SUPREME COURT OF QUEENSLAND

1. de JERSEY CJ: After approximately fifteen years practising in Queensland as a solicitor, the applicant was on 28 July 1987 struck from the roll of solicitors by the Statutory Committee of the respondent.  He now applies to be re-admitted as a solicitor of this Court.

2. The Statutory Committee held that the applicant had been guilty of professional misconduct on the basis of three defalcations which occurred in 1986: essentially, he misappropriated for his own use moneys held on trust for others. The three allegations established before the Statutory Committee were these.

Bromley

“Between 19 March 1986 and 20 March 1986 Mr Janus, being a Solicitor, received the sum of $27,000.00, as a trustee for Stanley Bromley and Sarah Ellen Bromley and on or about 21 March 1986 he knowingly and without authority and in breach of the terms of the trust applied the sum of $27,000.00 to his own use by paying it or causing it to be paid to or to the credit of Europacific (Investments) Pty Ltd.

PARTICULARS

1. Mr Janus acted as solicitor for Stanley Bromley and Sarah Ellen Bromley in respect of their purchase of land from a company (of which he was a director and for which he acted as solicitor in the transaction) for a price of $30,000.00.

2. The sale has not been completed.

3. Between 19 and 20 March 1986 Mr Janus received into his trust account (and credited to a particular trust ledger) $27,000.00 provided by the purchasers on account of the purchase price.

4. On 21 March 1986 Mr Janus paid out $27,000.00 from his trust account (and debited this payment to the same trust ledger) and paid it or caused it to be paid to Europacific (Investments) Pty Ltd for his own use or benefit.  The payment was made without the instructions or consent of the purchasers or either of them.”

Ratcliffe

“On 7 May 1986 Mr Janus, being a solicitor, received the sum of $39,859.46 as a trustee for Lilian Margaret Ratcliffe and on or about 8 May 1986 he knowingly and without authority and in breach of the terms of the trust applied the sum of $39,859.46 to his own use by paying it or causing it to be paid to or to the credit of Europacific (Investments) Pty Ltd.

PARTICULARS

1. Mr Janus acted for the vendor (Lilian Margaret Ratcliffe) and purchasers in respect of the sale of a house and land for $44,000.00.  The contract of sale provided that settlement would be effected within seven days of registration of transmission by death of title to the land to the vendor.  Settlement took place on 7 May 1986, before this transmission by death was registered.

2. On settlement Mr Janus received the sum of $39,859.46 from the purchaser’s bank on account of the purchase price.  On or about 8 May 1986, Mr Janus paid this sum to the credit of a bank account in the name of Europacific (Investments) Pty Ltd for his own use or benefit.

3. The payment was made without the instructions or consent of the vendor.”

Dayton/Lenton

“On 25 March 1986 Mr Janus, being a solicitor, received the sum of $35,000.00 as trustee for Dayton Investments Pty Ltd (in its capacity as trustee of the Lenton Family Trust) and Gunco Pty Ltd and on 20 June 1986 and 23 June 1986 he knowingly and without authority and in breach of the terms of the trust applied, respectively, the sum of $35,000.00 and interest amount to $1,302.47 accrued thereon (which was also subject to the trust) to his own use by paying it or causing it to be paid to or to the credit of Europacific (Investments) Pty Ltd.

PARTICULARS

1. Mr Janus acted as solicitor for Dayton Investments Pty Ltd as trustee for the Lenton Family Trust in respect of the sale of a newsagency to Gunco Pty Ltd for a price of $310.00.00.  Settlement of the sale was to (and did) take place on 30 June 1986.

2. On 25 March 1986 Mr Janus received the deposit moneys of $35,000.00 into his trust account.  On 26 March 1986, he invested this sum in a term deposit account with a bank in the name of his firm.

3. On 20 June 1986 Mr Janus closed this account and paid (or caused to be paid) its proceeds as follows: 

4. These payments were made without the instructions, consent or authority of the vendor or purchaser or either of them or anyone acting on behalf of either of them.”

3. The hearing before the Statutory Committee proceeded in the absence of the applicant. The applicant was represented by a solicitor, but only to the extent of the solicitor seeking an adjournment of the hearing on the ground of the applicant’s ill health. The Committee refused to adjourn the hearing, and the solicitor then withdrew. The Committee then proceeded with the hearing and ultimately struck the applicant’s name from the roll. The applicant appealed to the Full Court on grounds including the contention that the Committee should not have denied an adjournment. He did not however proceed with that appeal – it is said because of ill health.

4. The applicant was subsequently charged with the commission of criminal offences in respect of the matters of Bromley (converting trust property) and Dayton/Lenton (misappropriation). He pleaded guilty to those charges, and he was on 23 March 1989 sentenced in the District Court to concurrent terms of three years imprisonment with the recommendation that he be released after serving one year. The applicant served that year, and was released from custody on 23 March 1990. The terms of the criminal charges follow.

Bromley

“[O]n or about the Twenty-first day of March, 1986, at Brisbane in the State of Queensland, WALTER CORNEILLE CLEMENT MARIE JANUS being then a trustee of certain property, namely, $27,000.00 for the benefit of one STANLEY BROMLEY and another, converted the same to a use not authorised by the trust on which the said WALTER CORNEILLE CLEMENT MARIE JANUS held the said property, with intent thereby then to defraud.”

Dayton/Lenton

“[B]etween the Twentieth day of June, 1986 and the Twenty-third day of June, 1986 at Brisbane in the State of Queensland, WALTER CORNEILLE CLEMENT MARIE JANUS dishonestly applied to the use of EUROPACIFIC (INVESTMENTS) PTY LTD a sum of money namely $36,301.47 belonging to one ROBERT JOHN LENTON and that the said sum of money had come into the possession of the said WALTER CORNEILLE CLEMENT MARIE JANUS subject to a trust.”

5. The scope of those charges may be gathered conveniently from the sentencing remarks of McGuire DCJ:

“As regards count 1, the complainants, Mr and Mrs Bromley, were a retired couple.  They purchased a block of residential land which was part of a subdivisional scheme you were responsible for developing.  The land was subject to mortgage.  The Bromleys paid $20,000 to the real estate agent.  $17,000 was paid to your trust account.  It was deposited in your trust account on 20 March 1986.  A further $10,000 was paid directly to you.  It was deposited in your trust account on 19 March 1986.  The $27,000 paid to you by the Bromleys was transferred from your trust account to the account of Europacific Investments Pty. Ltd.   You were a signatory of the Euro account.  Actually, it was struck off the Register of Companies on 4 March 1986.  The $27,000 was then disbursed from the Euro account by 10 payments between 21 March and 2 April 1986.  The payments were made to parties other than the complainants.  The nett result of these manipulations was that the mortgage on the loan (sic) was not discharged and the Bromleys did not receive title to the land.

They complained to the Queensland Law Society on 17 July 1986.  The Society paid out the mortgage from its indemnity fund and the Bromleys obtained title to the land in early 1988, some two years later than they should have.

As regards count 2, the complainant Robert John Lenton sold his newsagent business for $350,000.  You acted as his solicitor in connection with the sale.   $35,000 was paid by the purchaser by way of deposit.  This was banked into your trust account on 25 March 1986.  The money was to be invested pending settlement.  This was done.  The settlement date was 30 June 1986.  The purchase moneys were paid over to Lenton save for the $35,000 and the interest accrued thereon.  On 20 June 1986 you withdrew the $35,000 and the interest accrued thereon.  On 20 June 1986 you withdrew the $35,000 from your trust account in the form of a bank cheque payable to Europacific.  Interest of $1,301.40 on that sum was also paid into the Euro account.  On the same date, 20 June 1986, you drew a cheque in favour of one MacDonald, a client of yours, in respect of an altogether different transaction. You did offer to pay Lenton $27,000 but Lenton would not accept it.  He complained to the Law Society.  The Society paid Lenton in full from its indemnity fund. 

In the result, you defrauded the complainants of a total of $63,301.47.”

The fact of these criminal convictions is not of course conclusive against the applicant’s being readmitted to practice (Ziems v The Prothonotary of the Supreme Court of New South Wales (1957) 97 CLR 279).  Although much of the applicant’s material dwelt on these charges, they are really ultimately of only incidental relevance to the particular issue before this Court.

6. At the time of committing these defalcations, the applicant was suffering from what the medical experts consider was a severe depressive illness, variously particularised as a manic depressive psychosis (Drs Mulherran and Osborne), subpolar manic depression (Dr Theodorus), bipolar manic depression (Dr McCarthy), or bipolar 2 disorder in the setting of a cyclothymic disorder (Dr Mulholland). The condition was such as to cloud the applicant’s judgment, and contribute to his acting as he would not ordinarily act. The adverse condition was brought under control by medication from which he was later weaned.

7. All of the expert medical opinion is that the illness is now under control and that any risk of recurrence is low, indeed, according to Dr Theodorus and the clinical psychologist Mr Walsh, “extremely low”. Dr Mulholland put the likelihood of recurrence at 5%. The unchallenged medical opinion before this Court is that the applicant is now “well capable of coping with the day to day exigencies of a solicitor’s practice”. This is based on the applicant’s capacity to identify the symptoms of his problems should they reappear, and his awareness of what he should then do to alleviate them.

8. The applicant is supported in this application by favourable references from some eighteen persons, including solicitors with whom he has had contact in commercial dealings, medical practitioners and family friends. He has been involved commendably with community organisations. Since his release from prison, he has at a commercial level been involved with the Australian Franchise Association, a national support group for franchisors and franchisees, and has conducted his own business consultancy practice.

9. The applicant has progressed substantially since the time of his sentencing, when the learned sentencing judge described him as a “broken and contrite man”. There is no doubt he has suffered enormously in consequence of his misconduct, significantly in terms of family relationships, and one should note the inevitable suffering of the members of his family, a matter to be regretted deeply. The issue to be addressed now is however more broadly related to the public interest.

10. Against that background of circumstances which might be felt to avail him now, the applicant raises before this Court factual matters which he urges warrant his “complete exoneration” in respect of Bromley and Ratcliffe, and that his involvement in Lenton be viewed less seriously now than previously. The respondent on the other hand contends that the applicant’s approach in that respect reflects “ethical blindness”, suggesting that he “continues to be a person who is unable to see that his conduct was wrong”.

11. The issue to be addressed now is whether in all the circumstances the Court is justified in putting the applicant before the public as a fit and proper person to follow the honourable calling of solicitor. See Re Bell (Full Court Motion No. 622 of 1991, 6 December 1991, unreported); Re Currie (Full Court Motion No. 417 of 1990; 8 March 1991, unreported); Re Taylor [1997] 1 QdR 533; Re Thomas [1984] 2 QdR 460; Wentworth v New South Wales Bar Association (1992) 176 CLR 239, 254; Re B [1981] 2 NSWLR 372, 370-383; Re Davis (1947) 75 CLR 409,426.

12. One should in this inquiry focus on the applicant’s intrinsic character, and not be unduly distracted by his good fame, whether within the legal tradition or the wider community (cf Re Bell, supra, p5 per Williams J as he then was).  The burden of establishing that he should be readmitted falls, unsurprisingly, on the applicant, and the extent of that burden was described in Re Morrison (1961) QdR 343, 348-9 (as confirmed in Re Thomas [1984] 2 QdR 460, 466):

“When a person applies for re-instatement, he is in a more disadvantageous position than an original applicant because he must displace the decision as to probable permanent unfitness which was the basis of his removal.  (Ex parte Lenehan (1948) 77 C.L.R. 403 at 422.)”

13. It is necessary to embark on a somewhat closer examination of the circumstances of the three matters mentioned above, the Bromley, Ratcliffe and Dayton/Lenton matters, and a fourth, raised by the applicant himself, concerning observations, relevant to the present context, and unfavourable to the applicant, made by Drummond J in Magic Menu Systems Pty Ltd and Ors v AFA Facilitation Pty Ltd and Janus (1996) 137 ALR 260.

14. The first three matters involved the applicant’s investing moneys in the company Europacific (Investments) Pty Ltd. As the applicant has admitted in writing, he was the sole signatory in relation to that company’s bank accounts, and its effective controller. The company was at material times deregistered.

Bromley

15. On 7 February 1986 Mr and Mrs Bromley entered into a contract with Winjan Pastoral Company Pty Ltd, of which the applicant was “sole proprietor”, for the purchase from Winjan of an allotment in a subdivision it was developing at Tweed Heads. The settlement was to occur upon the completion of the sale of the Bromleys’ Ebbw Vale property, or after 182 days, whichever should first occur. The Tweed Heads land was mortgaged to AGC (Advances) Ltd.

16. The purchase price of $30,000 was paid in this way. A deposit of $3,000 was paid, upon the signing of the contract, into the trust account of the real estate agent. Another $17,000 was paid to that agent on 7 March 1986. The balance of $10,000 was due to be paid upon settlement. On 7 March 1986 the Bromleys authorised the agent to pay the $20,000 ($3,000 plus $17,000) less selling expenses to Winjan. That was done. Then on 19 March 1986, prior to “settlement”, the Bromleys paid Winjan the balance purchase moneys of $10,000.

17. That was highly unusual, in that the Bromleys did not then in return obtain registered title. In the end, the Law Society paid out AGC’s mortgage in order to facilitate the passing of title to the Bromleys.

18. The applicant subsequently resisted a claim that he should reimburse the Fidelity Fund, on the basis of a contention that the Law Society erred in paying out the debt to AGC. The applicant’s point, to which he still holds, is that the Bromleys should have given Winjan notice requiring settlement. Had that been done, he contends, Winjan would itself have paid out the mortgage and conveyed title to the Bromleys.

19. The applicant clung to the view before this Court that he did no wrong in relation to this matter. His view is unsustainable.

20. The contract signed in the applicant’s presence by the Bromleys named, as their solicitors, the applicant’s firm or its agent. The applicant contends however that he could not have acted as their solicitor in the matter because it involved a New South Wales transaction.

21. But the Bromleys certainly considered the applicant was acting as their solicitor; they sought him out, attending in person at his office in order to hand over the cheque for $10,000. Arguably he could only have received that money before settlement as trustee or solicitor for the Bromleys. It fell to the applicant, in light of the form of the contract, of which he was aware, to disabuse them, if he was indeed unprepared to act, and further, to advise them that they should retain the services of other solicitors.

22. As it was, even if only putatively the Bromleys’ solicitor, the applicant allowed them to pay over the full purchase price, which he then applied through Winjan to his personal use by investment in Europacific (Investments) Pty Ltd, without their gaining title, and on specious grounds resisted the Law Society’s perfectly reasonably subsequent demand that he reimburse the Fidelity Fund.

23. Although at one stage during his oral evidence before this Court the applicant conceded he should have referred the Bromleys to other solicitors, the position to which he held fundamentally was that he had done nothing wrong in the transaction. He thereby betrayed a lack of proper appreciation of clear ethical responsibility.

24. I agree with the observations made by Williams JA, in his reasons for judgment, in relation to what Drummond J said of this transaction, in the proceedings in the Federal Court to which I later refer.

Ratcliffe

25. The applicant acted as the solicitor for both the vendor, Mrs Ratcliffe, who was executor of a deceased estate, and the purchasers, Mr and Mrs Smales. The contract was subject to a condition that transmission of title to Mrs Ratcliffe (following the death of the registered proprietor) be registered, with settlement seven days after registration. The transaction was settled on 7 May 1986, at a time when transmission by death had not been registered. The applicant received the purchase moneys. He paid them to his own use, by investment in Europacific (Investments) Pty Ltd.

26. The case against the applicant was described in these terms before the Statutory Committee by Counsel for the Law Society:

“On the Ratcliffe matter, I would like to remind the Committee that not only was the money paid out here without the authority of the clients for the practitioner’s own person benefit, but also in fact the moneys were never paid into trust in the Ratcliffe matter.

What has happened is that the practitioner has simply received funds from the purchasers for whom he was also acting in that transaction on behalf of the vendors and rather than paying the money into trust and then ultimately accounting to the vendors, he has not paid it into trust and has paid it directly into a bank account maintained at the ANZ in the name of Europacific (Investments) Proprietary Limited for his own benefit.  Those moneys which are in question were moneys paid by the purchasers who were also his clients on the basis that he would hold the moneys in trust pending the settlement of the transaction.  Contrary to that trust he has failed to pay it into his trust account and applied it for his own benefit.”

27. The circumstance upon which the applicant relies for his claimed “complete exoneration” in relation to this matter is an authority dated 7 May 1986, the date of settlement, signed by Mrs Ratcliffe, authorising the investment of the money in Europacific. That authority was not in evidence before the Statutory Committee. In his submission to this Court, the applicant contended that this transaction was therefore “no longer relevant”, a related criminal charge having been withdrawn apparently in light of the discovery of the authority. But in taking that position the applicant again displayed a lack of proper appreciation of his ethical culpability.

28. Mrs Ratcliffe’s capacity to convey title depended on registration of the transmission to her. As at “settlement” on 7 May 1986, the Smales did not gain registered title. Although as the applicant suggested before this Court, registration of the transmission by death may have been a “formality”, it had not by then occurred, and the Smales parted with the balance purchase moneys without securing that for which they had bargained. Significantly, although Mrs Ratcliffe may have authorised the investment of the money then effected by the applicant, the Smales had not. In the result, the Smales lost control over the purchase moneys in circumstances where they may, conceivably, have had to be repaid. The applicant’s oral evidence before this Court suggested that although being the solicitor for the Smales, he was presently unconscious of any duty to protect their interest in funds in those circumstances where, though having paid the moneys, they had not secured registered title to the land.

29. Also highly significant, although the applicant secured Mrs Ratcliffe’s authority, he had not properly disclosed to her his personal interest in Europacific, as conceded in these terms during his interview on 4 July 1986 with the Law Society representative:

“I had organised a transaction for a lady, L. Ratcliffe of Milton, and had persuaded her about two months ago to invest money.  I paid into Euro-Pacific about $39,000 for my benefit.  She did not know it was going for my benefit.  I offered her 18%.  I told her I would invest with A.N.Z. which was a white lie as Euro-Pacific bank with A.N.Z.”

30. Other statements made by him during that interview indicate that he was then in personal financial difficulty. The authority signed by Mrs Ratcliffe authorised the investment, but not so as to benefit the applicant personally.

31. The applicant’s obligation to disclose his own interest in the matter was extensive and uncompromising. It is helpful to refer to these observations by Street CJ in Law Society of New South Wales v Harvey [1976] 2 NSWLR 154, 162-3 in relation to broadly similar circumstances:

“…  while it is not possible for us to be sure as to whether or not, in some cases, the defendant gave somewhat fuller information concerning the proposed investments and, while, in the majority of cases probably, clients were aware, or made aware, that the loan was to a company of which the defendant was a director or in which he had an interest, it is abundantly clear that clients generally were not given any real understanding of the investment proposed, or already made, of their money or the risks involved or of the real interest of the defendant.  It is clear that very many of his clients looked to the defendant and trusted him as a solicitor, and a man connected with church activities, and, in an uninquiring fashion, looked to him and depended upon him to deal fairly with them and with integrity and skill to apply their moneys in a way which would be in their best interests.”

32. When strongly challenged through cross-examination before this Court in relation to his claim to have been “exonerated” of any ethical reproach, in light of Mrs Ratcliffe’s “authority”, the applicant ultimately conceded that it was prima facie wrong for a solicitor to borrow from a client, and that he should have taken the precaution of ensuring that Mrs Ratcliffe was independently advised. The question arises however whether these concessions were not made opportunistically. That he chose to approach the Ratcliffe issue in this way – a withdrawal of the criminal charge negating any suggestion of ethical breach – may perhaps in some people have been an understandable immediate reaction to withdrawal of the charge; but it could hardly be one which could sustain analysis within the ethical context, especially in light of the extent of the burden presently borne by the applicant (cf Morrison, supra).

33. The applicant’s treatment of this matter left me without reasonable assurance that he conscientiously appreciated its ethical complexion.

34. Dayton/Lenton

The applicant contends that his involvement in this transaction should now be regarded less seriously than previously: he swore as much in his affidavit of 5 March 1998.  He swore also that “cogent and incontrovertible evidence” obtained subsequently to his plea of guilty in the District Court meant that that plea was “capable of being impugned”.  He more or less conceded in his oral evidence before this Court that those contentions involved a degree of over-statement.

35. The transaction concerned the sale of a newsagency business, in March 1986, by “Dayton Investments Pty Ltd for the Lenton Family Trust”, or possibly Mr and Mrs Lenton personally, to Gunco Pty Ltd, for the sum of $350,000. (The stamped contract refers to the Lentons as the vendors, but gauging relevant ethical responsibility, any conflict on this point is immaterial.) The applicant acted for the vendor. A deposit of $35,000 was paid to the applicant for investment on interest bearing deposit with a bank or building society. Settlement took place on 30 June 1986. The applicant failed to account to his client, the vendor, for the deposit moneys of $35,000. The applicant had invested those moneys on interest bearing deposit with a bank, as contemplated by the contract, but had withdrawn them shortly prior to the due date for the maturity of the investment, and prior to settlement, then paying the moneys to his own use to the credit of Europacific (Investments) Pty Ltd.

36. The applicant dealt with the problem as follows during his interview by the Law Society representative:

“$35,000 was invested on behalf of the vendors with interest to be shared by both parties.  It was invested with National Bank on 26th March, 1986, in accordance with a letter dated the 29^th May, 1986 …

I withdrew the monies about three or four days before maturity.  I paid it to Euro-Pacific Investments to meet a commitment of my own.  It did not go through the trust account.  I did not obtain authority from the Lentons or any of their companies.  It was money I owed to Euro-Pacific personally.  This is an overseas firm from which I had borrowed money from time to time to keep things afloat.”

37. In view of the applicant’s oral evidence before this Court, that account should be accepted as amounting to the truth, notwithstanding the applicant’s medical condition at the time in 1986 and some limited expression of reservation in his oral evidence before this Court.

38. The grounds on which the applicant relied to reduce his ethical culpability in relation to this matter were technical in nature, and largely concerned with peripheral or irrelevant aspects. That he raised them in the course of these proceedings hardly did him credit. Rather, it suggested he lacked proper insight into the relevant ethical considerations.

39. The Lentons were reimbursed the sum of $35,000 due to them from the Law Society’s Fidelity Fund. The Law Society sought that amount from the applicant. The applicant resisted the claim, contending that the Law Society should not have made the payment to the Lentons. The highly technical nature of the points he raised may be seen from his affidavit sworn 8 March 1989, Exhibit 1.

40. The applicant continues to rely on similarly technical points, as may be seen from his affidavit sworn 5 March 1998. That approach was out of place in the present context. The applicant even clung to the possibility that the $35,000 may have been his own moneys, but that was without any substantial evidentiary support.

41. Significantly also, when in 1992 the applicant applied to the Federal Court under s 229(3) of the Corporations Law for leave to manage a corporation, he sought to excuse his misappropriation of the sum of $35,000 on the basis that he was satisfying a requirement in relation to his general trust account arising from s 10 of the Legal Assistance Act.  What the applicant failed then to disclose to the Federal Court was that he had in fact misapplied those moneys to his own use.

42. The Law Society issued proceedings in the Supreme Court against the applicant in January 1989 to recover $17,058.20, the balance of the moneys paid out of the Fidelity Fund which the applicant had not by that stage repaid. That was the residual amount owing after allowing for payments made to all parties who had suffered because of the applicant’s defalcations, including Dayton Investments Pty Ltd to the extent of $35,000. Judgment was given in the Supreme Court against the applicant, for the amount of $17,058.20, on 8 March 1989.

43. The applicant failed to satisfy that judgment. The Law Society was driven to commencing bankruptcy proceedings against the applicant, which the applicant successfully resisted. That notwithstanding, the judgment remains extant and unsatisfied. The applicant’s answer to a suggestion before this Court that he should have discharged that debt was to the effect that the Law Society had made no further demand upon him. There may be any number of explanations for that. Plainly, as the judgment debtor, especially in his current position, it fell to the applicant to seek out his creditor. (We were urged, if otherwise inclined to readmit the applicant to practice, to consider imposing a condition requiring satisfaction of that judgment debt.)

44. The applicant’s technical and defensive approach to this matter, which he maintains to this day, suggests an obduracy which is inconsistent with a healthy appreciation of the proper ethical approach.

45. Magic Menu Systems

In this litigation, certain former franchisees sought an injunction restraining AFA Facilitation Pty Ltd and the applicant, who was a director of that company, from engaging in conduct amounting, as it was alleged, to champerty and maintenance.  Drummond J found that they were engaged in such conduct, but dismissed the claim on the ground that the applicants could not, as necessary, demonstrate that they had suffered special damages.

46. Drummond J made observations of a character uncomplimentary in relation to AFA Facilitation and the present applicant:

“Refusal of injunctive relief does not, of course, mean vindication of AFA Facilitation or Mr Janus…  The way AFA Facilitation has been deliberately constituted to be a legally separate entity from the AFA organisation run under the aegis of The Australian Franchisee Association Ltd, coupled with the fact that this was done to enable it to pursue its object of earning profits for itself and that it provides no financial support to that trade organisation show, in my opinion, that AFA Facilitation has no interest which it shares with AFA members sufficient to make its support of their litigation lawful.”

47. In drawing this Court’s attention to this matter, the applicant contended that His Honour’s views, although justified on the evidence before him, would not withstand a broader context including further evidence now available, in particular a licence and services agreement between AFA Facilitation and the Australian Franchise Association Limited – evidence not put before His Honour. There is no need to explore this complicated issue further, in order to resolve the present application.

48. Conclusion

As would already be clear, I am not satisfied that the applicant has discharged his substantial burden of proof.   He has not shown that he should be put before the public as a fit and proper person to follow the honourable calling of solicitor.  Regrettably, he continues to be a person who is unable to see that his conduct was wrong.  His admission would result in danger to the public by reason of his ethical blindness.

49. I would order that the application be dismissed, and that the applicant pay the respondent’s costs including any reserved costs to be assessed.

50. WILLIAMS JA:  The circumstances in which the applicant seeks readmission as a solicitor of this Court are fully set out in the reasons for judgment of the Chief Justice which I have had the advantage of reading.  In the circumstances there is no need for me to record the basic facts.  I agree with the reasoning of the Chief Justice but wish to add some additional observations.

51. The applicant relies heavily on a number of affidavits from legal practitioners and other responsible people in the community deposing to the fact that in the deponent's opinion the applicant is a fit and proper person to be admitted as a solicitor. No doubt each of those views is reasonably held. However, this Court has had the advantage, not available to those deponents, of hearing the applicant intensively cross-examined as to his present comprehension of the conduct which led to his being struck off. Having witnessed that cross-examination, and having read the material placed before this Court, I have come to the conclusion that the applicant still does not fully appreciate the significance of his conduct in the three transactions which were the subject of the decision of the Statutory Committee in 1987. The applicant has not satisfactorily addressed his offending behaviour and in consequence he has not discharged the onus of satisfying this Court that there is justification for putting him before the public as a fit and proper person to practice as a solicitor.

52. The applicant also sought to make much of an observation by Drummond J of the Federal Court as follows:

"The material indicates that there is a very real doubt indeed as to whether Mr Janus was in fact guilty of any criminal offence in relation to the Bromley matter".

That was said in the course of a judgment (WCCM Janus v Australian Securities Commission, No QG 3016 of 1992, 17 November 1992) on an application by the applicant for leave pursuant to s 229(3) of the Corporations Law to manage a corporation.  The applicant placed extensive affidavit material before the court in support of that application, and due notice of it was given to the Australian Securities Commission. The response of the Commission was that it neither supported nor opposed the application and did not appear at the hearing.  That meant that the applicant's material was not contested.

53. In the judgment Drummond J analysed the evidence before him, particularly with respect to the Bromley transaction, and appears to have accepted the gloss placed on the material facts by the applicant. His Honour was able to make the finding:

"In accordance with the contract of sale, a sum of $27,000 was paid by or on behalf of the Bromleys, which sum ultimately found its way into Mr Janus' trust account on account of his company.  The material before me indicates that those funds belonged to Mr Janus' company at all relevant times".

The material available to this Court leads me to a contrary conclusion.  The findings of Drummond J disregard the evidence that the applicant was also the solicitor for the Bromleys (at least in some respects) and that he appropriated the monies to his own use before the sale was completed.  In the circumstances the observation by Drummond J affords no assistance to the applicant in seeking readmission.

54. It does the applicant no credit to have to record that one of the principal submissions on his behalf on this application with respect to the Bromley transaction was that the money was deposited into his trust account when, as his company was entitled to the funds, it was unnecessary to do so. The material clearly establishes that at all material times neither the applicant nor Winjan Pastoral Company Pty Ltd had a legal entitlement to those funds.

55. Further, and finally with respect to the Bromley transaction, the applicant sought to gain comfort from the fact that a trust account audit dated 30 May 1986 disclosed no impropriety with respect to it. The applicant now asserts that if that report was before the Statutory Committee a different conclusion might have been reached. There is no substance in the contention. Again, it evidences a lack of understanding of the ethical issues involved in the transaction from a solicitor's point of view.

56. As noted by the Chief Justice in his reasons, the applicant asserts virtually complete exoneration with respect to the Ratcliffe transaction because an authority came to light after the matter had been dealt with by the Statutory Committee. But that authority cannot justify the conduct of the applicant. His present assertion that the authority exonerates him again demonstrates a lack of insight as to the true position.

57. In his affidavit material before this Court, and indeed throughout his cross‑examination, the applicant sought to place a construction on the Dayton/Lenton transaction which would exonerate him from any wrongdoing.  Such a construction is so completely at odds with the documentation that it can only be described as fanciful.  Maintaining such an explanation in the face of overwhelming documentary evidence further indicates lack of insight.

58. In all the circumstances I agree with the order proposed by the Chief Justice.

59. MACKENZIE J:  The Chief Justice's reasons, which I have had the opportunity to read in draft form, analyse sufficiently the issues raised by the applicant in support of his readmission as a solicitor.  It is therefore unnecessary to repeat that detail. 

60. The most convenient starting point for expressing my conclusion is reference to the principles applying to the case. Re Currie (M417 of 1990, unreported) was a case where the applicant suffered from manic depressive illness, was legally insane at the time of the transactions for which he was struck off, had recovered to a symptom free state, but the possibility of relapse could not be excluded.  The test for readmission was said to be whether in all the circumstances the court was justified in putting the applicant before the public as a fit and proper person to follow the calling of a solicitor.  The Full Court decided that it was not possible to do so in the circumstances of the case, but added that the decision should not be taken as indicating that a person suffering from a condition clinically similar to that of the applicant must always be thought unfit to practice.

61. Re Bell (M622 of 1991, unreported) involved a solicitor who was, at the time of the transactions for which he was struck off, prone to episodes of hypomania, but by the time the application for reinstatement was heard, some 15 years later, was no longer suffering from any psychiatric disease or significant psychological disorder.  He was no more likely to reoffend than the average person.  Bell was readmitted. 

62. The evidence concerning the present applicant's condition at the time of the offences to which he pleaded guilty is set out in the Chief Justice's judgment. The respondent was prepared to proceed on the footing that there was no challenge to the fact of the applicant's illness at the time of the events which led to his being struck off, nor to evidence that his condition was now relevantly under control. In that regard the case resembles Bell rather than Currie.  However, the opposition to the application was based on other factors which Mr Sofronoff QC characterised as an assessment of the applicant's depth of remorse, his comprehension of wrongdoing and whether he had adequate ethical and legal sense to be permitted to practice as a solicitor. 

63. In addition to the authorities referred to above, reference should be made to Re Morrison [1961] QdR 343 at 348-9 where it is established that the onus lies on the applicant to establish that he is a fit and proper person to be admitted as a solicitor and that:

"When a person applies for reinstatement, he is in a more disadvantageous position than an original applicant because he must displace the decision as to probable permanent unfitness which was the basis of his removal.  (ex parte Lenehan (1948) 77 CLR 403 at 422)."

64. These statements were applied by the Full Court in Re Thomas [1984] 2 QdR 460, 466.  It is also noted that the possibility of readmitting the applicant subject to conditions was raised.  It is unnecessary to explore the authorities in that regard because of the conclusion that in all the circumstances the applicant has failed to discharge the onus of proving that he may be readmitted. 

65. The court had the opportunity of hearing evidence consisting of cross-examination of the applicant in considerable detail concerning the relevant transactions and his current understanding of their nature and quality. In the end, it is a matter of impression whether the applicant may be put before the public as a fit and proper person to carry on the profession of a solicitor. Regretfully, my firm conclusion is that the applicant has not established this.

66. The relevant transactions are analysed in the reasons of the Chief Justice. I agree with his analysis. I also agree with Williams JA's additional comments concerning Drummond J's remarks in Janus v Australian Securities Commission. After hearing cross-examination of the applicant, I am satisfied that there remains a lack of insight into and acceptance of the nature and quality of those transactions, even in the face of compelling objective evidence contrary to positions maintained by him.  Because of the apparent continuing lack of appreciation in those regards, I am satisfied that he has not discharged the onus upon him and the application must be dismissed.  I agree with the order proposed by the Chief Justice.