Papua New Guinea Law Reports - 1987
[1987] PNGLR 38
N585
PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]
THE COUNCIL OF LEGAL EDUCATION
V
DAVID STEWART AWAITA
Waigani
Kapi DCJ
18 August 1986
26 August 1986
29 April 1987
LAWYERS - Right to practise - Suspension “for good cause” - Onus of proof - Period of suspension - Role of lawyers - Lawyers Act (Ch No 91), s 13.
The Lawyers Act (Ch No 91), s 13, provides that the court may on motion of the Council of Legal Education “and for good cause shown”, order that a lawyer’s right to practise be suspended for a specified period.
Held
(1)      On an application under s 13, the onus is on the Council of Legal Education to show “good cause”.
(2)      The period of time for which a lawyer’s right to practise may be suspended is within the discretion of the court.
(3)      “Good cause” was established in circumstances where a lawyer had misappropriated clients’ money, paid clients’ money to the wrong person without instructions, breached the Trust Accounts (Lawyers) Regulations and failed to pay a court fine and the lawyer ought to have his right to practise suspended for six years.
Discussion of the role of the lawyer in the legal system.
Cases Cited
Jones v National Coal Board [1957] 2 QB 55; [1957] 2 WLR 760; [1957] 2 All ER 155.
State, The v Mark Taua; Re Awaita [1985] PNGLR 179.
Notice of Motion
This was an application under s 13 of the Lawyers Act (Ch No 91), to suspend the right to practise of a lawyer.
Counsel
T Griffiths, for plaintiff.
D S Awaita, in person.
Cur adv vult
29 April 1987
KAPI DCJ: This is an application by the Council of Legal Education to suspend a lawyer from practising law in Papua New Guinea for a period of three years.
The application is made in accordance with s 13 of the Lawyers Act (Ch No 91). Under this provision, the Council may either apply to have a lawyer suspended from practice, or, alternatively, remove the name of a lawyer from the roll “and for good cause shown”. In this matter, the Council has applied to have Mr Awaita suspended for a period of three years.
In an application such as this, the onus is on the Council to show “good cause”. The Council has relied upon a number of grounds. They are:
(a)      Improper conduct on the part of Mr Awaita.
(b)      A breach of the provisions of the Trust Accounts Act (Ch No 287).
(c)      Conviction of contempt of court and non-compliance with an order for a fine.
The evidence called by the Council in respect of these three matters was not contested at all by Mr Awaita. I will deal with each of the grounds in the order set out above.
IMPROPER CONDUCT AS A LAWYER
In this regard, complaints relate to the conduct of the defendant in relation to two clients he acted for.
In September 1983, a real estate agent, Mr Jack Clunn purported to sell a property, lot 23, section 16, at Casurina Avenue, Hohola. This property belonged to a Miss Claire Martin. Mr Jean Baptiste Martin offered to purchase this property. A purchase price of K18,000 was agreed as between Mr J B Martin and Mr Jack Clunn, a real estate agent. It appears that Mr Clunn engaged Mr David Awaita to act for the owner, Miss Claire Martin in respect of this sale. Mr Awaita was engaged to draw up the necessary documents for the sale of the property. The purchaser, Mr J B Martin was required to pay K1,800 to Mr Awaita’s trust account as a deposit for the sale. Mr J B Martin further paid an amount of K366.50 for stamp duty. Mr Awaita paid the K1,800 into his trust account but the K366.50 was never presented and Mr J B Martin subsequently cancelled this payment. It is clear from the evidence that the defendant performed no services in respect of this sale. It is also clear from the evidence that the defendant obtained no instructions from Miss Claire Martin in respect of the purchase price of K18,000. This fact was revealed when Mr J B Martin made direct contact with Miss Claire Martin. Mr J B Martin instructed Young & Williams to recover the K1,800 from the defendant. The first letter of demand by Young & Williams is dated 21 December 1983. Another follow up letter was sent dated 17 January 1984 with no further response from the defendant. In a letter dated 6 February 1984 to the defendant, Young & Williams pointed out that if no payment was made, they were instructed to commence legal proceedings to recover the money. Again no response was forthcoming from the defendant. This resulted in a District Court summons taken out against the defendant. The defendant did not defend this action and a judgment was entered for a total amount of K1,910 which included K84 interest and K26 for costs. The defendant was again advised by Young & Williams in a letter dated 19 April 1984 of the judgment against him and advised him to pay up. Again this letter produced no response and Young & Williams took out a warrant of execution for the payment of this money. This again produced no result. In a letter dated 9 July 1984 addressed to the defendant by Young & Williams it was pointed out to him that unless he accounted for and paid the moneys back to Mr J B Martin, they would report the matter to the Law Society for breaching the Trust Accounts (Lawyers) Regulations (Ch No 287). Attempts by J P Martin and his lawyers continued up to the end of 1985 to recover this money but without success. The trust account deposit book kept by the defendant revealed that an amount of K1,800 was paid into the trust account. It is also clear from the evidence that the bank statement of this trust account is closed and there is no more money in it. The defendant has not denied any of the facts stated above and has not given any explanation of the use of K1,800. I can only conclude from these facts that he has misappropriated K1,800. This not only amounts to improper conduct on the part of a lawyer but could result in criminal prosecution.
The second complaint under this heading, relates to another client Veronica Koroti. Mrs Koroti’s husband, Albert Koroti was killed in a motor vehicle accident on 20 July 1980. He was survived by Mrs Koroti and six children. A relative of Mrs Koroti, Mr Chris Haiveta approached the defendant, acting on behalf of Mrs Koroti and the children in respect of the claim. It appears from the evidence that this was done with the knowledge and approval of Mrs Veronica Koroti. Over the next year or two, the defendant obtained instructions from Mrs Koroti through Chris Haiveta. The claim was eventually settled for a sum of K24,964.47. This claim was sanctioned by the National Court and the moneys belonging to the children were invested by the Registrar until they reached the age of 21 years and Mrs Veronica Koroti was apportioned K12,235.56. It is clear from the evidence that the amount which was to be paid to Mrs Koroti was paid to the defendant’s trust account. Up to this point, there appears to be no complaint about the manner in which the defendant conducted this claim.
It appears from the evidence that Chris Haiveta obtained the amount of K12,235.56, money which belonged to Mrs Koroti. When the defendant paid this money out of his trust account, he wrote the cheque to be paid to Chris Haiveta. Mrs Koroti has denied that she at any stage authorised Mr Awaita to pay her money in the name of Chris Haiveta. The defendant has not suggested that Mr Chris Haiveta represented to him that Mrs Koroti’s money should be paid to him. It appears that out of the amount obtained by Chris Haiveta, an amount of K7,000 was deposited in IBD with the Indosuez Bank in the name of Kosi Koroti, a brother of the deceased, Albert Koroti. A sum of K500 was sent to Albert Koroti’s father. The amount of K7,000 which was paid into the bank was recovered by Mrs Koroti with an interest of K349.04. So out of the total of K12,235.56, Mrs Koroti only recovered K7,000. It is not clear from the evidence as to what happened to the balance of the money. However, it is clear that Mr Chris Haiveta would give an explanation about this amount as he was the one who received the total amount. To date, Mrs Veronica Koroti has not received the balance of the money. It is clear that the defendant in paying out the money directly to Chris Haiveta without authority and instructions, failed to protect the interests of his client, Mrs Veronica Koroti. This would amount to improper conduct in relation to his client’s interest.
BREACH OF TRUST ACCOUNTS ACT (CH NO 287)
The Trust Accounts Act regulates the operation of trust accounts by lawyers (amongst others). Section 3 of the Act sets out the duties of a trustee. When a lawyer receives money on behalf of a client, he is duty bound to pay this into a trust account which is operated for that purpose.
Under s 4 of the Trust Accounts (Lawyers) Regulations (Ch No 287), a lawyer is required to have his trust accounts for each year to be audited by an auditor within four months after the end of the year. In this case, the defendant operated a trust account for this purpose. There is no complaint in this regard. The complaints by the Council are these:
(a)      Failure to audit trust accounts under s 4 of the Regulations.
(b)      Failure to keep proper records of the operation of the Trust Account.
(c)      Use of the money from the Trust Account for purposes other than the purposes for which they were received.
(d)      Failure on the part of the defendant to comply with the opportunity to audit accounts after an inquiry by the Council under s 6 of the Lawyers Act (Ch No 91).
The complaint relating to non-compliance with s 4 of the Regulations, relate to the year ending 29 February 1984 and the subsequent years up to the time of the hearing of this matter. The defendant failed to provide an audit report for the period ending 29 February 1984. This prompted the Council of Legal Education to write a letter dated 28 August 1984 requesting the defendant to provide an audited report. This produced no result. The defendant was subsequently summoned on 24 June 1985 to appear before the Council. He appeared before the Council on 8 July 1985. At the hearing, the defendant gave no reasonable explanation for the failure to provide an audited account of his trust account. Also at this hearing, the Council discussed the question of the improper conduct of the defendant in relation to the two clients which I have already dealt with, Mr J B Martin and Mrs Veronica Koroti. At this hearing, Mr Awaita was given an opportunity to pay the client’s money but he failed to comply. Had the defendant complied with the directions given by the Council to pay back clients’ money as well as provide an audited account, this application would not have been made. The defendant has not provided an audited account to date. I have examined the records relating to the trust account and I find that the defendant has not kept proper records, particularly of the moneys that were paid out of the account. For example, a number of cheques were drawn on cash with no indication of what the money was used for. The defendant was given the opportunity but did not give any explanation of all the various cheques that were drawn on the account. The defendant himself conceded that the books were not in order to enable any auditor to properly audit the accounts. This is not just a failure to provide audit accounts but it is also a failure to keep any proper records of the operation of the account to enable any auditor to audit them at all. There is no question that the defendant has clearly breached the Trust Accounts (Lawyers) Regulations.
CONTEMPT OF COURT — FAILURE TO COMPLY WITH FINE
The third ground relied upon by the Council relates to a finding of a contempt of court by the National Court for failure to attend a court hearing on a criminal trial in Popondetta. He was fined K1,000 and he was ordered not to appear in the National Court until the fine was paid. In passing, I should indicate that the order suspending the defendant from appearing in the National Court until the fine was paid may be questionable.[iii]1 This comes within the jurisdiction of the Court under the terms of the Lawyers Act (Ch No 91). To date, the defendant has not complied with that order. The full circumstances of the contempt proceedings and the fine are now contained in The State v Mark Taua; Re Awaita [1985] PNGLR 179. I find that a non-compliance with a court order by a lawyer is improper conduct.
As I have indicated in dealing with each of the grounds, I am satisfied that the Council has shown good cause to have the defendant suspended from practice. Counsel for the Council has conceded that even though the application is for suspension for a period of three years, the court has jurisdiction under the Act to suspend for a greater period.
No person may practise as a lawyer unless he or she is admitted to practise by the National Court. A person is required to have certain qualifications and he must be certified by the Principal Legal Adviser to be a proper and a fit person to practise. The court has the overall supervision of all lawyers in practise. Where there is conduct by legal practitioners which is undesirable, s 13 of the Lawyers Act provides for the court to suspend practise by such lawyers. I consider that these provisions have two basic aims.
(1)      To protect clients from activities of legal practitioners, which are contrary to their interests; and
(2)      To maintain the standards of the profession at a high level.
As can be seen from the provisions of the Lawyers Act, lawyers who do not keep to these standards will pay a very heavy penalty in terms of the practice of the legal profession.
I think it is important to set out the significance of the role played by lawyers in the administration of justice in our society. We have inherited an adversarial system from common law as opposed to an inquisitorial system found in some of the European countries. In an adversarial system such as ours, the lawyers play a very vital role in the administration of justice. For example, in civil proceedings, prosecution of a claim depends on each of the parties. It is the responsibility of the lawyer acting for the plaintiff to issue the writs, plead facts and call evidence to prove the case. Likewise a lawyer for the defence has to plead to the claim and call evidence to support his client’s defence. The role played by the lawyers in investigating and pleading their clients’ case is important to each of the parties. Even in a trial level, the lawyers play an active role in calling evidence and conducting the case before the court. The court simply sits to hear and determine issues raised by the parties before it. The court cannot conduct an investigation or examination of the witnesses on behalf of the society at large: see Lord Denning in Jones v National Coal Board [1957] 2 QB 55. It is clear from this brief discussion that the interests of the parties can only be protected to the extent of the role played by lawyers. It is also apparent that the determination of the matter can only be properly determined to the extent to which the lawyers have prepared and presented the case before the court. Therefore, in our system, the responsibility of lawyers is much greater in the preparation and conduct of litigation.
In addition to this, lawyers handle a lot of money and property on behalf of their clients. Our system has placed much trust and reliance on the legal profession in carrying these heavy responsibilities. Because of this, lawyers are held in high regard and with much integrity. The purpose of these provisions is not only to ensure that the public is protected but also to enable the administration of justice to function effectively within the system which we have inherited. These provisions are designed to suspend persons who are not able to function within these requirements. The grounds upon which the suspension is sought have the following characters:
(a)      Misuse of clients’ money. To date these moneys have not been repaid to the clients.
(b)      Failure to pay a fine of K1,000 by the National Court. To date this fine has not been met.
(c)      Failure to comply with the requirements of the Trust Accounts (Lawyers) Regulations.
(d)      Inability to keep proper records of clients’ moneys.
(e)      In respect of clients’ moneys and the trust accounts, the Council of Legal Education gave every opportunity for the defendant to comply. No genuine attempts by the defendant to comply.
The defendant has given only one explanation for this conduct. He practised with Kirkes for several years and then left to work with United Cleaners. He was employed as a company secretary and had a right of private practice. Up to that point in time, no evidence has been shown of any improper conduct. In about 1983 after he had joined the United Cleaners, the defendant began to have personal problems in his family. This resulted in divorce proceedings taken out by his wife at the end of 1983. This of course led to the break up of the family, and he was separated from his wife, son and daughter. In 1984, the Council of Legal Education investigated his affairs. His explanation is that since this personal problems, he has not taken control of his practice. I have taken this into account in considering the period of suspension.
I have already indicated the serious nature of the conduct of the defendant in all the matters that have been alleged against him. As this is the first such action under our legislation, I will suspend the defendant from the practice of the law for six years.
Orders accordingly
Lawyers for Council of Legal Education: Beresford Love Francis & Co.

[iii] See also Robinson v The State [1986] PNGLR 307.—Ed.