manulti account was provided after 28 April 2005 but does not in the overall context regard that as of sufficient importance to justify the bringing of this part of the complaint.

This refers to the Declaration of the Solicitor dated 17 October 2005. A memorandum of costs and disbursements to Auspower was sent with the Declaration by the Solicitor. This account for $2,226.00 and does not fall into the area of accounts "delayed" until 28 April 2005 and in the finding of the Tribunal falls outside the allegation.

79 The Tribunal has considered the particulars supplied and the evidence given and the Tribunal is satisfied that no case has been established against the Solicitor on this the third sub-ground of the "delay in providing alleged accounts" allegation. Accordingly none of the three matters alleged in the eighth allegation have been established to the Tribunal’s reasonable satisfaction and the eighth allegation is dismissed.

Conclusion

80 At the conclusion of oral submissions on 6 June 2008 completion of submissions was deferred until after the transcript became available with each party then having 14 days to make submissions which were filed on 17 & 18 July 2008 while each party then had a further 14 days to reply so that submissions on the allegations against the Solicitor closed on 1 August 2008.

81 On behalf of the Solicitor a request was made on 6 June 2008 that when the decision on the complaints against the Solicitor was made that there be an opportunity for oral submissions as the submissions would inevitably be entirely different if a finding of professional misconduct were made than they would be if a finding of unsatisfactory professional conduct were made.

82 The Tribunal accepted the request and indicated that if an adverse finding was made against the Solicitor that the matter would be relisted for oral submissions on the appropriate orders to be made in consequence of the findings . The matter is accordingly to be relisted by the Registrar at the first reasonably convenient date after the publication of this decision.